Frequently asked questions about financial planning

This information has been prepared for the information of members with the assistance of State Super Financial Services Australia Limited (SSFS). Australian Reward Investment Alliance (ARIA) owns 20% of SSFS.

What is financial planning?

Financial planning is the process of meeting your life goals through the proper management of your finances.

Your life goals could include buying a home, saving for your children's education, managing debt or planning for retirement.

Financial planners use a six-step process that helps you take a 'big picture' look at where you are and where you want to be financially. Using this process they help you work out what you need to do now and in the future to reach your goals.

The six steps of the financial planning process are:

Source and copyright: Financial Planning Association 2002

Where should I start to plan for the future?

Having thought carefully about what it is you want to achieve, and written down your objectives, a good place to start is to review your personal financial action plan. You will need to consider issues such as:  

Your Budget – A budget allows you to see where you really spend your money. For many people this can be quite surprising. Keeping track of your spending for a period of time gives you an idea of how much you really need to live on. If you would like to start keeping track of where your money goes, you can find a useful budget planner at State Super Financial Services Australia website.  

Insurance – Adequate insurance is vital. You should regularly review your home and contents insurance, your life insurance and income protection insurance. For many people, their superannuation fund provides cost-effective insurance.  

A regular savings program – Saving regularly is a powerful wealth creation tool. The discipline of saving is rewarded in the long term. Consider having an amount taken out of your pay each month. Your budget will help you decide what spare money you have. What you don't see you don't miss and you will be pleasantly surprised at how quickly your nest egg will grow.

Wills and Enduring Powers of Attorney – Your will may not necessarily determine where your super goes. In the PSS, your benefit will be paid to your eligible dependants. If you have no eligible dependants, your benefit will be paid as a lump sum to your estate. In these circumstances, a valid Will allows your assets to be distributed after you death according to your wishes. An enduring Power of Attorney allows a trusted person to act on your behalf, should you be unable to act for yourself because of mental or physical infirmity.

Superannuation – Superannuation is one of the most tax effective investments available. Take the time to understand your super fund so you can make the most of your end benefit. A useful source of information on what you might need in retirement is the detailed budget breakdowns for comfortable and modest lifestyles under SUPER GURU at Association of Superannuation Funds of Australia website.

Why do I need to see a financial planner?

Constant change in superannuation, taxation and social security legislation means that even simple decisions can have unforeseen consequences over the long term. This can be particularly so as we move from work into retirement. A financial planner can help you plan for your future and to avoid some of the pitfalls and traps along the way.

I'm going to take a full pension: do I need to see a financial planner?

A pension can form an invaluable foundation to your retirement income. However, financial planning looks at more than just your superannuation entitlements. A financial planner will look at your partner's situation, your other resources and assets, your future work plans, your retirement plans. Together you and your planner will develop a strategy that will manage your retirement lifestyle.

When should I see a financial planner?

There are a number of situations where a financial planner may be able to help. Some of the most important times include:

How do I choose a financial planner?

In planning for your retirement, it is important you understand we can only provide you with information about your super. For advice that takes into account your personal objectives, financial situation and needs, you should see a licensed financial planner.

You may be aware that we have an investment in State Super Financial Services Australia Limited (SSFS) and as a member, you and your family are welcome to access its retirement planning and investment management services. SSFS is a principal member of the Financial Planning Association of Australia (FPA).

You can contact SSFS direct on 1800 620 305, or visit their website to find out how they can best help you.

There is no obligation to use these services and before making any decisions, you should compare financial services/products to find one which best meets your personal objectives, financial situation and needs. A useful guide is GETTING ADVICE which offers information on choosing the right financial adviser and is published by the Australian Securities and Investments Commission in association with the Financial Planning Association of Australia.

I want to find out more about salary sacrifice. Should I see a financial planner?

It may be necessary to speak to a financial planner however there are a number of avenues you should explore first. Initially, discuss your situation with your Human Resources area. Many departments have a remuneration consultant that they can suggest you contact. Then, if you are considering salary sacrifice into super just call us for your options.

My pension will exceed my income requirements. Is there any reason to see a financial planner?

A financial planner will review your total situation, including of course your need for income in retirement. For most people, however, decisions also have to be made about other money, such as unused leave payments and savings. Taxation and social security rules may also affect your retirement strategy.

It's important you know

This information is published for your interest and every effort has been made to ensure the information contained in it is accurate. The item above is of a general nature only, is not completely comprehensive, and has not taken into account your personal situation or requirements. Also, changes in legislation sometimes occur very quickly.

State Super Financial Services Australia (SSFS) is a principal member of the Financial Planning Association of Australia. Neither the SAS Trustee Corporation, ARIA nor the NSW or Australian Governments take any responsibility for the services or guarantee the performance of any product provided by third parties.

Members are under no obligation to use these services and should always compare financial services/products to find one that best meets their personal objectives, financial situation or needs.