by Amanda Cassar | Jan 18, 2025 | Australian Economy, Finances, Financial Stress
The Cost-of-Living Challenge in 2025
Living on the beautiful Gold Coast or in sunny Queensland, is a dream for many, but rising living costs and inflation are posing challenges for households and investors alike. Whether you’re renting, paying off a mortgage, or looking to invest, 2025 is the year to rethink your financial strategies to stay ahead. Here are some smart ways to beat the cost-of-living challenge in 2025.
At Wealth Planning Partners, we believe financial challenges can be opportunities when approached with the right mindset. In this article, we’ll share actionable tips to manage the cost of living, optimise your finances, and secure your future on the Gold Coas
1. Practical Budgeting Tips to Combat Inflation
Inflation impacts everything—from groceries to utilities—so now is the time to take control of your budget and beat the rising cost of living.
Track Your Spending
Start by understanding where your money is going. You can use budgeting tools like Humaniti, Frollo, or Goodbudget to categorise expenses and identify areas where you can cut back. Or even try your banks own budget on their App or the free MoneySmart Budget to get started.
Reduce Non-Essential Spending
- Review subscriptions (streaming services, gym memberships) and eliminate what you don’t use.
- Plan meals and shop smarter to reduce food waste and overspending.
- Use apps like Shopback or Honey to find discounts and cashback opportunities.
Negotiate Your Bills
- Compare energy providers and switch to more affordable options. Websites like Energy Made Easy can help.
- Bundle your insurance policies to reduce premiums.
- Contact service providers for better deals on internet, phone, and utilities.
Pro Tip: The 50/30/20 rule is a great budgeting method: 50% on needs, 30% on wants, and 20% on savings or debt repayment.
2. Rentvesting vs. Buying: What Makes Sense for Gold Coasters in 2025?
If buying property feels out of reach, the strategy of rentvesting could be your ticket to building wealth while maintaining your Gold Coast lifestyle.
What Is Rentvesting?
Rentvesting involves renting where you want to live (e.g., a beachside suburb) while investing in more affordable properties elsewhere. It allows you to get into the property market sooner without compromising your current lifestyle.
Benefits of Rentvesting
- Affordability: Invest in areas with lower entry costs while avoiding expensive mortgages in high-demand suburbs.
- Flexibility: Live where you love while owning assets elsewhere.
- Wealth Building: Build equity and benefit from capital growth over time.
When Does Buying Make More Sense?
Buying is a better option if:
- You plan to live in the home long-term.
- You have a stable income and a strong deposit.
- Your mortgage repayments are comparable to local rent.
Pro Tip: Use online tools like the rent vs. buy calculators from realestate.com.au or Domain to assess your situation.
3. Are You Overpaying on Your Loans? Refinancing Tips for Rising Interest Rates
With interest rates stabilising but remaining higher than pre-pandemic levels, it’s essential to review your home loans and personal debt to avoid overpaying.
Why Refinancing Matters
Refinancing can help you:
- Secure a lower interest rate.
- Reduce monthly repayments.
- Pay off your loan faster.
How to Assess Your Loan
- Check Your Current Rate: Compare it to the rates being offered by competitors.
- Look for Hidden Fees: Consider exit fees, break costs, or application fees.
- Consider Fixed vs. Variable: Fixed rates offer predictability, while variable rates may save you money if interest rates drop.
Steps to Refinancing
- Use tools like Canstar or RateCity to compare home loan rates.
- Speak to a mortgage broker who can help negotiate a better deal.
- Consider consolidating personal debt (credit cards, personal loans) into your mortgage to reduce overall interest payments.
- Simply call your bank and ask for a better deal – it’s surprising how often this works and saves a tun of paperwork!
Pro Tip: Even a 0.5% reduction in your interest rate can save you thousands of dollars over the life of your loan.
Key Takeaways: Take Control of Your Financial Future
Living on the Gold Coast or even in Queensland, doesn’t mean you have to feel the pinch of rising costs. By creating a solid budget, exploring smart strategies like rent-vesting, and reviewing your loans, you can stay ahead of inflation and build long-term financial security.
At Wealth Planning Partners, we’re here to help you make informed financial decisions tailored to your unique needs. Whether it’s budgeting advice, property investment strategies, or loan refinancing support, our expert team has you covered.
Ready to Take Action? Let’s Talk!
If you’re ready to find some smart ways to beat the cost-of-living challenge and take control of your finances, book a consultation with Wealth Planning Partners today. Together, we’ll create a strategy to secure your future.
Contact us on 07 5593 0855 to book a time.
by Amanda Cassar | Jan 15, 2025 | Money, Superannuation
As retirement approaches, many Australians seek ways to boost their superannuation and secure a comfortable future. One powerful strategy worth considering is unlocking the power of the Downsizer Contribution.
Introduced by the Australian government, this initiative helps older Australians maximise their retirement savings while simplifying their living arrangements.
Let’s explore how unlocking the downsizer strategy works and how it can benefit your wealth planning.
What is the Downsizer Contribution?
The Downsizer Contribution allows Australians aged 55 and over to contribute up to $300,000 from the sale of their primary residence directly into their superannuation fund. Couples can contribute up to $600,000 combined, offering a significant boost to retirement savings.
Key Points:
- The property must have been owned for at least 10 years.
- The home must be exempt from capital gains tax under the main residence exemption.
- Contributions must be made within 90 days of settlement.
- There is no work test or upper age limit for eligibility.
- This contribution doesn’t count towards concessional or non-concessional caps.
Benefits of the Downsizer Strategy
- Boost Superannuation Savings: A tax-effective way to increase retirement funds.
- No Contribution Caps: Downsizer contributions are separate from standard contribution limits.
- No Impact on Work Test: Retirees can contribute without meeting the work test requirement.
- Simplify Lifestyle: Moving to a smaller home can reduce maintenance and living costs.
- Estate Planning Flexibility: Provides more options for managing wealth distribution.
Is the Downsizer Strategy Right for You?
While the Downsizer Contribution offers many advantages, it’s important to consider:
- Impact on Age Pension: Additional super funds could affect pension eligibility.
- Centrelink Assessment: Funds transferred to super are assessed under the assets test.
- Selling Costs: Factor in real estate fees, moving expenses, and stamp duty (if applicable).
How to Make a Downsizer Contribution
- Sell Your Home: Ensure it meets the eligibility criteria.
- Notify Your Super Fund: Submit the Downsizer Contribution form before or at the time of the contribution.
- Make the Contribution: Deposit funds within 90 days of settlement.
- Consult a Financial Adviser: Tailor the strategy to suit your retirement goals.
Final Thoughts
The Downsizer Strategy is a valuable tool for Australians looking to strengthen their retirement savings and enjoy a more manageable lifestyle. However, it’s essential to weigh the pros and cons and seek professional advice to make informed decisions.
At Wealth Planning Partners, we specialise in creating personalised retirement strategies to help you make the most of your financial future. Contact us today to explore how the downsizer strategy can work for you.
Disclaimer: This blog is for informational purposes only and does not constitute financial advice. Please consult a qualified financial adviser for tailored advice.
by Amanda Cassar | Dec 17, 2024 | Economy, Property
Why the Gold Coast Property Market Is a Hot Topic in 2025
So, what is the future of property on the Gold Coast. The glitter strip continues to be a shining star in the Australian property market. With its stunning beaches, growing infrastructure, and thriving lifestyle appeal, it remains a prime location for investors, homeowners, and developers alike.
But as we move into 2025, the question many Gold Coasters are asking is: Is it the right time to buy, sell, or hold?
At Wealth Planning Partners, we know that property decisions are some of the biggest financial moves you’ll make. In this article, we’ll walk you through the key trends and opportunities shaping the Gold Coast property market in 2025, so you can make an informed choice with confidence.
Gold Coast Property Market Trends to Watch in 2025
1. Population Growth and Migration Are Fueling Demand
The Gold Coast remains a magnet for interstate migration, particularly from cities like Sydney and Melbourne. Recent statistics show strong population growth, driven by the lifestyle appeal and affordability compared to other major Australian cities. With continued migration expected in 2025, demand for housing—particularly family homes—will likely remain strong.
2. Infrastructure Projects Continue to Boost Property Value
Ongoing infrastructure development is a key driver of property value. Projects like the Light Rail Stage 3, the Coomera Connector, and upgrades to health and education facilities are enhancing livability and accessibility across the region. As these projects come to fruition, property values in surrounding suburbs are poised for growth. Check out Core Logic RP Data for further ideas…
Ideas for Some Key Suburbs to Watch:
- Coomera – Proximity to transport and amenities makes this a rising star.
- Pimpama – Continued development and family appeal.
- Southport – A hub for business and lifestyle.
3. Housing Supply Constraints Are Impacting Prices
While demand is increasing, housing supply remains constrained due to limited land availability and rising construction costs. This imbalance between supply and demand is likely to push property prices higher, particularly in high-demand areas.
4. Interest Rates and Their Impact
With interest rates stabilising in 2025, many investors and homeowners are finding renewed confidence in the future of property on the Gold Coast. Fixed rates remain attractive for those looking to secure long-term affordability, while property owners with existing loans may explore refinancing options to optimise their financial positions.
Should You Buy, Sell, or Hold Property in 2025?
Buy: Opportunities for First-Time Investors and Upgraders
For those considering buying property on the Gold Coast, 2025 presents strong opportunities in growth suburbs and lifestyle areas. Investors can benefit from rising rental yields, driven by increased demand and low vacancy rates.
Buying Tips:
- Focus on suburbs with upcoming infrastructure projects.
- Consider dual-income properties or homes with granny flats for added rental return.
- Lock in competitive loan rates early where possible.
Sell: A Strategic Move for Long-Term Owners
If you’ve held your property for a number of years, 2025 might be the perfect time to sell and capitalise on the market’s upward trajectory. High demand and limited supply could drive competitive buyer interest. It could be time to downsize after all!
Selling Tips:
- Invest in small improvements to boost your property’s value (e.g., fresh paint, landscaping).
- Work with local agents who understand the nuances of the Gold Coast market.
Hold: Long-Term Gains for Savvy Investors
For property owners with a strong equity position, holding may be the best strategy. Continued growth in demand, infrastructure, and lifestyle appeal ensures that property values are likely to appreciate further in the coming years.
Holding Tips:
- Review your loan structure and consider refinancing if rates are favourable.
- Focus on adding value through renovations or extensions.
- A garden tidy up, lick of paint or modernising fittings can be lower cost options for high impact.
Top Suburbs for Property Investment in 2025
If you’re wondering where to invest, here are a few standout Gold Coast suburbs worth considering:
- Nerang – Affordable homes with great transport links
- Tugun – Lifestyle appeal with proximity to the beach.
- Ormeau – Family-friendly with excellent infrastructure growth.
Key Takeaways: Making the Right Move in 2025
The future of the Gold Coast property market remains a robust investment opportunity as we head into 2025. Whether you decide to buy, sell, or hold, the key to success lies in understanding the local trends and aligning your strategy with your financial goals.
At Wealth Planning Partners, we’re here to help you navigate these decisions with clarity and confidence. Our expert team specialises in investment advice, financial planning, and wealth creation strategies tailored to your needs. Why not check out our YouTube video with our Director Amanda Cassar interviewing Alex Minter of Astute Property for more information on the future of property.
Ready to Make a Move? Let’s Talk!
If you’re considering a property decision in 2025, let’s connect. Book a consultation with the Wealth Planning Partners team today and take the next step towards building your financial future.
Contact us on 07 5593 0855 to arrange an appointment.
by Amanda Cassar | Feb 14, 2024 | Insurance & Protection, Uncategorized
It’s Valentine’s Day.
Love is in the air, and some of us are searching for that perfect gift to express our affection for those closest to us. And despite a grisly past, this day has come to be known for lovers… So just what is the ultimate gift of love this Valentine’s Day?
While chocolates and flowers are lovely, this year, consider giving a gift that transcends the ordinary. That is, the gift of protection and security. Yes, we’re talking about life insurance. The ultimate expression of love and care for your partner and family. In this post, we explore why life insurance is not just a financial product. It is a symbol of unwavering commitment and love.
5 Reasons Insurance is a Gift of Love
- Protecting Your Loved Ones: Life insurance provides a financial safety net for your loved ones in the event of your passing. It ensures that they can maintain their standard of living, pay off debts, cover funeral expenses. Also, allowing them to achieve long-term financial goals, even in your absence. By securing adequate life insurance coverage, you’re showing your commitment to protecting your family’s future. No matter what life may bring!
- Peace of Mind: One of the greatest gifts you can give your partner is peace of mind. Knowing that they and your family will be taken care of financially can alleviate stress and anxiety. This allows you both to focus on enjoying the present moments together. With life insurance in place, your loved ones can feel reassured that they have a financial cushion to rely on. This in turn gives the freedom to live without fear of financial hardship.
- Planning for the Unexpected: None of us can predict the future, but we can plan for it. Life insurance enables you to prepare for the unexpected and ensure that your loved ones are not left financially vulnerable if tragedy strikes. It provides for your spouse, supports your children’s education, and maintains your family’s lifestyle. Life insurance allows you to fulfill your responsibilities and promises, even when you’re no longer here.
- Demonstrating Long-Term Commitment: Giving the gift of life insurance is more than just a financial transaction – it’s a declaration of your long-term commitment and love. It shows that you’re thinking about your partner and family’s future. And also, that you want to continue caring for them, even beyond your lifetime. By taking proactive steps to secure their financial well-being, you’re strengthening the bond of trust and love that forms the foundation of your relationship.
- Tailored Solutions for Every Couple: Life insurance policies come in various forms and can be funded from personal or retirement savings. As a couple, you can customize your coverage to suit your unique needs, goals, and budget. Whether you’re newlyweds starting your journey together or seasoned partners planning for retirement, there’s a life insurance solution that can align with your specific circumstances. Thereby providing the protection you both deserve.
This Valentine’s Day, why not go beyond the traditional gifts and consider giving your loved one something truly meaningful – the gift of life insurance.
Ensure the future of your loved ones today
Basically, by safeguarding their financial future, you’re expressing your love and devotion in a tangible and enduring way. Yes, the ultimate gift of love this Valentine’s Day. Reach out to your Wealth Planning Partners’ adviser today to explore your life insurance options or call us on 07 5593 0855. So why not take the first step towards securing a lifetime of love and protection for those you hold dear?
Happy Valentine’s Day! Above all… don’t forget the chocolates!
by Amanda Cassar | May 8, 2023 | Australian Economy, Debt Management
by Amanda Cassar | Mar 20, 2023 | Business, Economy, US Economy
Silicon Valley Bank Failure!
*Note: This article was published in March 2023 following the Silicon Valley Bank collapse and reflects the information available at that time.
Market volatility has been elevated over the past week driven by the failure of the Silicon Valley Bank (SVB). Global banking system volatility is on the rise!
The unfolding situation in the United States could be seen as having echoes of the Global Financial Crisis (GFC) from 2008. This, combined with recent falls in Credit Suisse shares (which appear to be unrelated to US mid-tier banks), has caused jitters. This is despite SVB’s failure being the second largest in US history, when put into perspective. However, it’s assets are less than one tenth of J.P.Morgan’s, one of the major players in the US banking system.
The US Federal Deposit Insurance Corporation (FDIC) has already taken control of the SVB to navigate the collapse. They act to ensure the best interest of the financial system. Further announcements from U.S. Treasury have sought to calm the broader market of the financial system’s health. Also, to reassure the market the relevant tools are available. There will be no GFC-style bailout, nor will one be necessary.
American financial systems are considered to be well capitalised overall. According to Mark Zandi, Moody’s Chief Economist, the size of the smaller banks at risk is not likely to pose any threat to the financial system.
How it happened
• SVB has been operating in a relatively unusual manner. Instead of lending the deposits received, the Bank invested in long dated fixed interest rate bonds. This exposed the Bank’s assets to significant interest rate risk which was not sufficiently hedged.
• Given rising interest rates, the value of the bonds held to cover customer deposits have fallen significantly. The need to sell fixed interest rate securities to cover the withdrawal requests resulted in realised losses.
• Earlier in the month, a single sale resulted in a $1.8 billion loss. This led the Bank to raise capital to increase the balance sheet health. The capital raise failed, which prompted customers with deposits with the Bank to withdraw their funds. In turn, resulting in a run on the Bank.
• Within 48 hours the Bank was bankrupt with the FDIC taking control.
• The US Federal Reserve and US Government have guaranteed customer funds at SVB will be paid back in full.
• Major investment bank Credit Suisse experienced panic after the share price dramatically fell, with banking operations under pressure.
Overnight, the Swiss National Bank and the Swiss financial regulator announced support for the Bank. They announced, “Credit Suisse meets the higher capital and liquidity requirements applicable to systemically important banks.” They further confirmed they will “provide liquidity to the globally active bank if necessary.”
What to do?
Banking events like the SVB collapse remind us of the importance of diversification and long-term planning. If you’re unsure how global events influence your portfolio, personalised advice is key.
This current market volatility, while significant, does not alter our long-term views on how portfolios are positioned. It is important to manage your portfolio in line with long-term objectives, aligned to risk tolerance. Please give us a call to discuss your portfolio if you still have concerns.
by Amanda Cassar | Sep 19, 2022 | Self Managed Superannuation Funds
Time is running out to apply for a Director Identification Number (director ID)
You may have heard about the new rules which require directors of Australian companies to obtain a Director Identification Number (director ID). It is a unique 15-digit identifier that directors apply for once and keep forever.
The following provides some useful further information.
As a director of my SMSF’s corporate trustee do I need a director ID?
The new requirement to obtain a director ID applies to all directors of corporate trustees of an SMSF. This obligation also applies to any directors who may have resigned from all director roles after 31 October 2021. This applies even if you have no intention to ever be appointed as a director of an Australian or foreign company.
How long do I have before I need to get my director ID?
Individuals that were a director of any company prior to 1 November 2021 have until 30 November 2022 to get a director ID. This transitional period also applies to newly appointed directors of corporate trustees of an SMSF. This is provided they were an existing director, of a company, before 1 November 2021.
Otherwise, first time directors are now required to have a director ID before they are appointed as director of any company.
What is the fastest way to apply for a director ID?
With 30 November 2022 fast approaching, we strongly encourage all directors to apply for their director ID now. The fastest way to apply for your director ID is online at abrs.gov.au/directorID.
To access the director ID application online, you will use your myGovID to log in to ABRS (Australian Business Registry Services) online. This director ID demonstration video will show you how to apply for your director ID online.
What to do if you do not have a myGovID already?
A myGovID is different to your myGov account. Your myGov account allows you to link to and access online services provided by the ATO, Centrelink, Medicare and more. myGovID is an app that enables you to prove who you are and log-in to a range of government online services.
Don’t already have a myGovID? You will need to set this up before you can apply for your director ID online. Refer to mygovid.gov.au/setup for more information.
You will need to choose your identity strength, noting that ‘standard’ identity strength is the minimum required for a director ID.
What if I can’t set up myGovID online?
Where you are experiencing difficulties setting up your myGovID, the ATO encourages you to contact them on 13 62 50.
To speed up the phone application, please have your TFN ready as well as the information listed below, required to verify your identity.
If you’re unable apply online or over the phone, the ATO will provide you with a paper form to complete. This is the least preferred option and will require you to provide certified copies of documents to verify your identity.
Can we help you get your director ID?
You must apply for your director ID yourself, so that the ATO can verify your identity.
Verify your identity against your ATO records: once you have logged into ABRS online using myGovID, you’ll need your tax file number, residential address held by the ATO, and information from two of the following:
· bank account details (where your tax refunds or payments are made and received)
· an ATO notice of assessment
· a dividend statement
· Centrelink payment summary
· a PAYG payment summary (this is different to your income statement or your PAYG instalment activity statement).
How can we help?
Have questions or would like further information about director IDs? Please feel free to give me a call on 07 5593 0855. Or arrange a time for a meeting, so we can discuss your requirements in more detail. Although we are unable to apply for a director ID on your behalf, we would be more than happy to guide you through the process. And where possible, source documents to help you verify your identity with the ATO.
For other information, resources, and timely updates relevant to your SMSF, please refer to the SMSFA’s trustee education platform. SMSF Connect.
by Amanda Cassar | Jun 28, 2022 | Investments
Staying the Course
Heightened global markets volatility can easily trigger kneejerk reactions by panicked investors.
Widespread selling, triggered by the Russia-Ukraine crisis, has been behind recent big swings on global financial markets. This includes stock markets, commodities and currency markets.
As serious as the current events are, heightened market volatility is nothing new. The onset of the COVID-19 pandemic also triggered major falls on global markets two years ago.
In March 2020, the Australian share market dropped 35%+ over 20 trading sessions. It reached its lowest level in over a decade. Very soon after, it and other global financial markets staged a quick and very strong rebound.
By the end of 2020, share markets were back near record levels, and last year they continued to build momentum.
Investors who didn’t panic, chose to ride through all that early 2020 markets volatility. Those who have remained invested ever since, have been well rewarded with both capital and income growth over time.
In volatile market conditions, staying the course is generally the best investment strategy.
Three mistakes to avoid during a downturn
1. Failing to have a plan
Investing without a plan is an error that invites other errors. Chasing performance, market-timing, or reacting to market “noise” driven by headlines included. Temptations multiply during downturns, as investors looking to protect their portfolios seek quick fixes.
2. Fixating on losses
Market downturns are normal, and most investors will endure many of them. The number of shares you own won’t fall during a downturn unless you sell. In fact, the number will grow if you reinvest your funds’ income and capital gains distributions. And any market recovery should revive your portfolio too.
3. Overreacting or missing an opportunity
In times of falling asset prices, some investors overreact by selling riskier assets. And, then moving to government securities or cash equivalents. It’s a mistake to sell risky assets amid market volatility in the belief that you’ll know when to move your money back to those assets.
Time in the markets is what counts
Trying to time markets is virtually impossible. Just being invested in the market, and making ongoing contributions, will ensure you never miss out on long-term growth.
If you’re unsure about your current investment portfolio, call the Wealth Planning Partners Team today to discuss a strategy for you.
Source: Vanguard March 2022
Reproduced with permission of Vanguard Investments Australia Ltd
Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) is the product issuer. We have not taken yours and your clients’ circumstances into account when preparing this material so it may not be applicable to the particular situation you are considering. You should consider your circumstances and our Product Disclosure Statement (PDS) or Prospectus before making any investment decision. You can access our PDS or Prospectus online or by calling us. This material was prepared in good faith and we accept no liability for any errors or omissions. Past performance is not an indication of future performance.
© 2022 Vanguard Investments Australia Ltd. All rights reserved.
Important:
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.
by Amanda Cassar | Jun 27, 2022 | Economy
Volatility is Normal
The volatility that we’ve seen over the last six months, while significant, is not an unusual occurrence for a normal and healthy functioning market. Heightened volatility is an uncomfortable experience in the short- term. Equity markets and some parts of the bond markets will continue to be an important contributor to overall long-term returns.
We appreciate that the current environment looks concerning given falls in markets and likely further interest rate rises during 2022. With the possible risk of recession, however it is important to continue to stay invested. Manage your portfolio in line with your long-term objectives, aligned to your risk tolerance. We encourage investors to discuss their portfolio with their adviser to ensure that it meets their personal needs, objectives and is in line with their risk tolerance.
Key Summary Points:
- Stock and Bond Markets have fallen dramatically this week, continuing the trend since the start of 2022.
- High inflation in the U.S. was the cause – coming in at 8.6%. The highest in 40 years. This prompted the U.S. Federal Reserve to raise interest rates by 0.75%. Domestically, the RBA raised rates by 0.5%.
- The Inflation is being caused by a range of factors, including supply chain disruptions due to the COVID crisis and the war in Ukraine.
- Investors fear rising interest rates, to combat inflation, will hurt economic growth and cause a recession.
- Fear of slower economic growth has hurt the share market, which performed strongly in 2020 and 2021.
- Stocks market and Bond market falls means they are now more attractively priced.
- Take a long-term view and stay invested, with diversification, in line with your risk tolerance.
- Time in the market, is more important than timing the market.
The chart above shows the recent dramatic increases in US Inflation with the colours reflecting where the inflation has come from. Mainly from energy prices, services and food.
The COVID crisis and the war in Ukraine caused reduced supply of goods and services. Also, just after the COVID crisis, governments and central banks increased the money supply to support markets and economies. The increased money supply, meant more money bidding for the same quantity of goods, causing rising prices. This will likely continue throughout 2022, as it takes time to work through the global economy.
What’s ahead?
We expect inflation and interest rates to continue rising in 2022. This will have an effect in the short-term, slowing economic growth. We also expect inflation to reduce in 2023 and this should take pressure off the global economy. This is because supply side shocks should reduce as the world opens up.
An end to the war in Ukraine would also help the inflation situation, as supply of many key commodities would increase.
Markets have fallen substantially and are therefore more attractively priced than recent all-time highs at the end of 2021. There are asset classes that should do well in the coming periods, including floating rate Bond markets and asset classes that benefit from inflation. That is, Infrastructure and Commodities.
One of the important lessons in investing is that time in the market, is more important than timing the market. The following chart demonstrates that short term movements in markets (in this case the ASX 200) can be extremely volatile. This is what we have witnessed in the past six months. Investing for the longer term (the blue line) provides a much more stable outcome. As we continue working through heightened volatility, keep the longer-term in mind.
Long Term Returns (Blue Line) More Stable than Short Term Return (Green Line)
If you’re worried about your personal situation, give the Wealth Planning Partners team a call on 07 5593 0855 to chat further.
Disclaimer
The information in this report is general advice only and does not take into account the financial circumstances, needs and objectives of any particular investor. Before acting on the advice contained in this document, you should assess your own circumstances or seek advice from a financial adviser. Where applicable, you should obtain and consider a copy of the Product Disclosure Statement, prospectus or other disclosure material relevant to the financial product before making a decision to acquire a financial product. It is important to note that investments may go up and down and past performance is not an indicator of future performance.
The contents of this report should not be disclosed, in whole or in part, to any other party without the prior consent of the IOOF Research Team and Advice Licensees. To the extent permitted by the law, the IOOF Research team and Advice Licensees and their associated entities are not liable for any loss or damage arising from, or in relation to, the contents of this report.
For information regarding any potential conflicts of interest and analyst holdings; IOOF Research Team’s coverage criteria, methodology and spread of ratings; and summary information about the qualifications and experience of the IOOF Research Team please visit https://www.ioof.com.au/adviser/investment_funds/ioof_advice_research_process
by Amanda Cassar | Jun 14, 2022 | Retirement
Are you approaching retirement?
Chances are the funding of your lifestyle in retirement may be on your mind!
Take steps now to avoid getting caught short on retirement income and live the retirement lifestyle you want. It’s time to take control of your retirement.
The qualifying age is increasing by six months every two years until it reaches 67 in July 2023. The Age Pension age increased to 66 and a half on 1 July 2021.
If for example, you are planning to retire at 60 you will need to wait until you’re 67 before you can apply for the Age Pension. You’ll have to rely on your own savings and super in the interim, making it crucial to ensure you have enough money put away for later years. But the good news is that there’s still time to grow your retirement savings. Take control of your retirement savings now.
Boost your super
Contributing more to your super can be a reliable route to bolstering your retirement fund. By making extra contributions through salary sacrifice, you can grow your super and at the same time reduce the amount of income tax you pay. The government will tax your salary sacrificed contributions, within the allowable concessional contribution cap, at 15 per cent, which may be much lower than your marginal tax rate.
Making non-concessional or after-tax super contributions is another option. Generally, you can contribute up to $110,000 each financial year if your total super balance is less than $1.7 million at 30 June of the last financial year. To understand how these contributions work, it’s wise to get professional advice.
Beef up your savings
Your personal savings outside of super can supplement your super payments in retirement. But are they growing enough now to provide you with some level of income when you retire?
To build up your savings, you may have to invest part of it and make sure it’s growing faster than the rate of inflation over the long term. You should seek professional advice to see what investments are appropriate for you.
Know your entitlements
Besides the Age Pension, you may be eligible for other government benefits and concessions. For example, you may be eligible for a concession card such as the Pensioner Concession Card (if you are receiving the Age Pension), Commonwealth Seniors Health Card or the state based Seniors Card. Concession cards like these may entitle you to discounts on some commercial and public services. Concessions that allow you to buy prescription medicine at a discount may also be available.
But keep in mind that these benefits have strict eligibility rules. There’s also no guarantee that these entitlements will still be available by the time you retire. So, take charge of your retirement.
Working with your financial adviser, you can develop a strategy that helps ensure you’ll be well provided for regardless of changes to pension policies. If you’d like to discuss your own retirement needs, reach out to the team at Wealth Planning Partners to chat about your situation.
