It’s not too late for super planning in your 60s

31 March, 202125 March, 2021 Updated on25 March, 2021 Education, Retirement, Superannuation

For most Australians, their 60s is the decade that marks retirement. For some this means a graceful slide into a fulfilling life of leisure, enjoying the fruits of a lifetime of hard work. However, for many it means a substantial drop in income and living standards. So how can you make the most of the last few years of work before taking that big step into retirement?

How are we tracking as a nation?

In 2015-2016, 50% of men aged 60-64 had super balances of less than $110,000. For women the figure was a more alarming $36,000 – not even enough to provide a single person with a ‘modest’ lifestyle.

Last minute lift

If your super is looking a little on the thin side there are a few ways to give it a boost before retirement.

– Make the most of your concessional contributions cap. Ask your employer if you can increase your employer contributions under a ‘salary sacrifice’ arrangement. Alternatively, you can claim a tax deduction for personal contributions you make. Total concessional contributions must not exceed $25,000 per year.

– Investigate the benefits of a ‘transition to retirement’ (TTR) income stream. This can be combined with a re-contribution strategy that, depending on your marginal tax rate, can give your retirement savings a significant boost.

– Review your investment strategy. A common view is that as we near retirement our investments should be shifted to the conservative end of the risk and return spectrum. However, in an age of low returns and longer life expectancies, some growth assets may be required to provide the returns that will be necessary to support a long and comfortable retirement.

– Make non-concessional contributions. If you have substantial funds outside of super it may be worthwhile transferring them into the concessionally taxed super environment. You can contribute up to $100,000 per year, or $300,000 within a three-year period. A work test applies if you are over 65.

– The 60s is often a time for home downsizing. This can free up some cash to help with retirement. The ‘downsizer contribution’ allows a couple to jointly contribute up to $600,000 to superannuation without it counting towards their non-concessional contributions caps.

Get it right

This important decade is when you will make the key decisions that will determine your quality of life in retirement. Those decisions are both numerous and complex.

Quality, knowledgeable advice is critical, and wherever you are on your path to retirement, now is always the best time to talk to your licensed financial adviser. Contact us today for a chat.

The information provided in this article is general in nature only and does not constitute personal financial advice.

Roadmap to retiring young

25 October, 20238 November, 2023 Updated on8 November, 2023 Budgeting, Retirement

The dream of retiring young is one that captivates many peoples’ imaginations. The freedom to live life on your own terms, doing what you want, when you want is undeniably appealing, but is it attainable? We say yes! It doesn’t just happen, though. As with any goal, it takes planning and dedication along with a clear understanding of when and how you expect to achieve that goal. Early retirement, as a concept, means different things to different people. Therefore, the first step on the road to your early retirement is to be clear about what it will look like, starting with: With an understanding of what retirement means to you, you can begin the process of charting a course to achieving it. Develop a roadmap to early retirement by considering: Attaining any financial goal requires discipline. Coach yourself to say ‘no’ to indulgences in the present, remembering that with the right roadmap and financial know-how, you really can make your dream of early retirement come true. The information provided in this article is general in nature only and does not constitute personal financial advice. 

Retirement wrongs that could send you broke!

14 September, 202229 September, 2022 Updated on29 September, 2022 Finance

While retirement should be the best years of your life, many Australians make simple, avoidable mistakes with their finances that can leave them without the funds to really enjoy life. However, with some simple good advice at the start of retirement, these mistakes can usually be avoided, leaving retirees to focus on what is really important and that is, simply enjoying life. Making emotional investment decisions Many people reach retirement age and panic that they don’t have enough money. This then prompts them to make high risk investments in the vague hope of catching up on lost time. Too often their dreams of big profits blind them to risks and many end up losing a chunk, if not all, of their money. All retirement savings are irreplaceable and should be invested with this in mind. Ignoring your portfolio At the other end of the spectrum are retirees who think they have so little saved for retirement that it doesn’t matter what they do with it, in terms of their investments, it won’t make any difference to their lives. This is almost as big a mistake as taking excessive risks. No matter how much money you have saved for retirement, you should be pro-active in making sure these funds are safely invested and providing for you. Miscalculating your retirement funds Many misjudge either the total amount they have to retire on, and/or, the level of income it will generate. This is particularly the case when the decision is made to keep an investment property in retirement. The high value can often give a false sense of financial security, while the actual income generated after all the costs are deducted, can be extremely low. Determine just how much money you have saved for retirement, conservatively judge how much income will be generated from those savings and ensure you don’t spend more than your investments generate. Changing asset allocations to conservative assets, such as cash For many, retirement is the first time they have had to manage or decide how to invest a large amount of money. This can be unnerving at the best of times. Throw in a small market downturn and it is not unusual for people to panic and sell perfectly good investments. This is, of course, the worst option. By panicking and selling investments when the market has taken a step down, losses are locked in and any chance of recovering those funds as the market improves, is lost. Keeping up with the “Joneses” Too often, we’re swept along by what others do. Focus on how you want to live. Think about what will make you happy in retirement and then invest your savings safely so you can focus on enjoying life. For most, the things that make them happiest are free. Time spent with grandchildren, walking barefoot on a beach, or spending time in the garden, all cost very little money and are a fabulous boost to the body, health and mind. If you have any doubts at all about how you should structure your finances, make the decision to get quality advice before you make any of these mistakes. It will be the best investment you make in retirement. The information provided in this article is general in nature only and does not constitute personal financial advice.

Dealing with Post-Christmas Blues

18 December, 202419 December, 2024 Updated on19 December, 2024 Budgeting, Education

The days leading to Christmas, holidays and celebrations are exciting, frenetic times. They’re a whirl of parties and social engagements, gifts and food to be purchased and travel arranged. The rush to get things organised builds into a great festive crescendo then…well, it’s over. If you’ve ever awoken on New Year’s Day feeling a tad flat, you’re not alone. Don’t beat yourself up; the Post-Christmas Blues is a well-documented condition. After the sparkle and colour of festivity, the hamster-wheel banality of real life seems pale and unappealing. Worse, the weather is hot, the kids are bored and fractious, and taking decorations down is never as much fun as putting them up. Then the bills arrive. The despondency you’re feeling is real, in fact, in a 2015 study by the National Alliance on Mental Illness (a US based mental health organisation), two-thirds (64%) of people surveyed admitted to feelings of depression and anxiety after Christmas. Symptoms include fatigue, tension, frustration, sadness and a sense of loss. If you’re nodding while reading this, the good news is there are steps you can take to reduce the physical, emotional and financial impact of the Post-Christmas Blues. Here are some ideas. Exercise – exercise every day, even a walk around the block, and if you have people staying over get up early and take time out for yourself. Get plenty of sleep – stick to a normal bedtime routine and ensure you don’t burn yourself out. Eat and drink in moderation – it’s not called the silly season for nothing. Moderation means enjoying yourself without overdoing it. Maybe try these two simple guidelines: 1. Never go to a party on an empty stomach. 2. Learn to love mineral water. If you feel pressured to drink alcohol, take mineral water and a slice of lime, over ice, in a spirits glass. They’ll never know the difference! Gift buying and holiday arranging is exciting, and it’s easy to lose track of how much you’ve spent. We have 12 months lead time so planning ahead is your best strategy. Consider these ideas: List who you’re buying for and set a spending limit. Don’t feel pressured to spend more or keep up with anyone else. If your credit card has taken a beating over the holiday season, speak to your adviser about a debt reduction plan. They’ll help you get back on track, and then structure a budget for the next year. The December/January period can be difficult for many reasons. If you feel yourself becoming overwhelmed, don’t soldier-on. Organisations like Lifeline Australia (13 11 14) or Beyond Blue (1300 22 46 36) are only a phone call away. Alternatively, if it’s a relaxing chat you’re looking for, why not ask a friend over for coffee? It may be just what they need too. The information provided in this article is general in nature only and does not constitute personal financial advice. 

Reviewing your insurance as you get older

7 October, 202017 September, 2021 Updated on17 September, 2021 Insurance, Retirement

So, you are seriously starting to think about your retirement. The kids are finally more independent, the mortgage is less than it was, and the super is more than it was. You look at your monthly bank statements and one particular debit is always there. The insurance premium. You have been paying it diligently for years now, maybe decades. But, for what? You’ve not claimed and ‘gained’ anything so far. At this stage and age, it might be very tempting to cancel your policies and save a few dollars. Before you do, just consider what you could be losing in a future that’s not yet written. It could be hundreds of thousands of dollars. More to the point it could be your home, your lifestyle, or your health – the very thing you are hoping to protect. Statistically you are more likely to claim the older you get. Look at these figures: Type of cover Average age people cancel policy Average age people make a claim Income Protection 45 46 Total & Permanent Disability (TPD) 49 48 Trauma Insurance 44 49 People often don’t realise an insurance policy is not an ‘all or nothing’ concept and there are options available. For example, as you get older and your debts and commitments reduce, so might the level of cover you require. When cover is reduced, so is the premium. Take care though, once a policy is in place it’s easy to reduce the cover but much harder to increase the amount, particularly as you get older. It often only takes a phone call to lower the amount but countless medical tests to increase it or apply again. Before you rush off and reduce your cover, it’s important to tailor the amount of cover to your potentially changing circumstances, and this is where we can help. There are many other options available including requesting a temporary freeze on the premiums; paying annually instead of monthly; moving your cover into your super fund (this is not applicable to all insurance however); or given that your adult children will usually be the ones who will eventually benefit, ask them to share the cost of the premiums! The basic idea of insurance is not to put you in a better position than you were – it’s there to protect what you have. Regardless of what age you are, think twice about cancelling insurance completely. There are always other options available. Ask us for guidance before you make any decisions. The information provided in this article is general in nature only and does not constitute personal financial advice.

Three steps to your children’s financial success

27 January, 202117 September, 2021 Updated on17 September, 2021 Budgeting, Education

For many of us, our first experience of banking and savings was the school Savings Account Program. But in 2019 the Australian Securities and Investments Commission (ASIC) raised concerns that these accounts had little lasting impact on children’s savings behaviour. All parents want their children to be better-off than they were – more secure and financially independent, but the big question remains: where do you start? Ushering your children toward financial security can be a simple three-step process. Step 1: Create good habits Start early; learning to save is one of life’s great lessons. In an increasingly cash-less society, it can be difficult for children to understand the value of money and how to save. Help them by: Providing a piggy bank for very young children, or a glass jar through which they can see their savings mounting up. Teaching the difference between needs and wants. Lead by example with your own savings habits. Involving them in the household budget; compare prices at the supermarket and demonstrate bill-paying. Paying pocket money for age-appropriate chores and helping them to create a mini-budget, apportioning money to: spending on anything they want. donating to charity to instil a sense of community and empathy, saving for a goal; helpful in teaching kids restraint and how to avoid impulse buys. Step 2: Inform Nothing is free; water in the tap, electricity and even the internet don’t just happen by magic. One of the best ways to teach kids about responsible money handling is to explain debt and the consequences for not meeting financial obligations, which segues neatly into a discussion about personal credit scores. People with better credit scores find seeking finance approval easier and often qualifies them for more advantageous lending deals and better interest rates. Helping kids understand the concept of a credit score can be a little daunting, so try these tips: Brush up on your knowledge first. Try our eLearning section for some great general information. Don’t focus on numbers, explain that it’s about financial behaviour over time. Avoid complexity and keep the information age-relevant. Use examples. Discuss mistakes you’ve made in the past, explain how you rectified them. Step 3: Consider where you’re saving Record-low interest rates have taken the fun out of savings, but don’t let that stop your kids from calculating how much they can earn from the right type of account. The Moneysmart website has savings calculators that kids can play with and learn from. The banking and finance industry offers a plethora of accounts specifically designed to encourage kids to save. Help them research the account that will suit them; consider fees and interest. Additionally, searching online will reveal a range of websites, blogs and apps dedicated to engaging and educating kids about money and savings. Introduce your kids to good habits while they’re young, and you’ll be setting them up for success. Finding the most child-appropriate plans and accounts that specifically suit your child’s needs can be a minefield. Our financial advisers will work with you to assist you to guide your children into a financially secure future. The information provided in this article is general in nature only and does not constitute personal financial advice.

Being sensible with Buy Now Pay Later this silly season

7 December, 20221 December, 2022 Updated on1 December, 2022 Budgeting

Move over debit and credit cards; consumers are flocking to Buy Now Pay Later (BNPL) services. Afterpay, Zip Pay and several similar payment solutions allow shoppers to take home their goodies now while paying them off via a few weekly, fortnightly or monthly payments. There’s no interest payable as such, although fees are charged for late payments. A survey by Mozo reveals that 30% of Australian adults have one or more BNPL accounts and we’re not afraid to use them. Afterpay, our most popular BNPL service, achieved sales of $4.3 billion across Australia and New Zealand in the 2019 financial year, nearly double its sales of the previous year. With the nation set to splurge around $27 billion on Christmas, it’s a safe bet that plenty of that spend will be by BNPL. But with 60% of those surveyed by Mozo admitting that BNPL lead them to buy things that they wouldn’t have otherwise, it begs the question: how to use this payment option sensibly during the silly season? 1. Set your limits Make sure you have a budget for your Christmas spend, and use it to help resist the temptation of impulse purchases. 2. Track your spending Don’t just track your BNPL spending. Make sure you review credit and debit card purchases, too. Are you staying within budget across all your spending methods? 3. Avoid fees Around one third of BNPL users have missed at least one payment. While late fees may seem modest, they can add up. 4. Don’t repay BNPL loans with a credit card If you don’t pay off your entire credit card bill within the interest-free period, adding your BNPL repayments to the card may see you paying a high rate of interest on your purchases. Better to use a debit card or direct debit from your bank account, and making sure there’s enough money in the account to meet payments. 5. Avoid BNPL if you’re saving for a home loan Lenders may look at your use of BNPL as a sign that you don’t have significant savings and are living from payday to payday. The lower your debt, of all types, the easier it will be to get a mortgage. 6. Have a happy festive season Used wisely, BNPL can help you jingle your bells and put the merry in your Christmas. Just make sure you know what you’re signing up for and that you can meet all of the regular payments. Take care, and you’ll be able to enjoy the start of the New Year without a financial hangover. For further budgeting tips and financial advice, talk to us. We’re here to help. The information provided in this article is general in nature only and does not constitute personal financial advice.

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