Uncategorized

Did you know there’s a secret weapon when it comes to building financial resilience? Turns out that Australians who have had advice are much more likely to be able to cope in times of market turbulence, according to the 2025 Empowered Australian* report commissioned by Colonial First State. Confidence is one of the key outcomes financial advice offers. The opposite is true for one in three of those who have never received advice. Instead of feeling confident about their financial situation, they say it’s affecting their lifestyle and wellbeing. Something to consider, as while financial markets have bounced back strongly from sharp falls in April, the road ahead may be bumpy. Recent events on the world stage have triggered significant volatility in sharemarkets. It’s in times like this where having access to a financial adviser can make a huge difference. More money in retirement is the hottest advice topic Most retired Australians want financial advice but many aren’t sure how to get it or if they can afford it. Hot topics include: boosting income in retirement getting a better return on investments understanding eligibility for government benefits and estate planning. With that in mind, below are three simple ways to access specialist retirement advice that you may not have considered. Tap into free general advice from your super fund Broad general advice on super and retirement products is made available by super funds to their members. Use your super or pension to pay for advice Did you know you can pay for advice directly from your super or retirement savings? Seven in ten Australians don’t know this, according to the Colonial First State report. With rising costs more of a concern this year than they were a year ago, it’s good to know that comprehensive or indepth personal financial advice with no upfront hit to the hip pocket is available. There are some rules around this to protect your super or retirement savings. The advice must relate to how you could use your super to fund or save for retirement, setting up a pension, or managing investment risk to make your money last longer. Advice could save you thousands of dollars over time without putting a dent in your weekly budget now. Consult a retirement specialist Specialist retirement advice can help boost your retirement income and ensure you don’t miss out on government benefits. One third of all recipients apply for the government Age Pension at least a year later than they could have, research from Retirement Essentials shows – that’s money you won’t get back if you don’t apply on time^. Other government benefits, such as the Commonwealth Seniors Health Card, can be worth thousands of dollars a year in reduced health and medical costs#. * CFS conducted research with 2250 Australians between October and December 2024 on access to financial advice for the 2025 Empowered Australian report. ^ Research on the cost of late applications for the Age Pension and related government benefits from Retirement Essentials and Link Advice, 2024. # Research on Commonwealth Seniors Health Card uptake from Retirement Essentials, 2025. Source: Colonial First State

Online shopping is convenient and the preferred way to shop for a lot of Australians but it comes with a risk. Cybercriminals often target online shoppers to steal their money or their personal details. They do this through a variety of methods, including setting up fake retailer websites, selling products that don’t exist, asking for personal and payment information they don’t need, and installing malicious software (“malware”) on your device. It is important to be alert and be secure when you are shopping online. Once a cybercriminal has your financial details and money you are unlikely to get your money back. Not only will you be disappointed your goods never arrived, you will also have lost the money you paid for the goods. There are many things to think about when using personal devices (e.g. smartphones, tablets, computers and laptops) for online shopping. Follow these security tips to make sure your online shopping experience is secure. Online shopping scams can have serious effects Online shopping scams don’t discriminate. They can affect individuals of any age and businesses of all sizes. How to shop online securely The best way to protect yourself while shopping online is to know how to look for suspicious websites and sellers while boosting your protective security measures. There are many things to be aware of while you shop and after you make a purchase. To help you prepare, we have put together a checklist of the key advice: Shop using secure devices Make sure the devices you use for online shopping have the latest updates installed and are connected to a trusted network. For example, use your home Wi-Fi or (4G/5G) cellular rather than public Wi-Fi. Protect your payment information and accounts Be careful saving payment information on an online shopping account. If you do save payment information to an account, you should turn on multi factor authentication (MFA) to protect it. Where this is not possible, set a long, complex and unique passphrase as the account’s password to help keep cybercriminals out. You could also use a password manager to generate and store passwords for you. Use trusted sellers Research online shopping websites before you buy and stick to well known, trusted businesses. Know the warning signs Extremely low prices, payments through direct bank deposits and online stores that are very new or have limited information about delivery, return and privacy policies can all be signs of a scam. Use secure payment methods Never pay by direct bank deposits, money transfers or digital currencies such as Bitcoin, because it is rare to recover money sent this way. You should pay by PayPal or with your credit card. You may want to set up a second card with a low credit limit and keep it specifically for online shopping. This will help minimise financial losses if your card details are compromised after shopping online. Don’t engage and report suspicious contact Be aware of any strange phone calls, messages or emails you get about online orders. It could be someone trying to get you to share your personal or financial details. If someone contacts you about an order you don’t remember placing, it could be a scam. Stop contact and reach out to the store using the details on their official website to check. Watch out for fake delivery scams Don’t let your guard down while you’re waiting for your goods to arrive. Cybercriminals can send fake parcel delivery notifications with links that could trick you into downloading malware or giving away your personal details. If you receive such a message, do not click on the link. Delete the message immediately. You can contact the seller or the courier company using the details on their official website. Scamwatch has examples of what these fraudulent text messages may look like. Take additional precautions It is always a good idea to limit the amount of personal information that you use on websites. Ask yourself if the website really needs this extra information or an account to complete the transaction. Visit www.scamwatch.gov.au for more information on online shopping scams. Source: Australian Cyber Security Centre (ACSC)

If you’ve ever had a job, then super is going to be on your radar. Knowing what it’s all about is the first step to making it work for you. Super can help you save big Super is your savings account for retirement. But well before you retire, your balance could be in the hundreds of thousands of dollars. While you can’t spend it now, a sum of money that big has got to be important to you. So it makes sense to know how it works and what you can do with it before you retire. What is super? Superannuation (super for short) is your savings for your time in retirement. It’s a sum of money you can spend when you’re no longer earning an income from paid work. Where does super come from? When you’re working, your employer is usually required by law to pay a certain percentage of your salary into your super. This is called the Superannuation Guarantee (SG) and the good news is that it’s going up by 0.5% each financial year until 1 July 2025 when you’ll be getting 12% saved into your super for each dollar you earn. These SG savings aren’t taken out of your salary like income tax. Super contributions are an extra amount included in your employment package that your employer saves into your super fund on your behalf. What happens to your super? Super is your money and you get to control what happens to it, within certain limits. This starts with choosing a super fund which is similar to a savings account, except you can only withdraw the money under certain circumstances. Just like your employer is legally responsible for paying your SG contributions, super funds have a responsibility to look after your money and help you invest it so your savings can grow faster. They get to charge fees for doing this, which are paid straight from your super account. Why do you need super? When you retire, you may be able to get some income from the Age Pension, an income support payment from Centrelink. But depending on your plans for retirement, how much you spend from day to day, and whether you rent or own your own home, the Age Pension may not be enough. Your super savings are there to give you the income you need to choose how you want to live in retirement. It can come in handy before you retire too. Super can help you learn about investing and even help you save for a home. Keep reading to find out more. Super power: 4 amazing things you can do with your savings Super doesn’t have to just sit there, waiting for you to spend in retirement. It can actually work really hard for you and help you get ahead in more ways than you think, like saving for a home. Invest it Why make investment choices in super when it’s easier to just get on with life? Here are three great reasons: Your super is a lot of money – unless you’re a champion at choosing to save money from your income, super is likely to grow into the biggest savings balance you’ll have in your lifetime. Why wouldn’t you make the most of it? Super funds make it easy to invest – super funds are required to have an investment strategy and make decisions they believe are in the best interests of their members. This means they do a lot of the work for you in coming up with investment options that suit your needs when it comes to taking risks and earning a decent return. It doesn’t mean there’s no risk and you can still lose your money though, so be sure to understand any investment decision before you make changes. Compounding is the easiest money you’ll ever earn – thanks to the magical multiplying effect of compounding, every extra dollar added to your super savings from your investments is another dollar that can earn you even more. Save it for … a home deposit If retirement seems too far away, there could be another goal on your list your super savings can help with. You can’t put it towards a car or your next big trip overseas, but what if you could save faster for your new home through your super? The First Home Super Saver Scheme (FHSSS) could see you on your way to owning your first home sooner: You can make extra payments into your super and keep them there until you’re ready to buy. While you do this you can be saving on tax – both on the money you’re earning from investing your super savings which is taxed at 15% and from the tax you could save by making extra payments into super from your pre-tax salary – these are called concessional or salary sacrificed contributions. Unlike a savings account which earns a fixed rate of interest, you can choose how to invest your super for a better return so your savings have the potential to grow faster. Save it for … a rainy day As we’ve seen during COVID-19, financial hardship can affect people for the most unexpected reasons. And during the early months of the pandemic, the Federal Government made it possible for people to withdraw their super if they had lost their income and didn’t have savings to fall back on and pay their bills. The window for this early withdrawal of super has closed now. But there are some other circumstances where you can apply to the ATO to access a limited amount from your super before retirement when you are in need of financial help to: Stop you from losing a home you own because you can’t pay the mortgage or council rates. Cover the cost of medical treatment, palliative care and/or disability services for you or a dependant. Cover the cost of a funeral or burial arrangements for a dependant. You can also apply to your … Read more

A step by step guide to help you through the decision making process. Firstly, what is life insurance? “Life insurance” is the general term we give to the range of insurance that looks after you if something unexpected happens to your body or mind. They are designed to protect your quality of life and the future you’ve planned for your loved ones. The category of life insurance includes: Life Insurance (sometimes called term life insurance or death cover) Total and Permanent Disability Insurance Critical Illness or Trauma Insurance, and Income Protection Insurance. Step 1. Which type of insurance do you need?  Each insurance protects your life in a different way. So the first thing to consider is, which types of insurance do you need to help you live the life you’ve planned? Life Insurance: If you want to protect your family’s future and give them options if you die or are diagnosed with a terminal illness, then that’s Life Insurance. Total and Permanent Disability Insurance: To help you live a better quality of life if you become permanently disabled and can’t work again, then Total and Permanent Disability (TPD) Insurance could be for you. Critical Illness or Trauma Insurance: If you have a serious illness that’s covered by the policy, like certain malignant cancers, then Critical Illness or Trauma Insurance helps support you while you recover. Income Protection Insurance: If you want to have an income to pay your living expenses, if you can’t work as the result of an illness or injury, then that’s what Income Protection Insurance is for. Step 2. How much do you want to be insured for? Everyone’s life and budget is different. So considering how much you want to be insured for is an important step. Life Insurance cover, TPD and Critical Illness or Trauma Insurance are paid as lump sums. Income Protection Insurance is a monthly payment if you can’t work as a result of injury or illness. Step 3. If you choose Income Protection Insurance, how long do you want your Waiting and Benefit Periods? A Waiting Period is the length of time you have to wait after an injury or illness that stops you from working, before you start accruing Income Protection Insurance benefits. It could be 4, 6, 13 or 26 weeks (shorter Waiting Periods generally cost more in premiums). A Benefit Period is the maximum length of time you could receive your Income Protection Insurance payments. (The longer your Benefit Period the higher your premium). Step 4. How do you want to structure your policy? To get the insurance plan that’s right for you, you should also consider how best to structure your policy. Some of the things to consider are: Variable Age-Stepped Premiums vs. Variable Premiums Variable Age-Stepped Premiums Variable Age-Stepped Premiums are calculated based on your age as at each Policy anniversary and the length of time you have had your Policy. Variable Age-Stepped Premiums generally increase as you age. The increases will generally be more significant as you get older. Variable Age-Stepped Premiums can also increase with the length of time you have had your Policy. This means your premium will generally increase at each Policy anniversary. Variable Premiums Variable Premiums are based on your age at the Plan start date. Each additional amount of cover will be priced based on your age at the date of increase. This will generally have a higher premium rate than the original cover. Variable Premiums are not fixed. There are a range of reasons why they may increase Variable premiums end at the policy anniversary before age 65 or 70 and will change to the corresponding Variable Age-Stepped premiums from that time until your Policy expiry. Standalone vs. Bundled Cover There are a number of different ownership options available depending on the plan you choose. The different types of ownership determine how the premiums are funded and may have different tax implications in respect of the premiums and benefits paid. The plans structures available are: Standalone: A claim paid under a standalone plan will not reduce the benefit amount of another standalone plan. Attached/Attaching: When a plan is attached to another plan, a claim paid under a plan will reduce the benefit amount on all other plans that it is attached to. All attached plans have the same policy owner(s) and are issued under one policy. Step 5. Enjoy This Australian Life The most important question to ask yourself is, how will life insurance help you protect those you love or assist your return to wellness, so you can continue to make the most of This Australian Life? Source: TAL

For many Australians, lifestyle choices are often seen as rewards for hard work. The big house. The new car. The overseas holidays. The designer labels. On the surface, these purchases seem like signs of financial success but when you dig deeper, they often come with hidden trade offs – and many don’t realise it until it’s too late. Buying vs. affording: there’s a difference Earning a high income doesn’t guarantee you can afford everything you want. People earning $150,000, $300,000, even $700,000 a year, can still feel like they are only just keeping up. The issue isn’t income – it’s spending. Many households end up locked into expensive lifestyles without considering: The full long-term cost. The impact of interest rates and inflation. The risk of unexpected changes to income. The opportunity cost of not building wealth. It’s one thing to buy something. It’s another to afford it in a way that doesn’t limit your financial freedom. What does ‘affordability’ really mean? Affording the big house or the luxury car isn’t just about managing repayments today. You can afford it when you can: Maintain your savings and investments. Absorb unexpected expenses without stress. Keep lifestyle choices aligned with your financial goals. Continue progressing towards financial freedom. Without these conditions, you might be stretching beyond your limits. The pressure of lifestyle creep As income grows, spending tends to grow too. It starts small – an upgrade here, a nicer holiday there – but over time, it can lead to: Reliance on debt. Reduced savings. Higher financial stress. Limited flexibility in case of emergencies. Some clients may feel like they’re working harder than ever but getting nowhere. Often, it’s not because they don’t earn enough – it’s because the lifestyle has crept up faster than their wealth. Four questions to ask before the big purchase Before making a major lifestyle choice, consider: Am I investing for my future at the same time? If the purchase limits your ability to invest, you might be prioritising short-term enjoyment over long-term security. Can I handle unexpected costs? Could you manage if interest rates rose, if you lost work for a few months, or if you faced a major expense? Is this decision aligned with my values? Are you buying for you or for how it will look to others? Will I still feel free? Financial freedom is about choice. If the purchase locks you into more work, more debt or more stress, is it really worth it? Finding the right balance It’s not about never having nice things. It’s about doing it on your terms. When you build wealth first, you can enjoy these lifestyle choices without worrying about how to fund them. Being intentional with money helps you: Avoid unnecessary debt. Maintain flexibility. Achieve long-term goals. Enjoy luxuries without the pressure. A lifestyle that works for you Ultimately, it’s about balance. You can have the house, the holidays and the nice things – but make sure they don’t come at the cost of your financial future.Source: Money & Life

Unsure how your relationship status affects your taxes? We’ve made it simple with our couples’ guide to tax. If you’re newly married, engaged or living with your partner, you might not be aware that there are some implications for your taxes. In Australia, you’re not required to lodge a combined tax return with your spouse each year. Instead, you need to declare your spouse’s taxable income on your individual tax return. The Australian Taxation Office (ATO) uses your joint income to work out whether: you’re entitled to a rebate for private health insurance (and how much) you need to pay the Medicare levy surcharge you’re entitled to a Medicare levy reduction you’re entitled to the seniors and pensioners tax offset. So, first things first, how do you know if you have a ‘spouse’ in the ATO’s eyes? Do I have a spouse or de facto partner? As far as the ATO is concerned, your spouse “includes another person (of any sex) who: you were in a relationship with that was registered under a prescribed state or territory law although not legally married to you, lived with you on a genuine domestic basis in a relationship as a couple.” You must declare all of the taxable income your spouse receives in your return, including: salary and wages dividends interest rental income foreign source income pensions and child support payments. How does this affect my tax return? There are some implications for your taxes, especially in the following areas. Private health insurance rebate The amount of rebate you qualify for is based on your income, so you might receive a different level of rebate as a couple than you did as an individual. You can check the rebate rates and income thresholds on the ATO website. Medicare levy surcharge High income earners who don’t have private patient hospital cover are charged a Medicare levy surcharge. If you have a spouse, the ATO will use your combined income to work out your Medicare levy surcharge. It’s calculated as a percentage of your income (up to 1.5%) and is payable in addition to the Medicare Levy. You may need to pay the Medicare levy surcharge if you don’t have private patient hospital cover. For more information visit the ATO website. If you’ve recently gained a spouse for tax purposes, and you don’t have private patient hospital cover, make sure to check whether your combined income puts you over the income threshold. Taking out private patient hospital cover will mean you don’t need to pay the surcharge – and you’ll be covered in case of an emergency. Medicare levy reduction There’s also a Medicare levy reduction available to low income earners. If you have a spouse and your family taxable income is below the threshold you might be eligible for a reduction. Combining your homes? Something that’s often overlooked when moving in with a spouse is the way it affects the capital gains tax (CGT) exemption on your main residence. If you both owned and lived in your own homes before moving in together; or you’re in an established relationship but lived separately during the year; and you plan to sell one or both of the properties, there could be CGT implications. Working out your CGT obligations can be tricky, so seek advice from a tax professional when preparing your return. If you’re still not sure whether you need to include your spouse’s details on your return, seek advice from a tax agent or speak to the ATO. If you leave your spouse out, the ATO could amend your tax return and there could even be financial penalties. Source: Money & Life  

Insurance; we don’t need it until we do. Learn all about the value of insurance for protecting your health, income and loved ones when life throws you a curveball. Protecting your wellbeing and your wallet “Do I really need this insurance?” It’s probably a question you’ve asked at some point when deciding whether to part with your money. But maybe the real question should be “What if I became ill, how would we cope?” Your health and wellbeing is the most important asset you have, so it pays to put in the hard yards and get your head around the tricky topic of insurance. Illness or injury can strike at any age or life stage, and it certainly doesn’t wait for the most convenient time to happen. Having peace of mind about having enough money if things take a nosedive could be your best investment yet, as well as helping you sleep at night. When insurance is a good idea Often insurance can come on your radar off the back of someone you know falling really ill or when you read something scary in your news feed. These events can make you stop and think but you don’t need to wait for a warning signal. In fact, getting on the front foot ahead of major life changes is often the best reason to get your insurance sorted. Here are some scenarios to have a think about: Landing your dream job – no job is completely secure and if you’re about to ramp up your income your lifestyle is probably going to upgrade too. If one day you lost your income, how long would you be able to pay the bills? Switching to an income that’s up and down – while the gig economy or a well paying contract has its lifestyle benefits, there is a trade off. You don’t benefit from things like sick leave or annual leave and if your income takes a sudden downturn, you might be left struggling for cash. Starting a family – when you settle down with a partner or have kids, it’s not just about you anymore. You’re going to have someone who truly depends on you and what happens to you will have a big knock on effect on them. Starting a family might also mean taking on a bigger mortgage. Getting your head around the important lingo – Insurance jargon is one thing you’ll need to make peace with as you navigate your options. If you’ve looked at the insurance section of your super statement, you may notice ‘Death’ insurance – but did you know it may also cover you for a terminal illness diagnosis? And what on earth is TPD? How do you know what constitutes Total and Permanent Disability? Don’t worry, we’ve got all the details below. Reading the fine print But first, a word about insurance policies. While having a general understanding of what type of policy covers what, it’s no substitute for reading your insurance product disclosure statement (PDS) and knowing exactly what you’re getting. Just like travel, or home and contents insurance, policies and the amount they pay out can vary a lot. So it’s worth reading the fine print on something so important in your life. Protecting your income If you’re working and you, or your family rely on your income to cover the bills, you should be giving serious thought to taking out insurance to protect your income. You have two options for this: Income protection – if you become ill or injured and can’t work for a short period of time, income protection will provide monthly payments up to around 70-85% of your income to help cover your expenses. This cover is available directly through an insurance company or via your super fund but it may not be automatic – you may have to opt in or apply for cover. Some generous employers may build income protection into a benefits package and pay your premiums for you. Total and permanent disability insurance (TPD) – as the name suggests, this cover is designed for when you experience a permanent disability that prevents you from ever working again. For example, if you were to have a serious heart attack or stroke that required six months’ of rehabilitation and you’re unable to return to work again for a job you’re qualified for, this cover may pay out. Again, you can get this type of cover directly through an insurance company or via your super fund. In fact, this cover may already be automatically included within your super fund. Cover is also available outside super, where you can apply for ‘own occupation’ insurance. Instead of paying out only if you are unlikely to ever work again in any reasonable job you could do, own occupation cover will pay you if you can’t return to the job you were working immediately before you were injured or became ill. Life cover – also known as ‘Death’ cover which pays a lump sum amount of money if you die. The pay out goes to whoever you nominate as beneficiaries or your estate. As with TPD, you may receive this type of cover automatically as part of your employer’s default super fund. And some life cover will also pay out if you are terminally ill, meaning you can use the funds to help your family before you pass away. Covering yourself for critical illness One of the most important types of insurance you can get is the one you can’t get through your super fund. Trauma (also known as critical illness) cover will pay you a lump sum of money if you are diagnosed with a serious illness, such as coronary and cancer illnesses. These conditions often need years of treatment or rehabilitation, which can be very hard to manage without any financial support. Trauma cover can work hand in hand with income protection, which gives you regular payments instead. Trauma cover isn’t cheap but it certainly pays off if you … Read more

Imagine an extra $500 landing in your super fund, courtesy of the government, simply for being proactive about your financial future. If you’re a low to middle income earner making after-tax contributions to your super without claiming a tax deduction, you could be eligible for this often forgotten about super boost. Here’s how it works. How does the super co-contribution scheme work? The superannuation co-contribution scheme is a government initiative aiming to assist low to middle-income earners save for their retirement. What that means is, depending on the amount of income you earn each year, the government may add to your super when you make a voluntary after-tax contribution, which you don’t claim a tax deduction for. The amount you receive will depend on how much you contribute as well as your income. Are you eligible for a super co-contribution? To be eligible for a super co-contribution from the government, generally you must: make an after-tax contribution to your super fund, which you don’t claim a tax deduction for lodge your annual tax return for the relevant year have a total income that’s less than $60,400 in the 2024/25 financial year for at least a part co-contribution (more info on this below) receive 10% or more of your income from eligible employment and/or running a business be less than 71 years old at the end of the financial year that you’re making the contribution have a total super balance below $1.9 million as at 30 June of the financial year prior to the year that you’re contributing not have exceeded your non-concessional contributions cap for the year not have held a temporary visa at any time during the financial year (unless you’re a New Zealand citizen or it was a prescribed visa). What do you need to do to get the super co-contribution? Provide your tax file number to your super fund You don’t need to apply for the super co-contribution but you will need to make sure you’ve provided your tax file number to your super fund. Generally, your super fund can’t accept after-tax contributions, or receive co-contributions on your behalf, if you haven’t provided your tax file number. Lodge your tax return You’ll need to lodge your annual tax return for the relevant year. The Australian Taxation Office (ATO) will then use the information provided in your tax return and the contribution information from your super fund to work out your eligibility. If you’re eligible, the ATO will automatically calculate the appropriate amount that’s owing to you and will typically deposit this into the super fund which you have made the contribution to. If you’ve recently retired and have closed your super account, it may be possible to have your co-contribution paid to you directly. How much will the super co-contribution be? If your total income is equal to or less than $45,400 in the 2024/25 financial year and you make after-tax contributions of $1,000 to your super fund, you’ll receive the maximum co-contribution of $500. If your total income is between $45,400 and $60,400 in the 2024/25 financial year your maximum entitlement will reduce progressively as your income rises. If your income is equal to or greater than the higher income threshold of $60,400 in the 2024/25 financial year, you won’t receive any co-contribution. You can use the ATO’s co-contribution calculator to estimate your entitlement and eligibility. What counts towards your total income? Your total income for this purpose includes your assessable income, reportable super contributions and any reportable fringe benefits, less any amounts you’re entitled to claim as a tax deduction for running your own business. Reportable fringe benefits typically arise where non-cash benefits are provided to you by your employer, such as a company car or lease vehicle. Are there other things you should be across? The income thresholds mentioned above are indexed each year in line with increases in average weekly earnings and may change in future financial years. If you exceed concessional and non-concessional super contribution caps, additional tax and penalties may apply. The value of your investment in super can go up and down, so before making extra contributions, make sure you understand, and are comfortable with, any potential risks. The government sets general rules around when you can access your super, which typically won’t be until you reach your preservation age of 60 years old and meet a condition of release, such as retirement. Where to go for further information Check the ATO’s website for up to date information. Source: AMP

#1: Set clear retirement goals The very first step in retirement planning is to define what you want your retirement to look like. When you hear the word retirement, what do you think of? Consider the following questions: When do you want to retire? Determine your ideal retirement age, keeping in mind that it may affect your savings strategy. While most of us may dream of retiring early, there are generally two retirement age rules that affect when most Australians can retire. These retirement age rules are the same for both men and women. Age 60: this is the earliest age where it’s possible to access your retirement savings under the ‘retirement’ condition of release or start a ‘transition to retirement’ pension. Age 67: this is the age when you can access Australia’s Age Pension, provided that you meet the eligibility criteria – which includes a residency test, income test and assets test. What lifestyle do you envision? Think about where you want to live, what activities you want to pursue and whether you plan to travel. Maybe it’s extensive travel, volunteering for a charity, spending more time with your family and friends or even still working part-time. What are your anticipated expenses? Estimate your future costs, including housing, healthcare, travel and leisure activities. You may also want to financially help your children or grandchildren. Having a clear vision will help you set specific, measurable goals. #2: Assess your current financial situation Next, take stock of your current finances to understand your starting point. This includes: Income sources: Identify all sources of income, such as salaries, rental income or investment returns. Assets and liabilities: List your assets (savings, investments, property) and liabilities (mortgage, loans) to gauge your net worth. This assessment will help you determine how much you need to save and invest to reach your retirement goals. You should also understand how much you currently have in super. Super is a long term investment vehicle that carries you through two phases of life. There is an accumulation phase followed by a retirement phase but it’s important to note that these aren’t mutually exclusive. You can have some of your super in an accumulation account and some in a retirement account as you navigate your way between the two. Understanding the difference is important though, as each phase has different tax treatment, rules and potential strategies. #3: Estimate your retirement income needs So, how much is enough? While we all hope for a simple answer, how much money you need in retirement differs for everyone. How much are you spending today? Do you think you’ll spend more, less or the same in retirement? And by how much: 5%, 10%? Consider: Government benefits: understand your eligibility for the Age Pension. For information about payments for veterans, see income support on the Department of Veteran’s Affairs (DVA) website. For other types of payments, including carers allowance, use Centrelink’s payment finder. Pension plans: if you have a pension, understand its benefits and when they will be available. Withdrawals from retirement accounts: plan how much you’ll need to withdraw from your savings to cover any gaps. Consider trying a retirement calculator to determine how much you’re likely to have if you continue saving at your current rate and compare that to how much Association of Superannuation Funds of Australia (ASFA) indicates you might need. #4: Create a savings and investment strategy With your retirement income needs estimated, develop a strategy to accumulate the necessary funds. This involves: Setting a savings target: Based on your income needs and how much you’ve saved so far, determine how much you need to save annually. Choose appropriate investment options: Decide how to invest your savings, balancing risk and return. Diversification is key to managing risk in retirement. As you approach retirement you may prefer to dial down the risk of your investments (both inside and outside of super) and opt for a more conservative strategy. Speak to a financial planner – they can help you with this. It is also important that you understand and review how your super is invested. #5: Monitor and adjust your plan Retirement planning is not a one-time task; it requires ongoing monitoring and adjustments. Regularly review your financial situation, savings progress and market performance. Consider: Life changes: Major events, such as marriage, divorce, or the birth of a child or grandchild, can impact your retirement plans. Review your investments approach: Regularly review your investments to ensure they still meet your financial goals, risk level and personal circumstances. A financial planner can also assist you with this. Manage withdrawal rates: Be aware of how much you’re withdrawing from your pension (if you have one) each year to avoid going through your savings too quickly. Establish a routine for annual reviews or consult a financial planner to keep your plan aligned with your goals. #Extra tip: start planning today Whether you’re 25 or 55, it’s never too early or too late to start preparing. The earlier you start planning for retirement, the more prepared you’ll be for the future you envision. And by acting early, you can take advantage of compound interest, allowing your savings to grow significantly over time. Plus, starting early gives you the flexibility to navigate unexpected expenses and life changes without financial stress. Don’t wait for the perfect moment – begin mapping out your retirement goals today. Your future self will thank you! Source: MLC

It’s important to understand the tax implications of your investments especially when markets move up and down. Our five step end of financial year checklist will help keep you on top of your tax for 2024-25. As the 2024-25 financial year draws to a close, it’s important to understand the tax implications of your investments. This is particularly important when markets are volatile, as the capital gains tax on your investments will be affected by when you made your investment, when you sold it and whether your investment increased or decreased in value. What is capital gains tax? Capital gains tax (CGT) is the tax you pay on profits made from the sale of investments, adjusted for any cost base amounts and any eligible capital gains tax discounting. When you sell an asset and make a capital gain, the taxable amount of the capital gain is included as part of your assessable income for tax purposes. Although it is referred to as ‘capital gains tax’, it’s part of your taxable income. You’ll need to calculate a capital gain or capital loss for each asset you dispose of unless an exemption applies. If you have a: net capital gain in a year, it will generally increase the tax you need to pay. net capital loss in a year, you can carry it forward to a future year to offset against future capital gains. For individual taxpayers who have owned an asset for 12 months or more, there is a CGT discount of 50%, meaning you pay tax on only half the net capital gain on that asset. When you have a clear picture of your capital gains and losses, you’ll have a better understanding of your potential tax liabilities. End of financial year checklist for investors Below are some key issues to be aware of as 30 June approaches. Understand your responsibilities The Australian Tax Office (ATO) gives regular guidance on capital gains tax and highlights its key areas of focus for each financial year, so it’s important to be aware of what it’s tracking, and what your responsibilities are. This year, the ATO has flagged it will be on the lookout for a broad range of issues, some of which include: inappropriate calculations of the CGT discount. trusts over claiming deductions to reduce net income. residents not including distributions from foreign trusts. property development income classified as a capital gain. omission of income on disposal of real property. franking account balance discrepancies. Previous areas of focus have included checking whether investors declared all their income and warning investors not to file their tax return before including income from multiple sources. Have a clear picture of your investments It’s critical to have a clear picture of all your investments so you can be sure to include all your investment income if it’s subject to CGT. Cash in bank accounts, high interest savings accounts and term deposits, as well as fixed interest investments such as bonds, may generate earnings that need to be included in your assessable income. Investments that may be subject to capital gains tax include: investment properties. shares owned directly, or through managed funds and exchange traded funds (ETFs). alternative investments including cryptocurrency, art and other collectibles, commodities and private equity. Generally, the family home is exempt from capital gains tax for Australian residents, providing it: has been the home of you, your partner and other dependants for the whole period you have owned it^. hasn’t been used to produce income – that is, you have not run a business from it, rented it out or bought it to renovate and sell at a profit. is on land of 2 hectares or less. If you don’t meet all these conditions, you may still be entitled to a partial exemption. You can work out the proportion that is exempt using the ATO’s CGT property exemption calculator. Understand capital gains It’s important to understand how your investments have performed so you’re not surprised by unexpected tax liabilities. Also key is understanding when any investment income is earned or when you realise capital gains. This is generally when you receive the income or you dispose of an asset, such as by selling it, triggering a capital gains tax event – which means you’ll need to report a capital gain or capital loss in your tax return#. In addition, if you invest in managed funds, part of your distributions from the managed fund may include capital gains from the managed fund selling the underlying assets, which you also need to include in your tax return. Can you reduce your capital gains tax? If you have a poorly performing investment that has decreased in value since you purchased it, and you decide to sell it before the end of the financial year, the capital loss can be used to offset any other capital gains you have made in the same year, resulting a lower net capital gain. Alternatively, where you are left with a net capital loss, you can generally carry that loss forward and use it to offset capital gains in future years. However, be aware that the ATO monitors ‘wash sales’ – which is when an investor sells an asset to realise a loss just before the end of the financial year and then immediately buys back the same asset. This type of arrangement is covered by the general anti-avoidance rules in the Tax Act and can attract significant penalties. Can you make a tax-deductible super contribution? Another way of reducing your potential CGT liability is by making a tax-deductible super contribution (taxed at 15%) to potentially reduce your taxable income which is taxed at your marginal rate (which may be higher than 15%). Under the concessional contribution ‘carry-forward rules’, if you have unused concessional cap amounts from the past five financial years*, you may be able to carry them forward to increase your contribution limit of $30,000 in the current financial year. Conditions apply, so please check with your tax … Read more