Uncategorized

Technology has made everyday life easier. We take photos without thinking where they’re stored, pay bills without opening a drawer and carry our financial lives around on a device the size of a hand. But when someone dies, all this convenience can suddenly turn into complexity. The digital traces we leave behind rarely sit in one place. They’re spread across accounts, apps, devices and platforms – each with its own rules, logins and processes. Families describe “digital ghosts”: subscription renewals that keep charging, reminders that pop up at painful moments and accounts they can’t access but can’t seem to shut down. And in amongst that noise, some of the things we value most – photos, voice messages, creative work, sentimental emails – can disappear forever if no one knows how to reach them. Global research by STEP found that families routinely face distress when they try to retrieve a loved one’s digital accounts after death. Some platforms require a court order. Others shut down accounts automatically after periods of inactivity. Some provide almost no pathway at all. This is why a digital legacy is now a vital part of estate planning. Once you understand what to manage, the steps become surprisingly straightforward. Why your digital legacy matters Your memories live online. Photos, videos, voice notes and documents often sit inside cloud accounts no one else can unlock. Your digital identity outlives you. Unattended accounts can be taken over, impersonated or used for scams. Your finances may be invisible. With paper statements now rare, executors can only act on what they can identify. Every platform is different. Some let accounts be memorialised. Some allow download of content. Some require legal documents. Some simply freeze everything unless a two-factor code can be entered on a phone that may be locked. The gap between the way we live and the way our families have to manage things after death is growing. What to include in your digital legacy plan Below is a practical checklist to guide your thinking or to take to your adviser or lawyer. Your devices Your phone, laptop and tablet unlock almost everything else. What to do: Make sure someone knows how to access your primary device (passcode or secure storage of the code). Consider using a password manager with biometric login. Keep a simple note of where devices are stored. Passwords and password managers Guessing someone’s passwords can take weeks. It’s one of the most stressful parts of estate administration. What to do: Use a reputable password manager. Let your executor know how to access it if needed. Never list passwords in your will – it becomes public. Two-factor authentication (2FA) This is the most common stumbling block. Without the 2FA method (often your phone), accounts can’t be accessed or closed. What to do: Record which phone number, email and authenticator app you use. Store backup codes securely. Tell your executor where those backup codes live. Email accounts Email is the centre of your digital identity. Password resets, statements, confirmations, receipts – everything leads back here. What to do: List your primary email accounts. Keep recovery instructions with your digital legacy notes. Financial and crypto assets Banking and investment platforms are increasingly app-based. Crypto brings a separate risk entirely: if a seed phrase is lost, the asset is unrecoverable. What to do: Record your banking apps, investment platforms and online trading accounts. Store crypto seed phrases securely offline with clear instructions. Note any digital assets with value – domain names, creator accounts, loyalty points. Bills, subscriptions and automatic payments Automatic renewals can continue for months after death and are often emotionally triggering for families. What to do: List utilities, insurance, memberships, cloud storage and streaming services. If you prefer not to manage this manually, some digital estate tools use secure open-banking feeds to automatically track bills and recurring payments, giving executors an accurate snapshot without ongoing admin. Social media and online communities Your online presence might comfort your loved ones or create confusion if not handled clearly. What to do: Decide which accounts you want closed, memorialised or maintained. Assign a legacy contact where possible (Facebook allows this). Leave instructions for Instagram, LinkedIn, TikTok, X and any others you use. Cloud storage and shared drives Your documents, photos and creative work often sit across multiple services. What to do: List which cloud platforms you use (iCloud, Google Drive, Dropbox, OneDrive). Store access instructions with your password manager. Identify key albums or documents. Digital purchases and content E-books, music, digital art, online courses and gaming items may not be transferrable but they should be mapped. What to do: List platforms such as Apple, Google Play, Audible, Kindle and Steam. Note which, if any, carry financial value, such as non fungible tokens (NFTs). Getting started: small steps that make a big difference Digital estate planning doesn’t have to be overwhelming. Most people can complete a meaningful first pass in less than an hour. Start with one of these: Choose one device and record the access instructions. Activate a password manager and store key accounts. Make a short list of the platforms you use most. Tell one trusted person where your digital instructions are kept. Technology has made life richer and more connected. With a little planning, it can also make the legacy you leave behind clearer, kinder and easier for the people you love.   Source: Money & Life  

Estate planning is one of those tasks almost everyone means to get to, yet many only face it during a crisis. Families often describe the same moment. A parent dies, the surviving spouse and children open a cupboard or a laptop, and suddenly they are trying to reconstruct a life from scattered paperwork, half remembered details and password guesses. Grieving and guessing at the same time. We all want to protect the people we love, yet estate planning rarely feels urgent. Behavioural science helps explain why. Once you recognise the patterns that slow you down, it becomes much easier to take simple, confidence building steps. Why estate planning feels hard Present bias We tend to pay more attention to tasks with immediate payoff. Estate planning delivers its value later, often for someone else, so we quietly push it. One way to shift this bias is to focus on what it gives you today. A sense of order, less background stress and the comfort of knowing you have taken care of your family. Status quo bias Doing nothing feels safe because it is familiar. Many people tell themselves they will get around to it eventually. Often the breakthrough comes from doing one small first step. Listing your accounts or checking your super nomination can be enough to create momentum. Optimism bias Most of us assume we have plenty of time. This feeling exists in every age group. Early planning creates a safety net that protects the people you care about, even if life changes unexpectedly. Emotional discomfort Thinking about incapacity or death can feel heavy, so people naturally avoid it. Once you start the process, the conversations turn out to be far more warm, practical and reassuring than expected. Understanding these patterns is the first step toward overcoming them. The second step is knowing exactly what to do. Estate planning at every age Estate planning is not something that begins at 65. It begins the moment someone depends on you or your decisions extend beyond yourself. It’s not about the imminence of your death. It’s about the complexity of your life and what that would mean for the ones you leave behind if something were to happen for you. And with our complex, more invisible digital lives, the need to start earlier has never been greater. In your 30s Many people have young children, mortgages or shared income. A Will, a clear super nomination and a plan for childcare and finances can prevent enormous complexity later. In your 40s Life becomes more layered. Blended families, ageing parents, business ownership or investments bring extra responsibility. Updating your Will and documenting your assets and liabilities becomes especially important. In your 50s Attention often shifts to retirement planning and long-term health. Planning your health outcomes and funeral isn’t a morbid thing to do – it’s an act of kindness so that your loved ones aren’t left guessing (and possibly in conflict) about what you would have really wanted. Trigger moments Life changes are better signals than age. Review your plan when you experience: Marriage Separation Buying or selling a home Birth of a child or grandchild Starting a business A significant diagnosis A change in family relationships Planning after a diagnosis is possible but it is also the hardest moment to do it. Earlier is easier, calmer and clearer. Your essential estate planning checklist Create or update your will Review your superannuation and insurance nominations Make a simple list of assets and liabilities Capture your bills and ongoing commitments Plan for your digital life Put in place powers of attorney and health directives Document your personal wishes Store everything safely and tell someone where it is Taking your first step Estate planning becomes easier the moment you begin. Choose one small task that feels most relevant or imagine which task would be hardest for your family if you were not here. Each step creates clarity and reduces the burden on the people you love. One day they will feel the care behind your preparation and the relief of having clear guidance when they need it most. Source: Money & Life  

Getting on top of your finances is one of the most common new year’s resolutions Australians make. But only 12% of us achieve our goal. Here’s how to be one of them. More than one in two Australians (52%) plan to get on top of their finances each year, according to research from the Federal government’s Moneysmart website#. Popular goals include creating or updating a budget (43%), investing more (37%) and paying off debt (33%). But only about one in eight (12%) stick to their plans. Meanwhile, close to three in five people say not saving enough is what got them off track to begin with*. Here are some tips to help you get your short-term and long-term finances in order this financial year. Set a budget To create a budget, you’ll need to understand what your income is, what you spend your money on, and where you may be able to economise to pay off debt, save or invest. Set realistic limits on your spending, think about how your habits might need to change in order to stick to those limits, and follow through by directing any savings towards achieving your financial goals. Moneysmart offers tips on how to create a budget, as well as a budget planner to help you identify and track your expenses and money saving tips. Make a plan to clear any debt Clearing your debts – particularly credit cards, buy now pay later arrangements, unpaid bills, fines and the like – is a critical step towards getting your finances on track. List any debts you may have and prioritise those that need to be paid first, such as any essential expenses (rates, rent or mortgage repayments, utilities and so on), debts with high interest rates and smaller amounts you can clear quickly. If you need help, contact the National Debt Helpline, which provides free advice and counselling to help people prioritise and pay off their debts. Set your financial goals Most people will have a mix of short-term and longer-term financial goals that are very personal to their needs. The beauty of setting short-term goals is that once you are in the habit of setting money aside to achieve them, it should be easier to maintain that discipline and direct that money to achieving your longer-term objectives. Short-term goals are things you would expect to achieve within the next five years. These might include paying off credit cards and other higher interest debts, getting your super in order, saving for a holiday, accumulating an emergency fund or buying a car. Medium-term goals are those you might achieve in a five to 20-year time frame. Saving for a house deposit or creating an education fund might fall into this category. Long-term goals might include things like paying off your mortgage, making additional super contributions or investing outside your super. Make your goals SMART When it comes to determining your goals, it’s important to set what are known as SMART goals, which means they should be: Specific Measurable Achievable Realistic Time bound. In practice, rather than aiming to “save more”, an example of a simple, short-term SMART goal might be “set up an automatic deposit of $25 a week to pay off my $1,000 credit card debt by the end of 2025”. Tell someone you respect People who talk about their goals with someone they look up to are more likely to achieve them, so don’t be afraid to tell someone you respect not only what your goals are, but how you’re planning to get there**. Super charge your long-term savings We know from our research that the biggest regret of people as they approach retirement is not contributing more to their retirement savings. In fact, it’s the most common reason people feel they are off track financially, experienced by almost three in five Australians. Using your super to save and preserve those savings for when you ultimately stop working, is a great way to help prepare financially for the long term. The earnings your super makes are generally taxed at 15%, which is lower than many people’s marginal tax rate. This means your savings are likely to compound and grow faster. As the earnings on your super are reinvested and taxed at a lower rate than earnings outside super, you can generate returns on your returns, leading to exponential growth over time. Automate your savings with salary sacrifice Even small, regular contributions to your super can grow significantly. It works even better if you start early and remain consistent, although there are ways to leverage the benefits of super at any age. For example, say you decided to give up one takeaway meal a week, saving $25. If you make a $35 pre-tax voluntary contribution to your super each week (assuming a 30% tax rate this would leave you $25 less in your take home pay), here’s how it could compound and contribute meaningful amounts by the time you retire^: $89,980 if you start at the age of 30 $56,622 if you start at 40 $30,264 if you start at 50. If you set up a salary sacrifice contribution through your employer using pre-tax income, you might not notice much difference to your take home pay after tax is taken into account. Optimise your super outcomes Make sure your super is set up to give you the best long-term returns by following this month by month checklist. FEBRUARY: Set your financial goals MARCH: Understand how your super is invested APRIL: Make an additional contribution MAY: Can super help you catch up or get ahead? JUNE: Double check the basics   # ASIC research on financial goal setting found while more than half Australians surveyed plan to set a financial goal, only about 12% stick to it. ** ‘When goals are known: the effects of audience relative status on goal commitment and performance’, Journal of Applied Psychology, 2019. * Rethinking Retirement 2025, commissioned by CFS and conducted with more than 2247 Australians from July-September 2024. … Read more

You’ve spent your entire adult life working and now it’s time to kick back and do more of the things that interest you – whether perfecting your golf handicap, travelling the world or spending time with the grandkids, retirement is a time for an entirely new lifestyle. Set up a spending plan It takes 12 to 18 months for new spending patterns to become established, so take the time to consider how your expenses are likely to change in retirement. Some things such as electricity and gas may remain constant but others such as your commuting costs and clothing will change. A handy tool for assessing your retirement finances is the superannuation industry body, Association of Superannuation Funds of Australia (ASFA)’s Retirement Standard, updated quarterly to reflect the changing cost of living in retirement. ASFA estimates that to enjoy a ‘comfortable’ lifestyle, a retiree couple will need an annual budget of $76,505, while singles will need roughly $54,240 (based on September quarter 2025). Create an income stream Diversification is key to ensuring a steady retirement income. In addition to the government pension, income in retirement can come from a range of options including a share portfolio, property investment, an account-based pension (which is paid from your superannuation) and annuities. If the safety of a level of stable income appeals to you, annuities can be a good option. An annuity is a financial product available through super funds or insurance companies, which pays you a regular income for a set period or for life. The benefit of annuities is that you know you will receive a regular income stream for a chosen term or as long as you live, to be paid out monthly. Protect your retirement savings Managing your money when you’re retired may require a different approach to when you were working. With retirement comes unpredictability – the rising cost of living and share market fluctuations can impact your retirement income in unforeseen ways, so it’s important to protect against negative outcomes. If you follow the basic investment principles of diversification and asset allocation – where you structure your investment portfolio to have both growth assets and defensive assets – you can protect yourself against most scenarios. However, protecting essential spending requirements with a layer of highly secure or guaranteed income can provide even more certainty in terms of retirement income outcomes. There are many ways you can set up your retirement income plan. A good place to start is by figuring out where your retirement comfort zone might be – that is, how comfortable you are with the way you receive an income, how easily you can access your money if you need it and the way it’s invested. Plan for the long term As life spans continue to rise, it’s more important than ever to ensure retirement income lasts a lifetime. Some form of review mechanism is important, whereby you look at what’s happening in the world and adjust your asset allocation accordingly. The best way to plan for the long term is with a realistic spending plan, a disciplined adjustment process and sound investment principles up front. Seek professional advice Whatever option or combination of options you decide, it’s always important to speak with your financial adviser about your retirement goals and the pros and cons of each decision.   Source: Challenger

The assets that make up your estate may include property, bank accounts, investments and superannuation. How your estate will be distributed after your death will depend on who you nominate to be beneficiaries in your Will. That is, your estate minus your superannuation – unless you have specifically nominated your estate to be the beneficiary of your superannuation. In that case, your Will can determine how your estate will be split. But if you haven’t nominated a beneficiary for your super then it will be up to the superannuation trustee to determine where your superannuation will be paid and who will benefit. Who can be a superannuation beneficiary There are rules about who you can nominate to be your superannuation beneficiary. A beneficiary can only be a dependant or personal legal representative – the person appointed as executor or administrator of your estate or a mix of these. A dependant may include: your spouse (including a de facto spouse) your children (regardless of age) someone financially dependent on you (fully or partially) someone you had an interdependent relationship with. An ‘interdependent’ relationship is a close personal relationship with someone you probably live with where you provide financial support to the other and where one of you provides domestic support and personal care to the other. What are binding nominations, non binding, reversionary beneficiaries To ensure your superannuation reaches the right people after your death you will need to have nominated a beneficiary. There are two types of nominations – binding, which is legally binding, which the Trustee must follow, or non binding which isn’t legally binding but provides the Trustee with directions on how you would like your benefit to be paid. If you select a binding nomination, you should also ensure that either you update this every three years or that you make it a non lapsing nomination. Non binding nominations may be followed by the Trustee according to your wishes but ultimately is left to the Trustee’s discretion. If you are receiving an income stream or annuity from your super and you have not nominated a reversionary beneficiary, the payment will cease on your death and the remaining balance or lump sum value will be distributed to your beneficiaries, in line with your binding nomination. You may choose to allow your beneficiary to continue the pension or annuity – providing they meet an eligibility test, similar to a superannuation beneficiary. Why is it important that you nominate someone It’s important that you nominate someone as your beneficiary as your superannuation is not automatically counted as part of your estate. There have been cases where a person’s Will allocates the estate according to their wishes but because they have not named a specific beneficiary with their super fund, someone has made a claim on the person’s super – for example, an estranged spouse. The Trustee will have final say on how it is allocated so you should make your wishes known. It is also important to consider the tax implications of who to name as your beneficiary if it is not one of the people listed above. If you are leaving your estate to various beneficiaries, a financial planner can explain the implications of the way you divide your assets including your superannuation. Why you should review your beneficiary regularly Like all your legal and financial matters, you should review regularly to make sure you are still in the same situation as you were when you last checked these. In the last three years, have you married, divorced, had children or lost relatives? If you have done any of these things it is likely you will need to change your beneficiaries for your Will, your superannuation and even your insurance. Once again, your Will does not automatically include your superannuation beneficiary – so make sure that you update both when there are any changes and review regularly.   Source: Money & Life

Providing financial support to your grandchildren can be a meaningful way to invest in their future. From practical steps to financial strategies and legal considerations, there are several ways you can help set them up for long-term security and success. Financial actions Financial gifts and savings accounts One off or regular gifts: Consider gifting money when you might otherwise give a physical gift. For special events like a birthday, graduation or a religious or cultural event, deposit a financial gift into a savings account specifically set up for your grandchild. According to the MLC Financial Freedom Report, 18% of grandparents provide one off financial gifts to celebrate milestones or alleviate significant expenses and 16% offer regular financial gifts to support their grandchildren. Savings accounts: Open a high interest savings account in your grandchild’s name. Compound interest helps regular contributions, no matter how small, grow significantly over time. Education funds Education bonds: These are tax effective investment vehicles designed to save for future education costs. Contributions to these bonds can grow. Income is taxed at 30% within the bond. Withdrawals for education expenses will attract a tax rebate for tax paid within the bond. There may be tax implications for the grandchild. Paying for school or university: Directly paying for your grandchild’s tuition can be a substantial help. This can reduce the need for student loans and the financial burden on their parents. Investment accounts Custodial accounts: These accounts allow you to invest in stocks, bonds and mutual funds on behalf of your grandchild. The assets in the account legally belong to the child but are managed by you until they reach adulthood. Superannuation contributions: If your grandchild earns an income, consider making contributions to their superannuation fund. This can provide a significant boost to their retirement savings. Concessional contributions count towards a cap and penalties may apply if the cap is exceeded. Practical steps Financial education Teach financial literacy: Share your knowledge about budgeting, saving and investing. Encourage good financial habits from a young age. The MLC Financial Freedom Report highlights how financial support from grandparents can lead to greater financial satisfaction and stability later in life. The report shows that 43% of Australians surveyed who received substantial financial support from their grandparents are extremely or very satisfied with their current financial situation, compared to 17% who did not receive such support. Involve them in financial decisions: When appropriate, involve your grandkids in discussions about money. This can help demystify finances and prepare them for managing their own money. Support for extracurricular activities Funding hobbies and interests: Financially supporting your grandchild’s hobbies, sports or other extracurricular activities can help them develop skills and interests that may benefit them in the future. Housing and transport assistance Living arrangements: Allowing your grandchild to live with you rent free or at a reduced rate can help them save money for other important expenses, such as education or starting a business. Helping them buy a car: Nearly one in ten grandparents (9%) help their grandchildren achieve a degree of independence by assisting them with their first car purchase. Other important considerations Estate Planning Wills and trusts: Ensure your Will is up to date and consider setting up a testamentary trust for your grandchildren. These trusts can provide financial support for specific purposes, such as education or buying a home and can be managed according to your wishes. Power of Attorney and guardianship: Designate a trusted individual to manage your affairs if you become unable to do so. This ensures that your financial support for your grandchildren continues seamlessly. Tax implications Understand gifting rules: If you receive government support or a pension, there may be caps on the amount you can gift without affecting your pension. Make sure you check prior to gifting significant sums. Consult a financial adviser: Work with a financial adviser to understand any social security and tax implications of your financial gifts. Avoiding risks to your retirement savings While supporting your grandchildren is a noble goal, it’s crucial to ensure you don’t compromise your own financial security. Here are some strategies to avoid risks to your retirement savings: Diversify your investments Diversification can help protect your retirement savings from market volatility. By spreading your investments across different asset classes, such as stocks, bonds and real estate, you can reduce the impact of any single investment’s poor performance. Maintain an emergency fund Having an emergency fund can provide a financial cushion in case of unexpected expenses. Adopt a sustainable withdrawal rate The 4% rule is a common guideline, suggesting that you withdraw 4% of your retirement savings in the first year and adjust for inflation in subsequent years. This can help your savings last longer during your retirement. Consider annuities or IRIS products: Speak to your financial adviser about whether annuities or an innovative retirement income stream (IRIS) product may work for you to reduce the risk of outliving your savings. Regularly review your financial plan: Periodically reviewing your financial plan with a financial adviser can help you stay on track and make necessary adjustments. Limit large financial gifts: While it’s generous to support your grandchildren, it’s important to balance this with your own financial needs. Consider setting limits on large financial gifts to ensure your retirement savings remain intact. Inspiring the next generation Your financial support can do more than just provide immediate benefits; it can inspire your grandchildren to achieve their own financial independence. By setting a positive example and providing the tools and resources they need, you can help your grandchildren build a solid foundation for their future. Setting your grandkids up for the future involves a combination of financial gifts, practical support and intentional planning. By taking these steps, you can help your grandchildren have the financial stability and knowledge they need to achieve their dreams. Your legacy will not only be remembered in the form of financial support but also in the values and lessons you impart. References MLC Financial Freedom Report 2024 Australian Taxation Office (ATO) guidelines on gift tax Source: MLC  

Property investments appear to be on the wane with younger investors as house prices rise: the number of those expecting property will be their biggest investment at retirement is half that of older Australians. So is our love affair with property changing? Higher property prices may be affecting the investment strategies of younger investors, with half as many Australians under 50 expecting property to be their biggest investment when they stop working, compared with their older counterparts, new research from Colonial First State shows*. Only 11% of younger Australians predict property will be their biggest investment, excluding the family home, compared with 21% of Australians aged 50 to 64, Colonial First State data on Australia’s investing habits reveals. The change comes despite a potential tendency to overestimate the growth associated with residential property investments. Australians expect residential property to return 9% a year on average, the data shows, while Australian shares and managed funds were expected to return 7% and exchange-traded funds were expected to return 8% on average. Property price values and rental yields on residential property, particularly, are highly dependent on the specific property purchased. However, according to the Australian Bureau of Statistics, house prices grew 3.5% nationally in the year to 30 June 2025 ^. According to IBISWorld, residential rental yields averaged 3% in the five years to 2024#. Australian shares were up 13.7% over the year to 30 June 2025, while unhedged global shares grew 18.7% over the same period**. On an annualised basis, Australian shares have returned 7.9% since 2005##. Where do Australians want to invest and why? While younger Australians are less confident that property will be their major choice of investment, it remains the aspirational investment choice for Australians in general. One in five Australians would choose property if they could only invest in one thing, while shares were the next most popular investment type, nominated by one in eight. However, shares are currently our most popular investment choice after money in the bank, held by 29% of all investors – twice as many people as property (15%). So why does property still have such a hold on us? Much of it, we pick up from our parents. Of those who believe that property should be our first investment, more than half learned this from family or friends. Australians also associate property with security: 37% nominated the role of property investments as providing financial security, along with long-term capital growth (33%). Shares were more likely to be seen as a way to diversify an investment portfolio, nominated by 32%, followed by providing growth over the long term (30%) – although wealthier investors were much more likely to see shares as a driver of growth. However, just 13% were advised to invest in property first by their financial adviser. And just one in five Australians generally has a financial adviser. So are property prices forcing a rethink of investing strategies? Younger Australians are more likely to nominate shares or ETFs as their top investment at retirement, seeking growth and diversification, the data shows. For Australians aged under 50, shares and ETFs were the most nominated investment choice people expected to hold at retirement, after money in the bank. It has been estimated that it now takes the median household over 10 years to save a 20% deposit for the median priced home, which surpassed $1 million last year^^. Conversely, it was well understood by about 70% of younger, as well as older investors that you could invest in shares with amounts as small as $1,000, which may be driving the increased adoption of equities through buying shares and ETFs. * Research commissioned by Colonial First State and conducted with more than 2250 Australians from April to June 2025. ^ Household wealth up 2.7% in June quarter | Australian Bureau of Statistics #Residential property yields – Business Environment Profile Report | IBISWorld ** CFS Investments data includes: Benchmark performance annualised for periods greater than one year is shown for: Bloomberg AusBond Bank Bill Index; Bloomberg AusBond Composite 0+ Yr Index; Bloomberg Global Aggregate AUD Hedged; S&P/ASX 300 Accumulation Index; MSCI ACWI Ex-Aus Index Special Tax Net AUD Unhedged; MSCI ACWI Ex-Aus Index Special Tax Net AUD Hedged, MSCI Emerging Markets (AUD), FTSE EPRA/NAREIT Dev ex Aus Rental Index AUD Hdg Net and FTSE Dev Core Infrastructure Index AUD Hdg Net. ^^ Housing Affordability Report ## RIMES, Colonial First State. Data from 30 June 2005 to 30 June 2025. Percentage return over rolling one year. S&P/ASX 300 Accumulation index. The index returns cannot be directly compared to an individual Colonial First State fund’s return for many reasons such as they do not include allowances for fees or taxation and do not reflect the asset allocation or stocks held now or over time. Past performance is no indication of future performance. Source: Colonial First State  

Retirement can be a golden opportunity to make changes to your lifestyle and routine and boost your wellbeing in the process. Find out more about the benefits of using your extra leisure time to stay active and connected to your community. Making the most of a new life stage If you’ve been working for much of your life, starting retirement is likely to bring some significant changes to your routine. By taking the opportunity to make the most of all this extra time on your hands, you can plan for a retirement that’s as exciting as it is rewarding. Enjoying a retirement that keeps you active and social is also a great way to invest in your mental and physical health, now and in the future. More time for your health and wellbeing Retirement often means healthy and positive changes to lifestyle habits. Compared with their working peers, retired people are likely to sleep more, spend less time sitting down and more time being physically active. A major life change like retirement creates a great window of opportunity to make positive lifestyle changes – it’s a chance to get rid of bad routines and engineer new, healthier behaviours. When people are working and commuting, it eats a lot of time out of their day. When they retire, they have time to be physically active and sleep more. Whether it’s spending more time planning healthy meals, getting into the habit of going for a regular walk or bike ride or joining a local gym, sports club or team, there are plenty of ways you can use your time in retirement to keep yourself in the best of health. Stay social to boost your health even further Some of these activities will also come with the added bonus of new social and community connections. After stopping work, you could find that your social circle will change. Opportunities to connect with work friends may be less frequent, particularly if they haven’t retired yet or you’ve made a move to a new location as part of your retirement plan. It seems pretty obvious that keeping up with friends and family will be good for your mental health, regardless of your age. Seeing more of friends in your later years has a very positive impact on life satisfaction, as social isolation can actually be as bad for your health as smoking and drinking alcohol and has a bigger impact on life expectancy than lack of exercise or being overweight. It can take time to build up your social network in retirement, so start to make a plan for how you’ll connect with your local community while you’re still at work. Your local council will be a good resource for information about groups you can join and finding out what’s going on locally. Searching online is also a great way to discover activities you’d like to take part in. Feel good about giving back Volunteering can also be a great way to meet people and make a positive contribution to your community. If you find yourself missing the routine and sense of purpose you experienced with your job, volunteering can be a good substitute. Keeping active and getting involved in voluntary work definitely brings retirees a lot of benefits that would have been brought about by keeping on working. Speak to local community groups or search online to explore opportunities that interest you or could benefit from your skills. As well as organised volunteering programs, you might be interested in sharing your skills in a mentoring or tutoring arrangement. You can choose to offer your time and skills as a volunteer or by working part time if you need an income boost. Spread your wings Your retirement is also the ideal time to tick off some destinations on your bucket list. Many companies organise travel programs specifically suited for people who are travelling in retirement. These trips can be ideal if you’re looking to meet and travel with like minded people and have all the hard work and planning taken care of. Remember to arrange insurance to make sure you’re covered for unforeseen events and any medical issues on your travels. Keeping busy on a budget Staying social and active in retirement doesn’t have to cost much. While some interests, like golf or crafts, may involve spending on memberships and materials, there are plenty of recreation activities that are low cost or even free. Investing in a sturdy pair of shoes is all you need to join a local walking club and showing your support at a local sports event likely won’t cost you a cent. With life expectancy rising, you could have many years ahead of you to enjoy new interests, friendships and opportunities to support your community. But it’s also important to plan for a secure retirement income so you can enjoy all these things with peace of mind about your financial future. Source: Challenger  

The following outlines your obligations as a trustee or director of a corporate trustee of a Self Managed Super Fund (SMSF) and what happens when they are not met. Understand your obligations All trustees of your SMSF are responsible for running the fund and making decisions that are in the best financial interests of all members. This means you are responsible for decisions made by other trustees even if you’re not involved in making the decision. Trustees must meet specific obligations under the Superannuation Industry (Supervision) Act 1993. Exercise honesty, care, skill and diligence As a trustee, you must ensure your SMSF complies with: your trust deed the rules of the Superannuation Industry (Supervision) Act 1993 (SISA). The SISA states that as a trustee, you must: act honestly in all matters concerning your fund act in the best financial interest of all members not hinder any trustee from performing or exercising functions or powers not access or allow others to access benefits early retain control over your fund. Meet the sole purpose test The sole purpose of your SMSF is to provide retirement benefits to your members or to pay death benefits if a member dies before retirement. To be eligible for the tax concessions normally available to super funds, your SMSF must meet the sole purpose test. Generally, it is illegal for anyone to benefit from the SMSF outside of this sole purpose. It can be illegal to: access funds early invest in a related business be paid for your duties or services as a trustee use the SMSF’s assets for personal use. An example of breaching (or contravening) the sole purpose test is where your SMSF invests in a rental property specifically to allow a related party to live in that property. Accept contributions and rollovers In accordance with the trust deed and superannuation laws, you need to follow specific rules for accepting contributions and rollovers. You also need to make sure any contributions and rollovers are: properly documented allocated to the correct member’s account. Develop and review your SMSF investment strategy Your SMSF’s investment strategy must: consider all members’ personal circumstances include investment objectives and types of investments allowed consider liquidity and diversification of assets and whether to hold insurance be regularly reviewed and updated when needed. When making investments, you must demonstrate with records how your decisions comply with your SMSF investment strategy. Comply with investment restrictions There are restrictions on SMSF investments. Any investment your fund makes cannot provide a present day benefit for the members or related parties. Other than very limited circumstances, generally: you can’t acquire assets from, or lend money to, fund members or other related parties your SMSF can’t borrow money. Pay benefits Trustees are responsible for ensuring a member is legally entitled to access their super benefit before releasing any retirement benefits. Generally, members can only access benefits once they meet a condition of release. You must pay benefits to members according to the trust deed and super laws. Value SMSF assets Each year you must value your SMSF’s assets at market value so you can prepare the fund’s accounts, statements and the SMSF annual return (SAR). Some assets must be valued and reported in a specific way. You must also keep evidence of your valuations to provide to your SMSF auditor. Prepare SMSF financial statements Each year you need to prepare: a statement of financial position an operating statement for your SMSF. You must then provide this to your SMSF auditor. Arrange the yearly audit Your SMSF must be audited each year by an independent SMSF auditor who is registered with the Australian Securities & Investments Commission (ASIC). The auditor will assess your fund’s compliance with super laws and report any contraventions to us. Lodge the SMSF annual return (SAR) Each year you must lodge the SAR by its due date and pay any tax liability. If the SAR is more than 2 weeks overdue, you may not be able to receive contributions or rollovers until you lodge your return. You may also be required to lodge: transfer balance account reports once your SMSF begins paying a pension activity statements. Pay yearly fees Your SMSF is required to pay the supervisory levy when you lodge your SAR. The amount will depend on whether your fund is new, existing or winding up. If your SMSF is set up with a corporate trustee, you will also have to pay ASIC fees. Notify the ATO of changes to your SMSF You must tell the ATO about certain changes to your SMSF within 28 days. If your SMSF is set up with a corporate trustee, you’re also required to inform ASIC. Keep accurate records You must keep records of all decisions and actions your SMSF takes. This will provide you with supporting evidence on the decisions you and the other trustees make. Meet the residency rules Your SMSF must be an Australian super fund at all times during the financial year. If it isn’t, the assets and income of the fund will be taxed at the highest marginal rate. Your fund is an Australian super fund if it meets all three of these residency conditions at all times during the financial year: establishment or at least one asset held in Australia central management and control ordinarily in Australia active members. If a member moves or travels overseas for an extended period, this may affect the residency status of the fund. Consequences of not meeting your obligations The ATO is a key regulator for SMSFs. This means they’re responsible for: administering super and tax laws ensuring trustee compliance. Their main focus is to assist trustees to understand their obligations and comply with the law. When an obligation is not met and results in a contravention, they may need to take compliance action. The action they take will depend on the: type of breach or contravention trustee’s attitude to their obligations seriousness of the contravention.   Source: Australian Taxation Office

Working out how much your business is worth can be an important part of getting finance, attracting investors or selling your business. Here are some suggested steps to help you through the process. Prepare your business information You’ll need a range of business information to value your business properly. If you need help with preparing your documents and can’t afford a professional, consider asking friends or family with bookkeeping or business experience. If you’re selling, potential buyers may want to value your business independently. So it’s a good idea to already have your business documents organised and up to date. You’ll need the following information. Finances and assets Your financial statements (for the last 5 years if possible) such as cash flow statements, debts, annual turnover and profit and loss statements. Details of physical assets such as machinery, buildings, equipment and stock. Details of other assets such as goodwill towards the business and intellectual property (any designs or ideas that you have protected through copyright). Legal information Legal documents such as leases and insurance policies. Registration papers such as business name certificates, Australian business number (ABN) registration papers, licenses, permits and any other papers that demonstrate you comply with government requirements. Business profile, procedures and plans Market conditions such as details of competitors and how your business compares to them. Sales information such as reports and forecasts. Business history such as start date, ownership and location changes. Business procedure documentation such as marketing, staff roster and customer service procedures. Business plan such as marketing, emergency management and growth plans. Other details such as opening hours and whether the business premises are owned or leased. Staff, supplier and customer information Employee details such as job descriptions, skills and experience, work history, performance reviews and pay rates. Supplier details such as supply agreements and supply prices. Customer details such as customer numbers, customer profiles and direct marketing activities. Decide whether to get professional advice If you can afford to, consider getting professional advice on how to value your business through your accountant, a business adviser or a business broker. These professionals can help you: analyse your finances find trends in your industry’s market calculate the goodwill value of your business estimate your business’ future profit work out a value for your business. They might also have clients who would be interested in buying your business. This could save you the cost and hassle of advertising. Choose a valuation method Keep in mind that there is no one set valuation method. You could use a combination of methods to get your final value. You may also need to negotiate the method of valuation with a buyer or investor. If you use a professional, they can help you decide which method is best for your business. Some common methods for calculating the value of a business include using: current market values return on investment business asset value cost of starting a business from scratch future profit of a business. Look at current marketplace value and your industry How you value your business can depend heavily on the industry you’re in and the current marketplace value of similar businesses. Industries usually come up with their own rules and formulas to value a business. So, it’s a good idea to get a good understanding for your particular industry. Use the return on investment method to calculate value If you’re selling your business, the return on investment (ROI) method uses your business’ net profit to work out its value. You can either calculate: an ROI based on a selling price (value) you have in mind; or a selling price based on an ROI that you set ROI = (net annual profit/selling price) x 100 For example, you have a selling price of $200,000 in mind but want to test your ROI based on that price. You calculate that your business’ net profit was $50,000 for the past year. To work out the ROI, you use the formula: ROI = (50,000/200,000) x 100 In this case, your ROI is 25%. If you have an ROI in mind, you can use it to calculate the price for your business: Value (selling price) = (net annual profit/ROI) x 100 Say you wanted a ROI of at least 50% for the sale of your business. If your business’ net profit for the past year was $100,000, you could work out the minimum selling price you should set. Selling price = (100,000/50) x 100 In this case, to achieve a ROI of at least 50%, you’ll need to sell your business for at least $200,000. Use your business’ assets to calculate net worth When calculating the value of your business assets, make sure you include both tangible and intangible assets of your business. Tangible assets are physical things you can touch such as tools, equipment and property. Intangible assets are things that can’t be touched but are still valuable, such as intellectual property, brands and business goodwill. After you’ve calculated the total asset value of your business, use this as an indication of how much you’d like to sell your business for. Assessing your business’ assets value can be a complicated process. It’s a good idea to ask your business advisor or accountant for help. Calculating business goodwill Goodwill can include: customer loyalty and relations brand recognition staff performance customer lists reputation of your business business operation procedures. Calculating goodwill can be a complicated process. You’ll get different results depending on the method you use. You can use different methods to get a price range you’d like to set for your business goodwill but in the end, the value is what the marketplace or buyer is willing to pay. Because it’s difficult to calculate goodwill, it’s a good idea consult a professional such as your accountant. Account for depreciation If you use your business assets to calculate value, remember to account for depreciation. Depreciation is the loss of value for your assets over time. For example, you may have purchased a computer for your business 3 years ago for $1,000. When calculating your business’ asset value, the value of … Read more