Knox Financial

27/08/2024

This is our last post as Knox Financial. Over the next week or so everything will be merged with Acuity Wealth Management. Looking forward to working with you all in the future!

27/08/2024

MAKING THE MOST OF YOUR RETIREMENT FINANCES

You’ve waited a long time to reach retirement, so how do you make sure your hard-earned savings go the distance with you?

There are a range of steps you can take before and after retiring to make the most of your retirement income.

GETTING IN TRAINING

For many people, switching to retirement can mean adjusting to a lower annual income. This is often estimated as two thirds of your salary at retirement (source: MoneySmart) but can be more or less depending on your circumstances and lifestyle.

If you are nearing retirement, it can be helpful to start training. That is, set your living budget according to the annual income you expect to have in retirement. There are a few benefits to doing this:

1) Understanding whether your retirement income covers your needs and wants.
If it doesn’t, you may be able to consider your options, like continuing to work, even in a part- time capacity to supplement your retirement savings.

2) The potential for extra savings.
Adjusting your budget early means you might have a surplus from your current income and a range of options for using this surplus. Some options for this increase to your savings might be to pay off debts, contribute extra to your superannuation or even purchase specific items that might be important for your retirement plans.

3) Time to adjust to different spending habits.
Studies have shown it can take 66 days to form a new habit1. Your spending habits and accompanying lifestyle are also a habit. Learning how to live to a new budget before you reach retirement gives you time to retrain your behaviour while you still have the financial flexibility to manage budget blow outs.

If you need help planning your budget, speaking to a financial counsellor may be a valuable option. Alternatively, if you are comfortable with your budget but would like to understand your retirement investment options, speaking to a financial adviser may help you with a strategy, including transition to retirement options like living on a part pension and moving more of your working salary into superannuation (if eligible and suitable).

PENSION VS SUPER

Your superannuation doesn’t automatically convert to a pension when you reach retirement age. You generally need to instruct your superannuation provider on what you would like to happen and you have a range of options for this. Some Australians may choose to take their superannuation savings as a lump cash sum for their bank account, while others transfer their money to retirement products like an account-based pension (also known as an allocated pension) to provide a regular income stream from the money saved in their superannuation. Retirement phase products are tax-free compared to the superannuation environment. There are pros and cons to each phase and the style of products in each so you may consider discussing it further with a financial adviser.

A recent Organisation for Economic Co-operation and Development (OECD) report Preventing Ageing Unequally suggested that taking a lump sum at retirement increases the risk of falling into poverty as it crystallises your gains or losses at a particular date, leaving you with a set sum to live on. By contrast, options like account-based pensions mean your superannuation money continues to be invested in the market so you may have more flexibility with your finances. By the same token though, you may still be exposed to market movements, including downturns. In either scenario, it helps to look at the complete picture of your assets and likely lifespan to assess how best to manage your superannuation savings in retirement.

Note that there are restrictions on how much you can transfer to retirement style products from superannuation. The maximum amount you can hold in a retirement phase product like an account-based pension is $1.9 million. For some, this may mean that you retain much of your savings within the superannuation environment instead and transfer amounts over time to your pension product.

Many Australians may also be eligible for the Age Pension – in full or in part. This is determined by a means test which looks at your income, real estate and other assets, investment and superannuation. If you have a partner, their details will also form part of assessing your eligibility. You can find out more and how to apply at Services Australia.

LIVING FOR THE YEAR

For those who continue to have their savings invested in some form, such as through an account-based pension, flexible spending on luxuries can make a difference to their finances. In fact, your own grandparents probably took this approach too.

For example, you might choose to have an overseas holiday in a good financial year where your retirement investments may generate additional returns to buffer you from needing to dip too much into your savings.

Or you might adjust how much you spend on luxuries in a tough financial year. You might still take a holiday for example, but it might be a camping trip in a holiday park or a short driving holiday instead.

Alternatively, some retirees also continue some form of paid work to supplement their income and allow for the occasional luxury and to give them flexibility in tougher financial years. There can be social, mental and physical benefits to continued work too.

GETTING OLDER HAS SOME BENEFITS

It’s not just about wisdom and a lifetime of memories. Australian retirees have access to a range of benefits to help them spread their money further.

A great starting point is obtaining a Seniors Card. The benefits can vary across states and can include discounts on state transport, tourist attractions and even dining at some restaurants.

Some retirees may also be eligible for the Commonwealth Seniors Health Card which can assist with your healthcare costs.

Look out for seniors' events and specials too. A range of places from restaurants to galleries offer special events or discount days for senior citizens – typically on dates that the average weekday worker wouldn’t go. There is an additional bonus to this, being that you can often enjoy a quieter atmosphere than in busier periods.

Retirement can be an exciting phase of your life and being prepared with a flexible approach can make a difference – not just to your finances but your stress levels too.
If you need help with the transition, speaking to a financial adviser can help you with your strategy.

1. Grohol, J. (2009). Need to Form a New Habit? 66 Days. Psych Central. Retrieved on November 19, 2017.

Source: BT

07/08/2024

"Exciting news! Knox Financial is merging with Acuity Wealth Management to enhance our services and expand our capabilities. Together, we’ll provide even greater value and opportunities for our clients. We appreciate your support and look forward to this new chapter!"

28/10/2022

WHAT ARE SOME INVESTMENT OPTIONS OUTSIDE OF SUPER

When it comes to investing, you have two options – inside or outside of super.

Super, being a longer-term investment designed to fund your retirement, comes with a number of advantages such as being lightly-taxed (which can mean, more money to invest in your financial future) but does have some constraints including not being able to access your super, generally, until you have reached retirement.

While super is a popular option for many, there are also a number of investment options to consider outside of super – you just need to find a mix that fits your needs.

MANAGED INVESTMENTS

While you’ve probably heard of managed funds, there are other types of managed investments such as managed accounts and Exchange Traded Funds (ETFs). The main appeal of managed investments is that they take the hard work out of selecting which assets to buy and sell and when to do it – a professional investment manager can do so for you. Like all other investments, however, there are risks associated with the above. In addition to the risks that apply to investing generally, for managed investments specifically, risks also include the possibility that the investment manager may not perform as expected against their respective benchmarks.

HERE ARE THE TYPES OF MANAGED INVESTMENTS YOU COULD CONSIDER:

Managed funds – investment vehicles where the money contributed by a large number of investors is pooled and managed as one overall portfolio by a professional investment manager. Investors purchase units in the fund, which entitles them to an interest in a pool of assets with the unit holders.

Managed accounts – these are similar to managed funds, except that instead of owning an interest in a pool of assets, a portfolio of assets is bought specifically for you (which makes you the beneficial owner of all the assets in your portfolio). This also means they can be more tax efficient.

Exchange Traded Funds – ETFs are listed on the share market, which means they can be bought and sold like shares. They also allow you to invest in a range of asset classes or sectors.

CASH INVESTING

It’s no surprise that many may be tempted to stash their cash in an account – doing so gives you the ability to access your money at short notice. Your money can also usually be accessed with low, or potentially zero fees applying to withdrawals (except in some cases, for example, early access to term deposits). Keep in mind though, in the investment world, lower risk can mean lower returns, and the key downside of cash is that your money won’t generate capital growth (so unless you earn more than the rate of inflation, after tax, and reinvest those returns, inflation can lower the purchasing power of your money).

INVESTING IN SHARES

As an investment, shares have lower and fewer upfront costs, which is why they’re quite popular among investors. There are no ongoing costs and depending on the share you choose to invest in, shareholders can earn regular income through dividends as well as enjoying the potential for long-term capital growth. Having said that, it’s important to understand that share prices rise and fall and the payment of dividends and the return of capital are not guaranteed.

As mentioned above if you aren’t sure which shares to add to your portfolio, remember you can choose managed funds, managed accounts or ETFs where you pick the type of portfolio that suits your investment goals.

INVESTING IN PROPERTY

Over time, a well-located property could generate long-term growth and income returns. Another major appeal of owning property is its perceived stability relative to the share market, where values can vary as a consequence of how easy it is to buy and sell shares. A property investment, on the other hand, can give you a tangible asset that delivers a sense of investment security as well as capital growth.

Keep in mind, however, that the upfront costs of property can be significant, with stamp duty, legal fees and optional costs, such as pre-purchase pest and building inspections, potentially adding roughly 5% extra onto the property’s purchase price. And while the tenant too wears some of the property costs, related to direct usage, it’s the landlord who generally pays the majority of costs such as repairs, maintenance and insurance, which is why property is generally regarded as a longer term investment.

Source: BT

28/10/2022

WHAT YOU SHOULD KNOW ABOUT CREATING YOUR WILL AND ESTATE PLAN

If you want to protect your family and assets, it’s worth documenting what you’d like to happen if you can’t make your own decisions later in life or if you pass away.

If you’ve got people in your life who you love and assets you’d like to be distributed in a certain way, you might be at a point where you’re thinking an estate plan would probably make good sense.

WHAT IS AN ESTATE PLAN?

An estate plan involves drawing up a will, but also much more. It involves formalising how you want to be looked after (medically and financially) if you’re unable to make your own decisions later in life, as well as documenting how you want your assets to be protected while you’re alive and distributed after you pass away.

HOW DOES AN ESTATE PLAN HELP?

YOU CAN MAKE YOUR WISHES KNOWN

One of the benefits of a solid estate plan is you can formalise your wishes in writing. This can help if someone challenges what you said you wanted after you pass away, or if you’re unable to speak for yourself.

YOU COULD MINIMISE DISAGREEMENTS

Unfortunately, disputes can happen when assets need to be distributed among people when no clear guidelines have been set.
Being prepared with an estate plan could go a long way in preventing such disagreements should family members need to divide assets among themselves or make other hard decisions on your behalf.

YOU MAY IMPROVE TAX CONSEQUENCES FOR YOUR HEIRS

As the distribution of assets (including your income) can come with different tax obligations, a good estate plan could minimise any tax that your heirs may need to pay.
If they decide to sell something they’ve inherited, for instance, they may need to pay capital gains tax depending on what type of asset it is.

CONSIDERATIONS WHEN CREATING AN ESTATE PLAN

DO YOU WANT YOUR WILL TO BE LEGALLY BINDING?

A solicitor or estate planning lawyer can help you draw up a will that is legally binding and covers what you’d like to happen with your assets, children (if you have any) and funeral when you pass away.

It’s important this document is kept up to date and that any changes to your situation (marriage, divorce, separation or otherwise) are accounted for, so those who matter most are taken care of.

While it’s also possible to draw up your own will (there are various kits available online), these may not be adequate in complex situations, which is why engaging an estate planning professional, even if you think your situation is relatively simple, will generally be worthwhile.

Keep in mind, if your will is deemed invalid, your estate will be distributed according to the law in your state, which may not align with your wishes, and claims could be made by unintended recipients.

WHO ARE YOUR NOMINATED SUPER AND INSURANCE BENEFICIARIES?

You might assume that how and in what proportions you want your super to be distributed can be included in your will, but this isn’t necessarily the case.

You’ll need to nominate your beneficiaries with your super fund and you’ll also want to make sure you’re across how long different nominations are valid for.

If you don’t make a nomination, the super fund trustee could use their discretion to determine who your super money goes to.

Meanwhile, if you have insurance outside of super, you’ll also want to make sure you’ve listed your beneficiaries on your insurance policy and that those beneficiaries are also kept up to date.

WILL YOU APPOINT AN ENDURING POWER OF ATTORNEY TO MAKE DECISIONS IF YOU CAN’T?

There may come a time when you’re unable to make legal or financial decisions on your own because of advanced age or medical issues. Granting power of attorney means you assign someone to make these decisions on your behalf should a situation like this arise.

For this reason, it’s important to choose someone you trust, as they’ll be responsible for looking after your bank accounts, ongoing bills, and even selling your house if you need to move into a care facility.
It’s also worth noting that you may be able to appoint a different type of power of attorney depending on what tasks you’d like this person to carry out on your behalf. For example, you may want your son or daughter to make general lifestyle decisions for you, while you appoint a financial adviser to make financial decisions.

HAVE YOU CHOSEN AN EXECUTOR TO HELP CARRY OUT YOUR WISHES WHEN YOU’RE GONE?

Generally, an executor is the person legally in charge of managing and distributing your estate, according to the terms set out in your will, with the assistance of a solicitor.

When you nominate an executor in your will, which your solicitor should also have a copy of, it’s important to let your family know, to avoid disputes after you pass away.

The executor should also have a good understanding of their duties and where your will and other important documents are kept. You may also want to let your family know where this information is stored.

The executor will typically be responsible for things like making funeral arrangements, ensuring your debts are paid and bank accounts closed, and collecting any life insurance.

They’ll also usually need to apply to the court for a grant of probate, which is a legal step that’s required before your estate can be distributed. A grant of probate certifies that your will is valid.

DO YOU NEED HELP WITH YOUR ESTATE PLAN?

Estate planning can be a complex process and there could be legal and tax implications if you don’t set things up correctly and understand the fine print.

For these reasons, it’s important to speak to a legal professional and your financial adviser before making any decisions and signing on any dotted lines.

Source: AMP

14/02/2022

WHAT YOU SHOULD KNOW ABOUT CREATING YOUR WILL AND ESTATE PLAN

If you want to protect your family and assets, it’s worth documenting what you’d like to happen if you can’t make your own decisions later in life or if you pass away.

If you’ve got people in your life who you love and assets you’d like to be distributed in a certain way, you might be at a point where you’re thinking an estate plan would probably make good sense.

WHAT IS AN ESTATE PLAN?

An estate plan involves drawing up a will, but also much more. It involves formalising how you want to be looked after (medically and financially) if you’re unable to make your own decisions later in life, as well as documenting how you want your assets to be protected while you’re alive and distributed after you pass away.

HOW DOES AN ESTATE PLAN HELP?

-YOU CAN MAKE YOUR WISHES KNOWN

One of the benefits of a solid estate plan is you can formalise your wishes in writing. This can help if someone challenges what you said you wanted after you pass away, or if you’re unable to speak for yourself.

-YOU COULD MINIMISE DISAGREEMENTS

Unfortunately, disputes can happen when assets need to be distributed among people when no clear guidelines have been set.

Being prepared with an estate plan could go a long way in preventing such disagreements should family members need to divide assets among themselves or make other hard decisions on your behalf.

-YOU MAY IMPROVE TAX CONSEQUENCES FOR YOUR HEIRS

As the distribution of assets (including your income) can come with different tax obligations, a good estate plan could minimise any tax that your heirs may need to pay.

If they decide to sell something they’ve inherited, for instance, they may need to pay capital gains tax depending on what type of asset it is.

CONSIDERATIONS WHEN CREATING AN ESTATE PLAN

DO YOU WANT YOUR WILL TO BE LEGALLY BINDING?

A solicitor or estate planning lawyer can help you draw up a will that is legally binding and covers what you’d like to happen with your assets, children (if you have any) and funeral when you pass away.

It’s important this document is kept up to date and that any changes to your situation (marriage, divorce, separation or otherwise) are accounted for, so those who matter most are taken care of.

While it’s also possible to draw up your own will (there are various kits available online), these may not be adequate in complex situations, which is why engaging an estate planning professional, even if you think your situation is relatively simple, will generally be worthwhile.

Keep in mind, if your will is deemed invalid, your estate will be distributed according to the law in your state, which may not align with your wishes, and claims could be made by unintended recipients.

WHO ARE YOUR NOMINATED SUPER AND INSURANCE BENEFICIARIES?

You might assume that how and in what proportions you want your super to be distributed can be included in your will, but this isn’t necessarily the case.

You’ll need to nominate your beneficiaries with your super fund and you’ll also want to make sure you’re across how long different nominations are valid for.

If you don’t make a nomination, the super fund trustee could use their discretion to determine who your super money goes to.

Meanwhile, if you have insurance outside of super, you’ll also want to make sure you’ve listed your beneficiaries on your insurance policy and that those beneficiaries are also kept up to date.

WILL YOU APPOINT AN ENDURING POWER OF ATTORNEY TO MAKE DECISIONS IF YOU CAN’T?

There may come a time when you’re unable to make legal or financial decisions on your own because of advanced age or medical issues. Granting power of attorney means you assign someone to make these decisions on your behalf should a situation like this arise.

For this reason, it’s important to choose someone you trust, as they’ll be responsible for looking after your bank accounts, ongoing bills, and even selling your house if you need to move into a care facility.

It’s also worth noting that you may be able to appoint a different type of power of attorney depending on what tasks you’d like this person to carry out on your behalf. For example, you may want your son or daughter to make general lifestyle decisions for you, while you appoint a financial adviser to make financial decisions.

HAVE YOU CHOSEN AN EXECUTOR TO HELP CARRY OUT YOUR WISHES WHEN YOU’RE GONE?

Generally, an executor is the person legally in charge of managing and distributing your estate, according to the terms set out in your will, with the assistance of a solicitor.

When you nominate an executor in your will, which your solicitor should also have a copy of, it’s important to let your family know, to avoid disputes after you pass away.

The executor should also have a good understanding of their duties and where your will and other important documents are kept. You may also want to let your family know where this information is stored.

The executor will typically be responsible for things like making funeral arrangements, ensuring your debts are paid and bank accounts closed, and collecting any life insurance.

They’ll also usually need to apply to the court for a grant of probate, which is a legal step that’s required before your estate can be distributed. A grant of probate certifies that your will is valid.

DO YOU NEED HELP WITH YOUR ESTATE PLAN?

Estate planning can be a complex process and there could be legal and tax implications if you don’t set things up correctly and understand the fine print.

For these reasons, it’s important to speak to a legal professional and your financial adviser before making any decisions and signing on any dotted lines.

Source: AMP

03/03/2021

Andrew is proud to support the 2021 Freedom Ride. He's taking to a bike for the 20km ride on 27th March 2021. Want to join him??

The Freedom Ride is a community based family oriented bike ride
to raise important funds for Pathways Tasmania.

Pathways Tasmania offers several programs aimed at helping some of the most vulnerable people in our society. These include a shelter for homeless young men and a 12 month residential drug rehabilitation program for men and women. For more information about Pathways Tasmania visit: https://pathwaystas.org.au

There's also fun for all the family from 10am - 2pm at the Esplanade, New Norfolk.

There will be food and coffee, jumping castles, kids activities, spot prizes supplied by My Ride and TroubleSmiths and MORE.

Hope to see you there!

For more info go to:
https://www.facebook.com/pathwaysfreedomride

To sponsor Andrew in his fund raising effort, click here: https://www.freedomride.org.au/sponsor/?rid=844

VISION: The Freedom Ride raises awareness and financial support to assist the rehabilitation of Tasm

14/08/2020

How has COVID-19 changed Australian consumer spending habits?

Australian spending habits have changed markedly in the last few months. Consumers continue to worry about the strength of the economy, the duration of the pandemic and overall public wellbeing. But while Australian consumer spending remains slow, we’re seeing signs of recovery across most categories and grocery spending, in particular, is finally stabilising.

With restrictions easing in some states, some Australians can spend more time outside their homes. The rapid increase in online spending has slowed, and, for those in states with eased restrictions, a return to more ‘normal’ consumption habits are resuming. However, it’s likely the increased appetite for spending via online channels will stay with us beyond the pandemic.

Economic impact of consumer spending

Governments face a constant dilemma when managing key economic indicators and the impact of the current pandemic has been no different.

• Should a government stimulate spending to delay or avoid a recession?
• Or should a government cut business taxes to create jobs and increase wages?

The problem is, without spending, businesses will eventually stop trading and be forced to lay off workers, leaving the government with less tax revenue. If the economy is left to rely on exports, which as we’ve seen isn’t sustainable during the global pandemic, this could cause supply chains to grind to a halt.

The only way to support businesses long term is then to rely on borrowing, which creates debt-laden balance sheets and potentially hampers future recovery and growth. To a degree, that’s why we have seen our own reserve bank cut rates to historical lows.

Consumer spending is a more significant influencer on the economy than many people realise. Even a small reduction in Australian spending habits has a dramatic impact.

Digital disruption for retailers

For the retail sector, it’s a story of mixed fortunes. Shops forced to close face the difficult decision about whether it’s still financially viable for them to re-open. But on the positive side, online sales have accelerated rapidly with some digitally-agile businesses recording exceptional uplifts in sales figures and profits.

While retail sales have bounced back since restrictions were initially eased at the beginning of May, online shopping remains the potential saviour for retailers, with many analysts predicting consumer behaviour may have changed permanently. And as we face into a second wave of the pandemic, online sales may prove even more important.

But it won’t be a solution that works for all retailers. The impact and success of individual companies will depend on the types of products they offer online and how much they had invested in the brand’s digital presence before the pandemic.

New consumer spending patterns reveal how important the stimulus measures, being primarily JobKeeper and JobSeeker, have been and still are. On July 21, the government announced proposed changes to JobKeeper, including an extension through to 28 March 2021. These changes do not impact JobKeeper payments until after 28 September 2020.

With 56% of households believing their financial situation to be vulnerable or worse because of the pandemic, they are likely to struggle to meet all their financial commitments unless they either reduce spending, draw down on savings or access credit.

Australian consumers have some important decisions to make about both their short-term spending habits and their long-term wealth accumulation and retirement savings.

The temptation to focus purely on immediate needs will be strong but seeking good advice about how to prepare and invest for the future is equally as important.

Source: BT

14/08/2020

Am I eligible for the HomeBuilder grant?

Available for a limited time, the HomeBuilder grant offers eligible owner-occupiers, including first-home buyers, a potential tax-free $25,000 boost to help fund the cost of building a new home or substantially renovating an existing home.

Although not specifically targeted at first-home buyers, the Government expects the HomeBuilder grant will be popular with first-home buyers looking to buy a house and land package, as well as growing families upgrading to a bigger new home.

It could also spark interest for retirees who might see this as a trigger to downsize their home, using the grant to help purchase a new smaller apartment or unit, and potentially the money saved to invest into their retirement fund.

As with any Government grant program, there are rules around who is eligible and the type of renovations or properties you can use the money for.

Deciding if you’re eligible

The first and most simple criteria for the Homebuilder grant is that you must be an owner-occupier. If you tick that box, and you’re someone looking to build or renovate your home, you must also meet the following criteria.

• Be an Australian citizen aged 18 or over.
• Have an annual income less than $125,000 for individuals or less than $200,000 for couples (based on your 2018/19 (or later) tax return).
• Planning an appropriate renovation or new build

The Government has defined strict price caps for renovations and new builds to ensure the HomeBuilder scheme sits in-line with other programs already operating in Australia.

• Substantial renovations – the planned cost of a renovation must be between $150,000 and $750,000, and the value of the property being renovated should be less than $1.5 million when work begins.
• New builds – the purchase value of new homes (house and land combined) must not exceed $750,000. This also applies to new homes bought off-the-plan.
•

In addition, all building contracts must be entered into at arm’s length. This means the builder you choose cannot be a relative for example, and you cannot be an owner-builder.

Types of property eligible for the HomeBuilder grant

Good news – this is the most flexible part of the HomeBuilder scheme. Whether you own a house or apartment, or you’re buying a new house and land package or a property off-the-plan, all are eligible types of dwelling.

However, you must live in (or plan to live in) the property, ie you’re an owner-occupier. The HomeBuilder grant is not available to investors looking to renovate or those wanting to build a new home to use as an investment property.

Defining ‘substantial renovations’

In simple terms, the renovations you undertake must improve the liveability, accessibility or safety of your home. And the changes or additions must be connected to the main property.
While there isn’t an exhaustive list of do’s and don’ts, here are a few things that aren’t considered improvements.

• Tennis courts
• Swimming pool
• Spas and saunas
• Sheds or garages not connected to the property

Given that the scale of required renovations far exceeds just painting walls and replacing carpets, the work must be carried out by a licensed or registered builder. Also, the terms of any contract should be commercially reasonable and the contract price should reflect fair market value and not be inflated to ensure it fits within the imposed price boundaries.

The HomeBuilder grant is only available for a limited time, so if you’re thinking of applying there’s no time to lose.

Source: BT