Monthly Archives

December 2020

Early release of super makes a difference

By BGL Update, Homepage, IndustryNo Comments

This has been a tumultuous year for BGL, our clients and the superannuation industry.

During the year, the government introduced another super early release scheme – this time in response to COVID-19.

I have asked our friends at mProjections to do a couple of calculations to demonstrate the impact of a withdrawal and how to engineer a higher retirement. Please check these out.

Example 1

Phillippa, 29, worked in the hospitality industry with 2 jobs, total income (pre Covid) of around $55,000pa, pre-tax. She is single and had built up a Super balance of $25,000.

Shortly after loosing one of those jobs, she withdrew $8,000 without thinking about the consequences to super. Her Super had been invested in a typical ‘Balanced’ Investment Option with 65% in growth assets.

Using the mProjections Report, Philippa moved her post-withdrawal balance to a High Growth Investment Option (85% in growth assets). She saw that, before withdrawal, she would have $55,194 pa annual retirement income for 25 years, but with a move to High-Growth – without additional contributions – she would enjoy a $57,415 projection. Most importantly, her upside for a considerable improvement in retirement spending would increase.

 

Example 2

Jonathan works as an electrician in the western suburbs of Sydney and had his hours reduced to 20 hours per week for 3 months. He decided to withdraw $8,500. Using figures in our Report, he saw how to increase his $79,747 tax-free pre-withdrawal retirement projection by moving the balance of his fund to a High Growth Investment Option and a consequent retirement income projection of $82,442.

He also noted the greater likelihood of upside. ‘Low’ here is 15% of assets in growth.

 

If you would like to prepare an mProjections report for your clients, check out their website.

 

From the desk of the BGL Managing Director | 2020 in Review

By BGL Update, HomepageNo Comments

We are nearly at the end of 2020, and what a year it has been. It is certainly not a year I want to remember and the sooner we get (in my opinion) to 2021 the better.

BGL has a lot to be thankful for this year. Your support of my team and I has been fantastic and we all really appreciate it.

Working from home, Zoom meetings, doom and gloom from our media, has made our lives difficult. The winding back of restrictions, especially in Victoria, is well overdue.

We decided to close the BGL office for 3 weeks from 21 December 2020 to 8 January 2021 (inclusive). My team needs this time to refresh and recover from what has been a tough year. Very few have had any time off during the year.

I am looking forward to 2021 and the gradual opening up of Australian business. I feel very sad for so many small businesses that are not able to reopen. As a small business owner, my heart goes out to each and every one of them.

For BGL, 2021 will be very exciting. With the release of our 3rd cloud product Simple Invest 360 and some amazing developments coming from our product teams, 2021 will provide a heap of opportunities for clients and our Team.

I would like to sincerely thank the BGL Team that has grown to over 170 through 2020. The work you do and the service you provide our clients is invaluable.

Last, I would like to thank each and every one of YOU for being BGL clients in 2020. I hope we have lived up to your expectations.

Please have a safe and happy festive season and a prosperous 2021!

BGL welcomes SMSF Association Cost of Operating an SMSF Report

By BGL Update, Homepage, IndustryNo Comments

BGL welcomes the release of the Rice Warner SMSF cost of operating an SMSF report prepared for the SMSF Association.

“It’s great to see a proper analysis of SMSF cost and return data” said BGL’s Managing Director, Ron Lesh. “And knowing the vast majority of the data came from BGL’s Simple Fund 360 clients makes me even more proud.”

“The report shows the cost of running an SMSF highlighting that larger balance SMSFs cost less to operate than any other type of superannuation fund or account” noted Lesh. “And for smaller balances, SMSFs are comparable with APRA regulated funds”

The report data was sourced from BGL’s Simple Fund 360 and Super Concepts SuperMate software. “It is great to see 2 industry software companies working with Rice Warner to provide the data required to prepare the report at no cost to the SMSFA” added Lesh. “It is unfortunate that not all industry software companies chose to participate”.

“The other data I also found fascinating was the table on Page 21 of the Report showing investment returns for the last 14 years “says Lesh. “From 2005 to 2018, for 9 of the 14 years returns shown in the table, SMSFs performed better than APRA regulated funds”

“Clearly this shows ASIC’s SMSFs are not for everyone flyer was absolute rubbish” stated Lesh. “I said this flyer was misleading and did not fairly represent the cost of running an SMSF. The Rice Warner report validates my statements and furthermore shows that SMSFs with a balance of less than $500,000 are clearly cost competitive with APRA funds dispelling statements made in the December 2018 Productivity Commission report”