Clarity Checklist for the New Financial Year

Every year, around this time, I find myself wishing clients a ‘happy new financial year’. I get some funny looks. But I genuinely think 1 July deserves more credit than it gets.

We mark birthdays. We mark New Year’s Eve. But 1 July offers a unique opportunity to stop and check in on your money, your plans, and whether they still match where you’re at. I encourage you to pour yourself a cup of tea and work through our Clarity Checklist.

Check your super contributions

From 1 July, the amount you can contribute to super before tax, your ‘concessional contributions’, rises to $32,500 a year. If you’ve paid off the mortgage, the kids have moved out, or your income has settled into a more predictable rhythm, this is worth a second look. Many people set their super

contributions years ago and never revisit them. A higher cap might mean an opportunity to put more away and reduce your tax at the same time.

It’s also worth checking whether you have unused cap amounts available from previous years. If your super balance is under $500,000, you may be able to carry forward unused concessional cap amounts from up to five years ago, on top of this year’s $32,500. For some people, that adds up to a much bigger contribution window than they realise.

Review your insurance

If you’re debt-free, congratulations, that’s no small thing. But it could be also worth checking whether the insurance you still hold, inside or outside your super, still earns its keep.

Premiums tend to climb as we get older. If the original reason for that policy (a mortgage, dependent children, a particular risk) no longer applies, it might be costing you more than it’s protecting.

Take stock of your net position

Once a year, I recommend to clients that they sit down and look at the full picture: everything they own, everything they owe, and how that’s shifted since last year.

Has your position improved? Stayed steady? Slipped a little? Whatever the answer, it tells you what to do next, whether that’s increasing your contributions, paying down debt faster, or simply confirming you’re on track.

If you’re drawing a pension, your  minimum changes

If you receive an income stream from your super, known as an account-based pension, your minimum payment is recalculated every 1 July, based on your balance on that date and your age.

If you turned 65 this financial year, your minimum jumps from 4% to 5% of your balance. The same step-up happens again at 75 (6%) and 80 (7%). It’s a detail that’s easy

to miss, but getting it wrong can have tax consequences, so it’s worth confirming with your fund or adviser.

Keep an eye on the Age Pension thresholds

For anyone close to the Centrelink asset test limits, there are other dates worth knowing. The lower asset threshold is indexed on 1 July, and the cut-off limits are indexed three times a year: 20 March, 1 July and 20 September.

If you’re near the Centrelink thresholds, even a small change in your assets, or the indexed figures themselves, can affect what you receive. Before making any decisions, check the updated thresholds for this financial year on our website at www.directadvisers.com.au – we’ll post them when they are announced.

Make a New Financial Year Resolution

Unlike those commitments we all make at the start of each calendar year (how’s that gym membership going?), I encourage you to make a simple New Financial Year Resolution that’s easy to keep. Just 10 minutes to check in on your super, your insurance, your pension, and your current situation.

To find out how we can help secure your financial future, visit directadvisers.com.au or call 02 6583 7588.