At its latest meeting, the Reserve Bank Board announced it was leaving the cash rate unchanged at 3.85 per cent.

Please click here to view the Statement by the Monetary Policy Board: Monetary Policy Decision.

The RBA had been widely expected to cut rates again after a decline in inflation and softer GDP growth.

With the cash rate 50 basis points lower than five months ago and wider economic conditions evolving broadly as expected, the RBA judged that it could wait for a little more information to confirm that inflation remains on track to reach 2.5 per cent on a sustainable basis.

Please get in touch if you would like to review your finance options.

With the shortest day now behind us and a new financial year underway, there’s fresh energy in the air and plenty to keep an eye on in the financial landscape.

Wars in Europe and the Middle East, volatile oil prices and shifting US policies are making headlines but failing to dampen the optimism of the markets.

The ASX closed the financial year with a near 10% return – its strongest since the COVID-19 crisis and despite US tariff threats.

Australia is somewhat insulated from the tariffs, but concern lingers that the federal government’s $1.5 trillion invested in the US, faces a tax hike.

The tariffs are a bigger risk for the US economy, with inflationary risks from tariffs possibly prompting rate increases. Nonetheless, Wall Street remains upbeat. The S&P 500 index surged to a four-month high in June on hopes of further rate cuts and smooth trade negotiations.

In Australia, forecasts of further interest rate cuts have fractured since tensions flared in the Middle East, with some expecting a July cut and others now tipping August.

The Aussie dollar has climbed to a seven-month high, while the US dollar tumbled to a three-year low.

Oil prices posted their sharpest weekly declines after a spike during June as the Middle East conflict reached boiling point.

Market movements and review video – July 2025

Less hibernate, more activate

When the temperature drops, it feels like more of an effort, but getting outdoors, even when it’s chilly, can do your brain and body a whole lot of good.

Let’s be honest – when it’s cold outside, the couch starts to look very attractive. You’ve got the heater cranking, you’re engrossed in the latest TV series with your favourite hoodie on, and venturing out into nature seems like a job for someone far more motivated. But here’s the thing; humans weren’t designed to hibernate through winter. We’re built to get out and about and move – year-round. 

Movement and exposure to natural environments – even just for short bursts – have so many health benefits. It can improve your body’s immunity, boost your mood, help you sleep better, and keep your body ticking over during the colder months.

Nature isn’t just nice – it’s medicine

It’s not just about ‘getting some fresh air’. Spending more time in nature has real, measurable effects on both the body and the brain.

A large-scale study found that spending as little as two hours a week in nature is associated with better physical health and significantly improved well-being.ⁱ That does not have to be two hours in one go – you can chip away at it over the week, whether it’s a morning stroll in a local park, a quick paddleboard, or a bit of time on the green practicing your putting.

Other studies have shown that being outdoors reduces cortisol levels (your main stress hormone), lowers blood pressure, and even enhances the overall function of your immune system. Yep – getting outside may help your body fend off seasonal bugs and colds. Exposure to natural light during the day also helps regulate your sleep cycle by supporting healthy melatonin production, so you’re more likely to sleep well and feel rested and refreshed.ⁱⁱ

A brain boost

It’s not just your body that benefits. Time spent outdoors has been shown to improve your mood, reduce stress and anxiety levels, and boost focus and memory.

It can also enhance the release of endorphins and dopamine, which are neurotransmitters that are associated with positive emotions, happiness, and well-being.ⁱⁱⁱ

The Japanese have long understood the benefits that nature has on our mood and have a practice known as ‘shinrin-yoku’ which translates as forest bathing. This simple but powerful act of spending time in a forest became popular in the 1980’s as a response to the high stress environment of corporate Japan. So, why not try a little shinrin-yoku yourself? After all, the bush is lovely when it’s cool and crisp and the smell of a forest after rain is also something special and can create a sense of connection to nature.

You don’t have to retreat all the way to the bush for some peace and tranquillity if you are an urban dweller though. Even a quick escape into the backyard for some vitamin D can offer mental breathing room and a chance to slow down and unplug.

Move it or lose it (and not just the summer fitness)

Of course, there are real benefits to combining nature and exercise, especially during winter, which is often when our healthy routines can sometimes fall apart. The activity levels drop, the comfort food kicks in, and suddenly getting out the door requires Olympic-level motivation.

Movement – especially in natural settings – helps counteract the physical slump.

You don’t have to run a marathon. A walk along the beach, a bit of trail hiking, or hitting a few balls on the golf course is more than enough to get the heart pumping and muscles moving. Even spending 20-30 minutes outdoors can lift energy levels and help prevent the aches and stiffness that creep in during the colder months. 

Worth the effort

Sure, it takes a bit more effort in winter, but nature doesn’t close for the season – and the rewards are still there if you’re willing to rug up and step out. So, whether it’s a bike ride, taking the dog for a walk or just having a potter around the garden, get out there.

 And hey, the couch will still be there when you get back. Probably with a hot cuppa waiting.

i https://www.nature.com/articles/s41598-019-44097-3

ii https://askthescientists.com/outdoors/

iii https://www.apa.org/monitor/2020/04/nurtured-nature

How to shift into pension mode

When and how you can access your super to start an account-based pension.

If our working years can be regarded as the time when we aim to build up our superannuation savings, our retirement years can equally be regarded as the time when we aim to spend them.

At least that’s the objective for most Australians. Which generally leads to the question: how do I start accessing my super funds when I do stop working, or maybe even before I stop working?

This article focuses on the basics, including the general eligibility rules around accessing your super and how to switch your super accumulation account to an account-based pension.

What age can I access my super?

To legally access your super, you generally need to have met a condition of release after turning 60-years-old.

You can do so by either stopping work completely (retiring) or by keeping working and starting a transition to retirement income stream (TRIS).

Doing so can enable you to reduce your current working hours and use your TRIS pension payments to top up your part-time income.

In either case, you have the options of turning on a pension income stream, making a lump sum cash withdrawal, or doing a combination of both. 

How do I start a pension account?

Importantly, to start accessing your super, you will need to roll some or all of it over from your accumulation account into a newly created pension account.

Those starting a TRIS continue to receive compulsory super guarantee payments from their employer (which are taxed at the normal rate of 15%) into their super accumulation account. The funds held in a pension account can be accessed, however keeping in mind that investment earnings in the pre-retirement phase are also still taxed at 15%.

Most super funds offer pension account products and different investment options, similar to their accumulation account products. Those with a self-managed super fund should contact their SMSF accountant and/or speak to us to facilitate the super rollover and pension account conversion processes.

You may need to contact your super fund to find out their process, which is typically as simple as lodging a request with your fund by filling out a form and providing information such as how much of you super you want to roll over, and where to.

Once your funds are in a pension account you could then take some out as a lump sum. The Australian Tax Office (ATO) has mandated minimum annual withdrawal amounts, which depend on your age.

There is a limit on the maximum amount that can be transferred as a tax-free retirement income stream from super to a pension account, known as the transfer balance cap. This is currently set at $2 million. The ATO keeps track of how much you transfer, and if you go over the cap it will levy an excess transfer balance tax.

If you have more than $2 million in super you have the option of keeping the excess in your super account and paying up to 15% tax on your earnings, or you can withdraw the excess super as a lump sum.

What are the tax considerations in pension mode?

If you’re aged 60 or over and fully retired, any income earned on your pension assets is tax free and so are the pension payments you withdraw.

Also, a major advantage is that the profits from any investments sold within a pension account are completely capital gains tax free.

What are the minimum pension withdrawal amounts?

Once you’ve rolled over some or all of your super to an account-based pension you are required by law to withdraw a minimum pension amount each financial year, which is a percentage of your account balance based on your age.

For new pensions, the minimum withdrawal amount is calculated on a pro-rata basis from when a pension commences to the end of the financial year.

There are restrictions on how much can be withdrawn tax free through a TRIS in a financial year if you’re under 65, until you’ve met a condition of release. The minimum withdrawal amounts is 4% of your super balance and the maximum is 10%.

The table below shows the required minimum withdrawal rates if you’re in pension phase and are fully retired.

Age on 1 July of pension commencement and on each 1 July thereafter	Minimum withdrawal amount based on pension balance for 2024/2025
Under 65	4%
65 to 74	5%
75 to 79	6%
80 to 84	7%
85 to 89	9%
90 to 94	11%
95 and over	14%

Source: Australian Tax Office

Any amounts leftover in your pension account when you die will go to your nominated beneficiaries. Depending on the type of beneficiary (reversionary, spouse, dependant or non-dependant) the amounts can be paid as an ongoing pension stream until the account runs out or as a lump sum.

Consider getting professional advice

If you’re wanting total financial flexibility in retirement, you could consider leaving part of your money in super, rolling over some of it into an account-based pension, and also withdrawing lump sums whenever you need to.

There are a range of benefits from adopting a combination of your options, although there may also be potential tax consequences for both you and your beneficiaries.

Managing the combination of a super accumulation account, an account-based pension, an Age Pension entitlement (if eligible), potential investment earnings outside of super, and irregular lump sum payments, can be highly complex.

Using our services is a worthwhile consideration as you weigh up all of your retirement options.

This article has been reprinted with the permission of Vanguard Investments Australia Ltd. Copyright Smart Investing™

GENERAL ADVICE WARNING
Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) (VIA) is the product issuer and operator of Vanguard Personal Investor. Vanguard Super Pty Ltd (ABN 73 643 614 386 / AFS Licence 526270) (the Trustee) is the trustee and product issuer of Vanguard Super (ABN 27 923 449 966). The Trustee has contracted with VIA to provide some services for Vanguard Super. Any general advice is provided by VIA. The Trustee and VIA are both wholly owned subsidiaries of The Vanguard Group, Inc (collectively, “Vanguard”). We have not taken your or your clients’ objectives, financial situation or needs into account when preparing our website content so it may not be applicable to the particular situation you are considering. You should consider your objectives, financial situation or needs, and the disclosure documents for the product before making any investment decision. Before you make any financial decision regarding the product, you should seek professional advice from a suitably qualified adviser.You should refer to the TMD of the product before making any investment decisions. You can access our Investor Directed Portfolio Service (IDPS) Guide, Product Disclosure Statements (PDS), Prospectus and TMD at vanguard.com.au and Vanguard Super SaveSmart and TMD at vanguard.com.au/super or by calling 1300 655 101. Past performance information is given for illustrative purposes only and should not be relied upon as, and is not, an indication of future performance. Important Legal Notice – Offer not to persons outside Australia The PDS, IDPS Guide or Prospectus does not constitute an offer or invitation in any jurisdiction other than in Australia. Applications from outside Australia will not be accepted. For the avoidance of doubt, these products are not intended to be sold to US Persons as defined under Regulation S of the US federal securities laws. © 2025 Vanguard Investments Australia Ltd. All rights reserved.

How to bucket your money and save

What is bucketing your money?

Bucketing is a smart way to manage your money without complicated budgets or spreadsheets. You set up multiple bank accounts called ‘buckets’ and use each one for a specific purpose, like bills, savings or entertainment. Once your buckets are set up, it’s easier to see and control how you spend and save your money. This strategy is beneficial for anyone looking to save, reduce debt, control spending or achieve bigger financial goals. Bucketing can also help you save your money for larger but infrequent bills like car registration, school fees and energy bills.

Get started with bucketing your money

It’s easy to start bucketing and saving when you know the exact steps involved in the process.

Step 1. Work out your spending and group into categories

A good starting point is working out how you spend your money. An online expense tracker like the Spending tool, for instance, is excellent to help you see where your income goes. Next, group each category of your spending into a few themes. This could look like regular and daily expenses, emergency funds, splurge and savings. Then add up the amounts in each theme. These themes become your buckets. You can have as many buckets as you like, but here’s an example of how to group them:

Bucket 1 – Regular and daily expenses

This is for regular bills, rent, mortgage, debts, groceries, transport, school fees, insurances and holidays. This account should be linked to a debit card. 

Bucket 2 – Spending or splurge money

Use this bucket for fun money to splurge on things like socialising or treating yourself and others. This account should be linked to a debit card. You can use card controls to take control of your spending.

Bucket 3 – Emergencies and safety money

This one is for the big or unexpected expenses that can catch you off guard, like home or car repairs, dental work or paying off debts. This account should earn interest and have no debit card, so you’re not tempted to spend.

Bucket 4 – Savings

Use the savings bucket to put aside money for things like travel, a new car or reducing debt. Ideally this should be an account that earns interest and has no debit card.

Step 2. Open your bucket bank accounts

To implement this financial strategy, you’ll need to get started with a basic transaction account with your bank. After you’ve opened one account, it’s easy to open or add extra savings or transaction accounts. 

Learn how to open a bank account online.

Handy hints for setting up your buckets

Rename your accounts

When you open your accounts, you can name each account to match its purpose. For example, you could name them ‘Spending bucket’, ‘Fun bucket’, ‘Safety bucket’ and ‘Savings bucket’.

Step 3. Decide on your bucket amounts

This is a very important part of bucketing. The idea is money from your income ‘pours’ into each bucket in certain amounts that you decide. Ideally, all your income or wages should go into the first account, and from there you transfer money into each of your buckets.

As a guide, consider these percentages of your income for each account or bucket:

• Account 1 – Regular and daily expenses: 60%
• Account 2 – Spending money: 10%
• Account 3 – Emergencies and safety money: 10%
• Account 4 – Savings: 20%

Step 4. Set up regular deposits to your buckets

Now that you’ve worked out how much money goes into each of your accounts, you can automate transfers from your first account into the others. It’s a good idea to set up the transfers so they occur on the same day every month, soon after you get paid. This will help you avoid overspending on pay day.

Now you’re ready to start enjoying the benefits of bucketing.

Source: NAB
Reproduced with permission of National Australia Bank (‘NAB’). This article was originally published at https://www.nab.com.au/personal/life-moments/manage-money/budget-saving/money-bucket
National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686. The information contained in this article is intended to be of a general nature only. Any advice contained in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice on this website, NAB recommends that you consider whether it is appropriate for your circumstances.
© 2025 National Australia Bank Limited (“NAB”). 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.

Portfolios for the risk we may not be imagining

Investors have faced a wild ride in 2025. The excitement may not be over.

Equity and fixed income markets took less than a month to recover after U.S. tariff announcements in early April sent them reeling, giving investors a valuable opportunity to reexamine their relationship with risk.

A healthy relationship with risk starts with understanding that downturns aren’t always as shallow and recoveries not always as swift as we’ve seen over the last 15 years or so. Three essential principles for dealing with risk can improve outcomes even if the ride gets wilder.

Principle 1: Be humble in the face of unknowable risk

The late financial historian Peter Bernstein once observed that certain risks are inherently unknowable ahead of time. These risks tend to be the most disruptive, having the potential to befall investors without warning. For example, a key factor in the 2008 global financial crisis that became clear only with the benefit of hindsight was the amount of systemic risk that had built up via credit derivatives. The degree to which risk-taking on credit—mortgage and corporate—was concentrated within the system was not well understood until the crisis deepened. This uncertainty drove the panic that set in at the height of the crisis.

“Equity market drawdowns can run longer and deeper than we’ve become accustomed to. It’s that potentially changing landscape that investors may want to prepare for.” —Kevin Khang, Vanguard Senior International Economist

In a similar vein, what alarmed the market about the recent tariff announcements was not that new tariff policies were being pursued. Rather, it was the magnitude and scope of these policies, and the pace at which they unfolded, that had been largely unknowable and exacerbated the volatility.

Truly disruptive risk is often unknowable ahead of time. Humility regarding this truth can help investors maintain a healthy perception of risk. Accepting that unknowable risks periodically roil markets can foster a flexible and measured response when tail risks—or extreme market developments—emerge, mitigating the impact of unforeseen events and preventing panic-driven decisions.

Principle 2: Have a robust asset allocation

Because the future is uncertain, and some risks are unknowable, it makes sense to find a robust solution—one that provides results that are good enough across a range of circumstances, rather than optimal under some scenarios but highly undesirable under others. More than being balanced by some combination of stocks, bonds, and cash and diversified within each asset class, a robust portfolio is one the investor can maintain, especially in extreme market conditions.1

Rigorous capital market return projections that consider the extremes are also critical to robustness. That’s because poor long-term results are a greater risk than short-term volatility for long-term investors. In practice, a robust approach to portfolio construction considers a diverse range of return environments over the investor’s investment horizon and achieves an allocation that would be suitable across these environments.

A new book by Joe Davis, Vanguard global chief economist, provides an example of such an approach for investors with seven- to 10-year horizons. Placing the odds of the economic environment fundamentally changing over the next decade at above 80%, this approach weighs two starkly different return environments. The resulting portfolio is robust for both: 1) an optimistic environment in which AI-driven productivity drives high economic growth and market valuations; and 2) a pessimistic environment where increasing structural deficits put upward pressure on inflation and yields, while pulling down equity valuations.  

Principle 3: Be optimistic but prepared for downturns

Balanced investors must thoughtfully manage downside risk. Sticking with an allocation during significant drawdowns requires realistic expectations about one’s tolerance for pain. In today’s market, this means having realistic expectations about potential drawdowns and not relying on overly optimistic return expectations based on recent performance.

Mild stock-price corrections of recent years could give way to deeper, longer-lasting declines

As the figure shows, the last 15 years have been favourable for U.S. equities, with shallow and short-lived drawdowns. Some investors may be tempted to look back over this period—which they consider to be “long”—and surmise that such relative market tranquility is here to stay. The quick snapback from the sharp declines after the broad U.S. tariff announcements on April 2 may only reinforce such a stance. But as we can see from previous decades, equity market drawdowns can run longer and deeper than we’ve become accustomed to recently. Looking forward, it’s that potentially changing landscape that investors may want to prepare for.

Feeling our way toward sources of future risk – and potentially recalibrating expectations

The confluence of forces that led to subdued downsides in the last 15 years may be evolving, creating a more challenging risk backdrop: 

• A renewed focus on fiscal responsibility may imply a reduced scope for fiscal stimulus in future economic downturns. 
• Adverse supply-side developments and the potential for stagflation might limit efforts by central banks to mitigate market volatility.
• The prospect of a rearranged global trading ecosystem has a wide range of significant long-term implications that could create sources of disruption—many of which are unknowable. 

For some investors, prudent risk management might mean recalibrating expectations to include deeper and longer-lasting drawdowns that are more in line with previous historical periods. Even if this recalibration doesn’t change one’s asset allocation dramatically, it may increase the odds of the investor maintaining their allocation during downturns.

If you have any questions regarding market fluctuations, contact us today.

Notes: 

All investing is subject to risk, including the possible loss of the money you invest. Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income. Diversification does not ensure a profit or protect against a loss. 

Investments in bonds are subject to interest rate, credit, and inflation risk.

Bond funds are subject to the risk that an issuer will fail to make payments on time, and that bond prices will decline because of rising interest rates or negative perceptions of an issuer’s ability to make payments.

Investments in stocks and bonds issued by non-U.S. companies are subject to risks including country/regional risk and currency risk. These risks are especially high in emerging markets.

This article contains certain ‘forward looking’ statements. Forward looking statements, opinions and estimates provided in this article are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Forward-looking statements including projections, indications or guidance on future earnings or financial position and estimates are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. There can be no assurance that actual outcomes will not differ materially from these statements. To the full extent permitted by law, Vanguard Investments Australia Ltd (ABN 72 072 881 086 AFSL 227263) and its directors, officers, employees, advisers, agents and intermediaries disclaim any obligation or undertaking to release any updates or revisions to the information to reflect any change in expectations or assumptions.

1 Some investors may wonder what’s wrong with adjusting their allocations on the fly, based on changed perceptions of risk. In some cases, the answer may be “nothing.” But such cases are likely limited to instances where market volatility has convinced the investor or their advisor that they previously over- or underestimated their risk tolerance—and that a new target mix of assets would be better for the long haul. Otherwise, Vanguard research suggests that an annual rebalancing strategy is optimal for investors who do not harvest losses for tax purposes or seek to track a benchmark. For more information, see Yu Zhang et al., Rational Rebalancing: An Analytical Approach to Multiasset Portfolio Rebalancing Decisions and Insights, Vanguard, 2022; available at corporate.vanguard.com/content/dam/corp/research/pdf/rational_rebalancing_analytical_approach_to_multiasset_portfolio_rebalancing.pdf.

This article has been reprinted with the permission of Vanguard Investments Australia Ltd. Copyright Smart Investing™

GENERAL ADVICE WARNING
Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) (VIA) is the product issuer and operator of Vanguard Personal Investor. Vanguard Super Pty Ltd (ABN 73 643 614 386 / AFS Licence 526270) (the Trustee) is the trustee and product issuer of Vanguard Super (ABN 27 923 449 966).
The Trustee has contracted with VIA to provide some services for Vanguard Super. Any general advice is provided by VIA. The Trustee and VIA are both wholly owned subsidiaries of The Vanguard Group, Inc (collectively, “Vanguard”).
We have not taken your or your clients’ objectives, financial situation or needs into account when preparing our website content so it may not be applicable to the particular situation you are considering. You should consider your objectives, financial situation or needs, and the disclosure documents for the product before making any investment decision. Before you make any financial decision regarding the product, you should seek professional advice from a suitably qualified adviser. A copy of the Target Market Determinations (TMD) for Vanguard’s financial products can be obtained on our website free of charge, which includes a description of who the financial product is appropriate for. You should refer to the TMD of the product before making any investment decisions. You can access our Investor Directed Portfolio Service (IDPS) Guide, Product Disclosure Statements (PDS), Prospectus and TMD at vanguard.com.au and Vanguard Super SaveSmart and TMD at vanguard.com.au/super or by calling 1300 655 101. Past performance information is given for illustrative purposes only and should not be relied upon as, and is not, an indication of future performance. This website was prepared in good faith and we accept no liability for any errors or omissions.
Important Legal Notice – Offer not to persons outside Australia
The PDS, IDPS Guide or Prospectus does not constitute an offer or invitation in any jurisdiction other than in Australia. Applications from outside Australia will not be accepted. For the avoidance of doubt, these products are not intended to be sold to US Persons as defined under Regulation S of the US federal securities laws.
© 2025 Vanguard Investments Australia Ltd. All rights reserved.

With the new financial year comes a fresh wave of superannuation changes that could make a real difference to your retirement savings.

Let’s unpack what’s changing – and how to make the most of it.

The SG rate hits 12%

One obvious lift to retirement incomes is the increase in the Super Guarantee (SG) rate from 11.5 per cent to 12 per cent. That means more going into your super account.

Your employer must now pay 12 per cent of your ordinary time earnings into your chosen super account. So, it’s a good idea to check your first payslips for the new financial year to make sure the changed rate is applied.

If you have a salary sacrifice arrangement, note that the SG calculation applies to your total salary, as if the arrangement was not in place.

For a quick update on what the change will look like for your super balance, check the MoneySmart calculator.

More for retirement phase

Beyond your regular contributions, the amount of super that can be transferred into the retirement phase – known as the general transfer balance cap (TBC) – has increased from $1.9 million to $2 million from 1 July 2025.ⁱ

If you exceed the cap, you’ll need to transfer the excess back to your accumulation account or withdraw it as a lump sum – plus, you may pay tax on the earnings.

If you’ve already started a retirement income stream, you’ll have a personal TBC – your own individual limit, which may be less than the general TBC. Your personal cap is based on the general cap at that time you started, adjusted for how much you’ve used and any indexation you’re entitled to.ⁱⁱ

For example, if you started a pension with $2 million on 1 July 2025, you’ve used your entire cap. The cap doesn’t limit the amount you can hold in super. If you have more than the cap available, the remainder can be left in your super fund’s accumulation account.

By the way, it doesn’t matter if, after a year of positive investment returns, your pension account has grown to say, $2.1 million. The transfer balance cap only applies to the amount you start the pension with.

You can check your cap in ATO online services, which records all the debits and credits that make up your balance.

Special rules apply for defined benefit income streams.

More qualify for after-tax contributions

The change in the general TBC to $2 million may also allow you to increase non-concessional (after-tax) contributions using the bring-forward rule. While the $120,000 annual limit on non-concessional contributions hasn’t changed, eligibility for using the bring-forward rule now applies to those with a total superannuation balance below the general TBC of up to $2 million.

The rule allows you to bring forward the equivalent of one or two years of your annual non-concessional contributions cap ($120,000), allowing you to make contributions two or three times more than the annual cap.

Your total super balance includes all your super interests – accumulation, retirement phase, and any rollovers. It may differ from your super fund’s account balance.

It’s useful to be aware of your total super balance because it determines your eligibility for a range of super rules. ATO online services will show your total super balance.

No change to contribution caps

While more investors may now be eligible to access the bring-forward rule, the caps on both concessional (before tax) and non-concessional contributions haven’t changed.

The tax paid on contributions depends on whether you’re paying from before-tax or after-tax incomes, you exceed the contribution caps, or you’re a high income earner.ⁱⁱⁱ

The concessional contributions cap is $30,000 and if you have unused cap amounts from previous years, you may be able to carry them forward to increase your contribution in later years. You can make up to $120,000 in non-concessional contributions each financial year and you may be eligible for the bring-forward rule allowing up to $360,000 in one contribution.

Not sure how the rules affect you? Talk to us today about how to stay ahead and make the most of your retirement savings plan.

Awaiting the new $3m tax

The proposed new tax on earnings above $3 million in super accounts, known as the Division 296 tax, has not yet been ratified by Parliament. Nonetheless, it is expected to be applied from 1 July 2025.

The new tax doubles the tax rate from 15 per cent to 30 per cent for earnings on balances that exceed $3 million.

It is expected to affect less than 0.5 per cent of investors or around 80,000 people.^iv

The taxable earnings are calculated by deducting your total super balance amount at the start of the year from the balance at the end of the year, adding some outgoings such as pension payments, and subtracting some items that increased the balance, such as super contributions.^v

An earnings loss in a financial year, can be carried forward to reduce the tax liability in future years.

ASFA, the Association of Superannuation Funds Australia, has provided a number of worked examples here that show the effect of the tax in different circumstances.

If you believe the new tax will affect you, please get in touch for more information.

i Transfer balance cap | ATO

ii Calculating your personal transfer balance cap | ATO

iii Concessional and non-concessional contributions | ATO

iv Better targeted superannuation concessions – factsheet (PDF)

v ASFA Fact Sheet: Understanding Div 296

The end of the financial year is an opportunity to optimise your financial strategy, take advantage of tax deductions, and set yourself up for the new financial year.

Whether you’re looking to maximise tax benefits, rebalance your investment portfolio, or to simply ensure you’re ticking all the right boxes, smart end of financial year (EOFY) planning can make a big difference.

So, to finish the financial year on a high note, start by mapping out your finances and investment portfolio and collect all the relevant documents. It can be a tedious task if your filing isn’t up to scratch, so it can be useful to set up a system as you go to make it easier for the next financial year.

You will need your bank statements, superannuation fund statement, self- managed super fund (SMSF) paperwork if relevant, a record of any capital gains or losses from the sale of assets such as shares or property, details of share dividends including any dividends earned through a Distribution Reinvestment Plan, and records of any other investments or income received.

Looking for deductions

On the other side of the ledger, there are limits on deductions for most categories of expenses but it’s a useful exercise to gather the evidence of all costs associated with employment and income-producing investments – whether or not they’re tax deductible.

For the most part at least, some deductions are allowed for certain work-related costs, donations over $2 to approved not-for-profits, the costs of managing your tax affairs, eligible investment property expenses, income protection insurance premiums (if the premiums are paid outside of your super fund), and expenses linked to a financial investment – such as attending a seminar directly related to the investment or the cost of account keeping fees on bank accounts used only for investment.ⁱ

ATO Assistant Commissioner Rob Thomson says the ATO is keeping a close eye on work-related expenses and working from home deductions this year.ⁱⁱ

“Work-related expenses must have a close connection to your income earning activities, and you should be prepared to back it up with records like a receipt or invoice,” says Thomson.

“If your deductions don’t pass the ‘pub test’, it’s highly unlikely your claim would meet the ATO’s strict criteria,” he says.

Get ahead with early payments

One way of maximising deductions in this financial year is by paying early deductible expenses due next year such as insurance premiums, subscriptions, or business rent if applicable. But remember to check first to see which expenses may be eligible to prepay.

Small businesses also have access to an instant asset write-off for the business portion of assets under $20,000, that were purchased and used in this financial year. The instant asset write-off is available to businesses with an annual turnover of less than $10 million.ⁱⁱⁱ

Review your portfolio

At this stage of the year, it’s a good time to take stock of your investments including shares, superannuation and property. You may want to check that your investment strategy is still appropriate for your needs and expectations and review any underperforming assets.

The review will help you to decide whether you have an opportunity to top-up your super fund or SMSF. If you have funds to spare, making the most of the total contribution amount allowed both in this financial year and for the last five years, could give your retirement planning a serious boost.

Don’t forget last year’s increases to the cap on super contributions, which may allow you to contribute more. The limit on concessional contributions (employer contributions and personal contributions that can be claimed as a tax deduction) increased to $30,000. The cap on non-concessional (or after-tax) contributions is now $120,000. You may also be eligible to carry forward unused amounts from up to five years before. Reach out to us if you are considering making any super contributions to ensure you don’t exceed the cap and your funds are deposited before the June cut-off date.

It’s also a chance to review super indexation changes due from 1 July to see if there’s a need to take action before 30 June or to wait. For example, the amount that can be transferred into the retirement phase (known as the general transfer balance cap) will increase to $2 million on 1 July, up from $1.9 million this financial year. That might affect the decision to begin a pension this month as opposed to next.

There’s a lot to consider right now to make sure you’re optimising tax savings and that your planning today leads to a financial reward tomorrow. Give us a call if we can help.

How to make use of a capital loss

Savannah bought $2,000 worth of shares (50 shares at $40 per share) in a large mining company.

After 18 months she sold the shares. They had fallen in price to $20 per share. She made a capital loss of $1,000.

Savannah also made a profit of $1,500 from selling other shares she held. She had held these shares for five years.

Savannah can deduct the $1,000 she made a loss on from the $1,500 capital gain. This leaves her with a profit of $500. As Savannah held the shares for more than 12 months, she only includes half the capital gain in her tax return. She’ll pay tax on this $250 at her marginal tax rate.

Source: Investing and tax – Moneysmart.gov.au

i Deductions you can claim | Australian Taxation Office

ii ATO unveils ‘wild’ tax deduction attempts and priorities for 2025 | Australian Taxation Office

iii Instant asset write-off for eligible businesses | Australian Taxation Office

With Winter now upon us, it’s time to embrace the joys of the cooler months of the year.

Now that the federal election is out of the way, and another financial year is drawing to a close, it’s a perfect time to look back at all you’ve achieved over the past 12 months and focus on a fresh start for the financial year to come.

While market volatility continued, markets largely recovered from April’s losses in May. However, the legal and economic uncertainty of US tariffs remain a key concern for global and local markets.

The end of the month saw the S&P/ASX 200 react positively at first to the news that a US federal judge had blocked the tariffs. When an appeals court temporarily stayed the tariffs hours later, a mini sell-off followed. The index has jumpstarted its way to a three-month high, not quite back to its best in February.

There was a sigh of relief all round when the Reserve Bank lowered interest rates in May by 25 basis points to 3.85%. The RBA’s move came with a caveat that, while domestic demand “appears” to be recovering and real household incomes have picked up, the outlook is unclear because of both local and international developments.

Inflation was slightly higher than expected for the 12 months to April, but it remained within the RBA’s target range and many economists are predicting another rate cut in July.

Smart moves before the financial year ends

The end of the financial year is an opportunity to optimise your financial strategy, take advantage of tax deductions, and set yourself up for the new financial year.

Whether you’re looking to maximise tax benefits, rebalance your investment portfolio, or to simply ensure you’re ticking all the right boxes, smart end of financial year (EOFY) planning can make a big difference.

So, to finish the financial year on a high note, start by mapping out your finances and investment portfolio and collect all the relevant documents. It can be a tedious task if your filing isn’t up to scratch, so it can be useful to set up a system as you go to make it easier for the next financial year.

You will need your bank statements, superannuation fund statement, self- managed super fund (SMSF) paperwork if relevant, a record of any capital gains or losses from the sale of assets such as shares or property, details of share dividends including any dividends earned through a Distribution Reinvestment Plan, and records of any other investments or income received.

Looking for deductions

On the other side of the ledger, there are limits on deductions for most categories of expenses but it’s a useful exercise to gather the evidence of all costs associated with employment and income-producing investments – whether or not they’re tax deductible.

For the most part at least, some deductions are allowed for certain work-related costs, donations over $2 to approved not-for-profits, the costs of managing your tax affairs, eligible investment property expenses, income protection insurance premiums (if the premiums are paid outside of your super fund), and expenses linked to a financial investment – such as attending a seminar directly related to the investment or the cost of account keeping fees on bank accounts used only for investment.ⁱ

The ATO is keeping a close eye on work-related expenses and working from home deductions this year, saying there must be “a close connection to your income earning activities, and you should be prepared to back it up with records like a receipt or invoice”.ⁱⁱ

Get ahead with early payments

One way of maximising deductions in this financial year is by paying early deductible expenses due next year such as insurance premiums, subscriptions, or business rent if applicable. But remember to check first to see which expenses may be eligible to prepay.

Small businesses also have access to an instant asset write-off for the business portion of assets under $20,000, that were purchased and used in this financial year. The instant asset write-off is available to businesses with an annual turnover of less than $10 million.ⁱⁱⁱ

Review your portfolio

At this stage of the year, it’s a good time to take stock of your investments including shares, superannuation and property. You may want to check that your investment strategy is still appropriate for your needs and expectations and review any underperforming assets.

The review will help you to decide whether you have an opportunity to top-up your super fund or SMSF. If you have funds to spare, making the most of the total contribution amount allowed both in this financial year and for the last five years, could give your retirement planning a serious boost.

It’s also a chance to review super indexation changes due from 1 July to see if there’s a need to take action before 30 June or to wait. For example, the amount that can be transferred into the retirement phase (known as the general transfer balance cap) will increase to $2 million on 1 July, up from $1.9 million this financial year. That might affect the decision to begin a pension this month as opposed to next.

There’s a lot to consider right now to make sure you’re optimising tax savings and that your planning today leads to a financial reward tomorrow. Give us a call if we can help.

i Deductions you can claim | Australian Taxation Office

ii ATO unveils ‘wild’ tax deduction attempts and priorities for 2025 | Australian Taxation Office

iii Instant asset write-off for eligible businesses | Australian Taxation Office

How the $3m super tax may affect you (and what to do next)

As the federal government moves to introduce a new 15 per cent tax on superannuation earnings above $3 million (known as Division 296 tax), concerns and debates have emerged about the broader implications for investment strategies, retirement planning, and even the property market.

It is intended that once passed by Parliament, the new tax – which doubles the tax rate from 15 per cent to 30 per cent for balances that exceed $3 million – will apply from July 1, 2025.

The tax change is expected to directly affect less than 0.5 per cent of investors or around 80,000 people.ⁱ

Treasurer Jim Chalmers describes the increase as “a modest change” that will make “concessional treatment for people with very large superannuation balances still concessional but a little bit less so”.ⁱⁱ

He says it will help fund other priorities such as Medicare, cost-of-living relief and tax cuts.

The Grattan Institute says tax breaks on super contributions cost the federal budget nearly $50 billion in lost revenue each year.ⁱⁱⁱ

The Institute says that, while super is intended to help fund retirement, it has become a “taxpayer-subsided inheritance scheme”. By 2060, Treasury expects one-third of super withdrawals to be as bequests – up from one-fifth today.

How will the rate be calculated?

The formula for the additional tax payment due calculates the difference between the member’s total superannuation balance for the current and previous financial years and adjusts for net contributions (which excludes contributions tax paid by the fund on behalf of the member) and withdrawals.

An earnings loss in a financial year, can be carried forward to reduce the tax liability in future years.

The calculation of earnings includes all unrealised gains and losses.

Implications for investors

The Grattan Institute says taxing capital gains as they increase removes incentives to “lock in” investments. “But it can create cash flow problems for some self-managed super fund (SMSF) members who hold assets such as business premises or a farm in their fund,” the Institute says.^iv

Many commentators speculate there will be a major change to asset allocation in super, particularly in SMSFs, as a result of the move to tax unrealised gains.

Meanwhile, one property analyst predicts a structural shift in property investment with commercial real estate becoming more attractive because of its stronger income yields relative to capital growth.^v

The new tax could also reduce the appeal of super as an inheritance tool with investors likely to explore alternative wealth transfer methods.

Navigating the changes

With the tax changes looming, we’re helping clients to ensure their portfolios will continue to meet their expectations.

For those looking to minimise their exposure to the tax, there are a number of strategies that may be useful.

These include:

1. Diversifying investments outside of superannuation by, for example, making direct investments in equities, bonds or private businesses.
2. Considering alternative retirement savings vehicles such as family trusts.
3. Actively planning to optimise tax efficiency by, for example, structured withdrawals to keep balances below the $3 million threshold, making use of tax exemptions and considering asset reallocation.

The new tax marks a significant shift in Australia’s retirement savings landscape. While the government argues that the measure is modest and targeted, its long-term implications—particularly the taxation of unrealised gains—could reshape investment strategies for high-net-worth investors.

For those nearing retirement with a high super balance, careful financial planning will be essential and all investors who could potentially be affected, should be reassessing their portfolios and weighing up whether alternate wealth management strategies may be an option.

Please get in touch if you would like help to navigate the changes.

i Better targeted superannuation concessions – factsheet (PDF)

ii Interview with Michelle Grattan, Politics podcast, The Conversation | Treasury Ministers

iii, iv Tax reform will make super fairer and the budget stronger – Grattan Institute

v $3 million superannuation tax change sparks property warning as ‘panic’ selling begins

Volunteering in retirement: finding purpose, structure, and joy

Retirement might be just around the corner, or maybe you’ve recently crossed that exciting threshold. You’ve worked hard for decades, and now ready to trade in the alarm clock for leisurely mornings and to-do lists that are actually fun. But as you move into the next phase of your life; a thought might cross your mind: What now?

While the idea of unlimited free time sounds wonderful at first, many people find that after the novelty wears off, there’s something important missing. Work often provides structure, purpose, and a sense of accomplishment. Without that, it’s easy to feel a little… adrift.

So, when you picture what your ideal retirement looks like, it can be a good time to think about what you still have to offer the world and consider volunteering. As well as helping others, you’ll also enrich your life in so many ways.

Enhance your life

A study commissioned by Apia found that more than half (56 per cent) of Australians over 50 years of age, are currently engaged with community or volunteer work.ⁱ And the benefits are not just the recipient of their support – it’s been proven that volunteering can boost your own happiness, your mental health, and even your physical well-being.ⁱⁱ It’s like a secret ingredient for a fulfilling retirement.

Retirement beyond the finances

Planning your retirement is more than just numbers on a spreadsheet; it’s about creating a fulfilling, meaningful lifestyle. Volunteering can help restore that sense of purpose when you are no longer working, and add structure to your days, all while benefiting others. Thinking about volunteering before you leave the workforce can give you a head start in discovering what really lights you up, and it will give you a smooth transition into the next chapter of your life.

Here are a few tips on how to get started, make your time count, and make sure you’re doing something meaningful and truly brings you joy.

Consider your skills

You have years of knowledge, skills and life experiences to draw upon and it can be enormously satisfying to use those to help others. Your contribution can reflect the skills you honed in the workplace or talents you developed along the way. Have you always been the go-to person for organising family events or helping friends with their tech problems? Think about how you can use your skills – whether that’s helping others, improving areas in your community – like gardening, or even just making someone smile.

Choose a cause that sparks your passion

Think about what has always inspired you. Volunteering is most fulfilling when it aligns with your interests and values. So, take a moment to consider what causes excite you and look for organisations that align with your passions – maybe a local food bank, animal rescue, or environmental group. Your volunteering experience should feel like a rewarding activity, not an obligation.

Start exploring early

Ideally, don’t wait until your last day of work to decide how you’ll spend your free time. Start researching volunteering opportunities in your community or online. Many organisations offer flexible, part-time opportunities, so you don’t have to dive in full force right away. There are so many options out there that can fit into your schedule.

Volunteering, however, you approach it, can open up a whole new world. Once you look for opportunities to assist others, you also enhance your own well-being in a myriad of ways. Working with other like-minded people can give you an incredible sense of community and connection, developing fantastic friendships along the way. Not to mention the sense of satisfaction you’ll feel as you learn new things and are exposed to new ideas

Consider how you can weave volunteering into your new life. It can be a way to make your retirement truly extraordinary, while also making the world a better place.

Volunteering ideas to consider

• Mentoring: Share your knowledge by helping someone in need of guidance – whether that’s through career coaching, tutoring, or life skills.
• Local charities: Get involved in your community by assisting with food banks, shelters, or organising fundraisers for causes you care about.
• Animal shelters: If you’re an animal lover, consider helping out at your local shelter, either by walking dogs or assisting with adoptions.
• Environmental causes: Join efforts to clean up parks, plant trees, or raise awareness about environmental issues.

i https://www.apia.com.au/apia-good-life/community-relationships/value-of-volunteering.html

ii https://pmc.ncbi.nlm.nih.gov/articles/PMC7375895/

At its latest meeting, the Reserve Bank Board announced it was reducing the cash rate to 3.85 per cent, down from 4.10 per cent.

Please click here to view the Statement by Michele Bullock, Governor: Monetary Policy Decision.

With the official rate change, we’re watching closely what the banks do with their rates, as some of Australia’s biggest lenders may make changes to their rates.

You will be notified directly by your bank if and when they change their interest rate.

Please get in touch if you would like to discuss recent rate movements or if you would like to review your finance options.

While many Australians had the opportunity to enjoy two consecutive long weekends in April, as we move into May the focus is now on the federal election.

The month of April was marked by economic uncertainty and global trade tensions that drove market declines and volatility. These events are anticipated to influence the RBA’s cash rate decisions, as will the recent decline in core inflation to within the target range.

Australian shares slumped in early April but recovered with the ASX 200 up 2.5% by month’s end. Nonetheless, the index is down nearly 1.3% since the start of the year and may fall further according to some commentators. In the United States, the S&P500 regained strength after falling to its lowest level in a year.

Unemployment increased slightly in the latest figures, up by 4.1% and consumer sentiment declined 6% in April, revealing consumer unease about developments in Australia and abroad associated with US tariff announcements.

The International Monetary Fund (IMF) delivered sombre news for Australia, predicting lower growth than forecast earlier this year. Despite the slowdown, the IMF says global growth remains “well above” recession levels.

Market movements and review video – May 2025

Scams: knowledge is protection

Scammers operate in an ever-evolving space and the scams of today are far more sophisticated than they have ever been, targeting even the most financially literate individuals.

In addition to the financial impact from a scam, it can affect your mental health as well as damage your reputation, so understanding how scammers operate is the best way protect yourself from falling victim.

A growing trend

The statistics provide a sobering reminder that no one is immune—no matter how experienced or cautious they may be – it can happen at the click of a button.

According to the Australian Competition and Consumer Commission’s (ACCC) Scamwatch, Australians lost an alarming $3.18 billion to scams last year. 

The average individual loss from scams is significant, with individual losses rising by more than 50 per cent last year, to an average of almost $20,000.ⁱ This is due, in part, to scammers using new technology to lure and deceive victims and it underscores the serious financial toll scams can take.

Some of the most common scams include:

• Investment scams: Investment scams continue to be a major issue, with losses reaching around $1.2 billion in 2024. These scams often involve fraudulent online trading platforms or fake cryptocurrency schemes, designed to lure investors with promises of high returns and minimal risk.
• Impersonation scams: Fraudsters are increasingly using sophisticated tactics to impersonate trusted organisations, such as government bodies, banks, and financial advisers. In 2024, impersonation scams accounted for $700 million in losses, with scammers using fake emails, phone calls, and even text messages to trick victims into revealing sensitive personal information or parting with funds.
• Romance and relationship scams: These scams often involve scammers establishing a personal relationship with victims before manipulating them into sending money. In 2024, these types of scams led to losses of $250 million, highlighting the emotional and financial damage they can cause.

While these figures are shocking, they also reflect the changing nature of scams. Scammers are no longer relying on clumsy, obvious frauds. Instead, they are using highly professional methods, often tailored to the specific interests, financial knowledge, and behaviours of their targets.

Why everyone is vulnerable

As scammers become more creative, even the most experienced and financially literate individuals are at risk. There are several reasons why this is the case.

Sophistication: Scammers now use advanced technology and psychological manipulation to trick their victims. They impersonate respected brands and financial institutions, and they can craft highly convincing emails, websites, and phone calls that look indistinguishable from legitimate communications.

Cryptocurrency and new technologies: The rise of digital currencies and decentralised finance (DeFi) platforms has created new opportunities for scammers to exploit. These markets are largely unregulated, making them more vulnerable to exploitation by criminals.

Deepfakes: Scammers are increasingly using deepfake technology to make their fraudulent schemes more convincing and harder to detect. By creating hyper-realistic videos or audio recordings, they can impersonate trusted individuals, such as company executives, colleagues, or even loved ones, to manipulate victims to respond to requests for urgent assistance or money. This manipulation of digital media makes it much more difficult for victims to distinguish between what’s real and what’s fabricated.

Protecting yourself

Despite the growing sophistication of scammers, there are steps you can take to protect yourself. It’s crucial to stay alert and use a combination of scepticism, knowledge, and due diligence.

Be cautious when receiving unsolicited offers or requests, whether by phone, email, or social media. If you weren’t expecting to hear from a company or individual, don’t rush to react. Don’t click on links. Take a step back and verify the legitimacy of the contact by using an email or contact number that you locate online. Always verify account details this way before transferring any money.

Scammers are constantly evolving their tactics, so it’s crucial to stay informed. Regularly educate yourself on the latest scam trends and familiarize yourself with common warning signs. Agencies like Scamwatch provide ongoing updates and resources for identifying and reporting scams.

The evolving nature of financial scams means that it’s not enough to simply be cautious; you need to stay proactive. If you’re unsure whether an opportunity is a scam or simply want a second opinion on a financial matter, we’re here to help.

Source for all scam statistics in this article: https://www.scamwatch.gov.au/research-and-resources/scam-statistics

i https://www.scamwatch.gov.au/research-and-resources/scam-statistics

5 steps towards a financially fit retirement

If retirement is just around the corner, the current financial climate may make you feel a little uneasy. Watching the markets fluctuate might leave you worrying about whether your superannuation will be enough to see you through.

It’s not a time for hasty moves, though.
If you are concerned a calm review of your current portfolio and investment strategy may be helpful.

After all, the average Australian spends around 20 years in retirement, so it’s important to create a retirement strategy that takes account not only the current market conditions but also the risks and opportunities in the years ahead.

As one of the most significant retirement assets, your superannuation needs a carefully considered assessment as you approach any new life stage.

Here are five useful tips to help ease you into the next chapter towards retirement.

1. Review your risk profile and portfolio allocation

Check your super portfolio’s risk profile. Generally speaking, investors take a high-growth approach when they’re younger to take advantage of higher returns, however, as with normal share market cycles, there will be fluctuations in the share market. Having a long-term strategy gives you the time to recover from any market downturns before retirement.

Older investors may prefer a more conservative investment strategy that can help to stabilise returns by potentially protecting super from share market volatility.

2. Calculate retirement expenses

Be realistic about the living expenses you’ll need when you finish working. For some, it may cost less to live in retirement because of reduced expenses such as commuting costs and maintaining a work wardrobe.

On the other hand, you may plan to travel more or buy a new vehicle or renovate your home, so these expenses need to be factored in when working out how much you’ll need.

According to the Association of Superannuation Funds of Australia (ASFA), the annual average budget to maintain a comfortable lifestyle in retirement is $73,077 for a couple and $51,805 for a single person.ⁱ

And to maintain a modest lifestyle, ASFA estimates a couple will need $47,470 and a single person will need $32,897. Both estimates assume you already own your own home.

You can find easy-to-use tools on the MoneySmart website to help you work out your budget and also estimate your income from super and the Age Pension.

3. Take action on mortgages and loans

Entering retirement with manageable or small levels of debt can contribute to feeling more financial stable.

If you’ll still be repaying a mortgage after you’ve retired, you could consider downsizing your home or using superannuation funds to pay down the debt, keeping in mind the tax implications and ensuring that you comply with superannuation laws. If you’re considering either of these courses of action, we’d be happy to explain your options and obligations.

4. Check your timing

Understanding when and how you can access your super is important.

You can use your super to fund your retirement when you reach “preservation age”, which is from age 60. You can also use your super to begin a transition to retirement income stream (TRIS) while continuing to work.ⁱⁱ

Alternatively, if you continue working beyond preservation age, you can withdraw your super once you turn 65.

There are also some circumstances in which you can access your super early such as illness and financial hardship, however, eligibility requirements do apply.ⁱⁱⁱ

5. Decide how to withdraw your funds

You may be able to withdraw your super in a lump sum, if your fund allows it. This could be the entire amount you have invested, or you could receive regular payments.

If you ask your fund for regular payments (paid at least once a year), it is known as an income stream and your super account transitions from the accumulation phase – where contributions are made – to a pension.

There are minimum withdrawals that you must make once you commence an income stream from super. For example, for those aged under age 65, a minimum annual withdrawal of 4 per cent of your super balance is required and this drawdown rate increases as you get older.^iv

There is a lot to think about as you approach retirement, so if you’d like to discuss your retirement income options, please give us a call.

i ASFA Retirement Standard, December 2024 – The ASFA Retirement Standard – ASFA

ii Super withdrawal options | Australian Taxation Office

iii When you can access your super early | Australian Taxation Office

iv Payments from super, April 2025 – Payments from super | Australian Taxation Office

The aged care Star Ratings are changing – here’s why

Key points:

• Star ratings for residential aged care homes are changing to a redesigned Compliance rating and incorporating care minute targets for Staffing ratings from October 1, 2025
• 271 stakeholders informed the design changes for the aged care Star Ratings system
• You can use the Find a Provider tool on the government website to gauge a provider’s quality of care

The Star Ratings system debuted in December 2022 and it was designed to help families find high-quality aged care providers.

The five-star scale was introduced in response to the Royal Commission into Aged Care Quality and Safety. It was meant to distil complex care metrics — Resident Experience (33 percent), Compliance (30 percent), Staffing (22 percent) and Quality Measures (15 percent) – into a digestible score.

The Australian Government Department of Health and Aged Care unveiled the Design Changes for Star Ratings for Residential Aged Care – Consultation Findings Summary Report.

The new report, informed by 271 stakeholders, such as older people, families, providers and advocates, confronts the widely reported issues with the Star Rating system.

A striking revelation to emerge from the report was the push for providers to be held accountable throughout the system.

Over three-quarters of the cohort demanded a provider’s Compliance rating drop across all its homes if it was issued a formal regulatory notice for significant or systemic non-compliance.

Although 64 percent of providers were supportive of the measure, they cautioned that home-specific factors – like a good manager or unique challenges – often outweigh corporate oversight.

They wanted to draw a line in the sand between small mistakes and major breaches, like neglecting resident safety, to avoid unjust punishment. The report acknowledges this but leaves the concern unaddressed.

Staffing, the lifeblood of aged care, emerges as another flashpoint. The consultation found 75 percent of stakeholders supported a cap of two stars on the Staffing rating for homes failing to meet both care minute targets – hours of direct care mandated per resident.

Among stakeholders, 87 percent expressed support for incorporating the 24/7 registered nursing requirement into the Staffing rating, with many advocating a two-star cap for non-compliance.

Yet, rural providers cried foul: workforce shortages, not negligence, often thwart them. They begged for exemptions, transparently flagged, lest they’re crushed by urban-centric rules.

Beneath these reforms lies a quieter, yet electrifying, thread: data integrity. Stakeholders didn’t just want new rules – they demanded the numbers be trustworthy.

The Staffing rating’s potency, they argued, hinges on accurate, reliable care minute data, especially when self-reported by providers.

Two-thirds insisted Compliance ratings rebound instantly once non-compliance is fixed, not linger in purgatory for 1 – 3 years.

The report’s call for transparent regulatory notices – 75 percent want System Governor notices published, 85 percent demand financial non-compliance hit ratings – doubles down, promising a window into a home’s soul.

The consultation leaves that gauntlet on the table, a test of whether the system can finally earn trust.

Finally, the report hints at a design revolution: half-star ratings and richer data. A narrow 51 percent endorsed half-stars for the Overall Star Rating, envisioning a ladder of incremental progress – 3.5 stars as a reachable rung, not a distant five.

The push for systemic accountability could unmask corporate culprits, staffing reforms might anchor care in reality and data integrity could rebuild faith among stakeholders. However, the report isn’t a one-size-fits-all solution for the sector.

The consultation’s 271 voices have spoken and their hopes and fears are now in the government’s hands. This year has set the stage for mass reforms, intended to make the landscape easier to navigate and safer for those seeking quality care.

Source: Aged Care Guide
Reproduced with permission of DPS Publishing. This article was originally published on https://www.agedcareguide.com.au/talking-aged-care/the-aged-care-star-ratings-are-changing-heres-why.
Important:
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Understanding your retirement income

Work out how long your super or account-based pension will last

There are many variables that come into play when calculating how long your super or account-based pension will last in retirement, and it can be challenging to figure it out alone.

If you’ve transferred your super to a pension account already, then you can use the MoneySmart calculator to help estimate how long your pension will last. And if you haven’t, we recommend you speak to us as we can discuss with you different considerations that will impact how long your account-based pension will last.

Here are some of the fundamental things you need to know about a couple of other retirement income options.

Account-based pensions

Account-based pensions are a popular retirement income product. They fluctuate in value and are linked to the market, so your investment, and therefore your long-term income, isn’t guaranteed.

How long an account-based pension lasts will depend on:

• the amount of initial capital invested
• the return from the underlying investments
• the amount of fees charged
• how much you withdraw as income each year.

The tax benefits of account-based pension are:

• you don’t pay tax on pension payments from age 60
• you don’t pay tax on investment earnings.

In some cases, the underlying investments for most pension accounts are chosen to minimise fluctuations but still provide a bit of growth.

Defensive assets

These include cash and fixed income. In general, they’re lower risk and provide lower returns over the long term.

Growth assets

These include equities and property. They’re usually open to market fluctuation but tend to provide higher returns over the long term.

Generally, defensive assets provide you with a relatively steady return and, therefore, income. However, some growth assets are usually needed to keep your funds growing during your retirement, so they last longer. With an account-based pension, you can mix defensive and growth assets to a ratio that you’re comfortable with.

Annuities

Some annuities could provide you with regular and guaranteed income for either a fixed period or for life. They are more secure than account-based pensions as your income is guaranteed regardless of what the share market and interest rates do.

The downside is that you’re locked in to the agreed income for the whole term or the rest of your life. If your circumstances change, you generally can’t withdraw a lump sum. A lifetime annuity also has no residual capital value, which means you can’t leave it to someone in your will.

The best of both systems

Continuing to build your investments, including your super funds, is still crucial in retirement. They need to keep growing to ensure your retirement income lasts as long as possible.

This means it becomes increasingly important to protect your super growth funds from market falls while still allowing them to grow if the market goes up.

Other things to consider

Age pension eligibility

When it comes to the Age Pension, there are several rules to determine your eligibility. You can learn more by visiting Services Australia, but some of the basic rules are:

• You must have reached your Age Pension age, which is currently 67.
• You must be a resident of Australia.
• You must pass income and asset tests.

If you don’t meet the income and assets tests to be eligible for the Age Pension, you may be able to access the Commonwealth Seniors Health Card (if you pass an income test). This card provides affordable medicine, bulk billed doctor visits and depending on what state you live in, there may be some other concessions that you’re entitled to. You can find out more from Services Australia.

Speaking to a financial planner

With so many options, it’s a good idea to seek help to ensure you’re investing in a way that suits you. Particularly as there are some more complex considerations, such as tax implications. You can talk to us if you need more help planning for your retirement.

Source: NAB
Reproduced with permission of National Australia Bank (‘NAB’). This article was originally published at https://www.nab.com.au/personal/life-moments/work/plan-retirement/income
National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686. The information contained in this article is intended to be of a general nature only. Any advice contained in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice on this website, NAB recommends that you consider whether it is appropriate for your circumstances.
© 2025 National Australia Bank Limited (“NAB”). 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.

Super and planning for retirement

Check your super

When you start to plan for retirement, you’ll need to check your super:

• where it is
• how much you have
• whether you have lost or unclaimed super
• consider consolidating accounts where relevant
• that your details are up-to-date with the ATO and your super funds.

You can do this in 5 simple steps with the ATO’s super health check. For most people it only takes a few minutes.

It’s important to know your total super balance and contributions caps, especially if you plan to contribute to your super. When you check your total super balance, take a note of your concessional and non-concessional contributions. These will indicate if you can make extra contributions or are approaching your limit.

Estimate how much income you will need to retire

The Australian Securities and Investment Commission’s (ASIC) Moneysmart website has information and tools to help you prepare to retire. You can use their:

• Super and pension age calculator to work out when you can access your super and the age pension
• Budget planner to work out your living costs
• Retirement planner to estimate your income from super and the age pension.

Your superfund may also offer a range of calculators to help you. You can access information to help you understand your finances at a free Financial Information Service (FIS) webinar run by Services Australia. You can book to attend a live webinar or watch recordings on their website.

How can I increase my super?

You can increase your super by making extra contributions. Before deciding whether to contribute extra, remember to consider your total super balance and contribution caps. Exceeding the caps may lead to extra tax.

If you decide to contribute extra to your super, the Moneysmart super contributions optimiser will help you work out which type of contribution will give your super the biggest boost.

The following contribution types may be available as options to increase your super (separate eligibility conditions apply):

• concessional and non-concessional contributions
• carry forward unused contribution cap amounts
• downsizer super contribution for people over 55 who have sold their primary residence
• government co-contributions to match your extra personal contributions (up to $500)
• a low income super tax offset (LISTO) payment (up to $500)
• spouse contributions
• capital gains tax retirement exemption contribution for people under 55 if you are selling a small business.

If you are employed, it’s important to remember that your employer’s contributions will count towards your concessional contributions cap.

You may have more than one super account. Consider consolidating your super which means combining super into one account to help save on fees.

Visit ASIC’s Moneysmart to learn more about how to grow your super.

You can also talk to us about the investment options available to help you grow your super.

Considering an SMSF to grow your super?

If you’re thinking about a self-managed super fund (SMSF) to grow your super, visit Moneysmart to learn more about what is required and to understand if an SMSF is right for you.

Accessing your super to retire

When you reach your preservation age and retire, you can access your super to fund your retirement.

You can also access your super:

• when you turn 65 years old
• if you are aged 60 to 64 years of age, under the transition to retirement rules, while you continue to work.

For more information, see Accessing your super to retire.

You can access your super as a lump sum, income stream or a combination of both. Visit Moneysmart to learn more about your retirement income.

After you retire, you may decide to return to work, and you may be able to contribute to your super again. However, it’s essential to consider how this might affect your income, including Australian Government payments (such as the age pension) and your superannuation.

You can discuss your options:

• by using the Financial Information Service – Services Australia
• with your super fund
• by contacting us to understand any potential impacts.

Each fund has governing rules. It’s essential that you talk to your super fund, or talk to us about how you can access your super in retirement and what options are available to you. If you’re a member of an SMSF, understand how you can be paid your benefits.

Tax on super benefits

The tax on super benefits depends on factors like your age, payment amount, and whether your super is taxed or untaxed. If you are 60 years old or older, your super payments may be tax free. For personalised advice, speak to us.

If you’re considering an income stream, check your transfer balance cap (TBC). Exceeding your TBC may lead to extra tax. TBC also applies to a death benefit income stream.

For more information, see Tax on super benefits.

After you retire, even if you don’t need to lodge a tax return it’s important that:

• your contact details with the ATO and your super funds are kept up-to-date
• you regularly review your super on ATO Online
• you check to see if you have any lost or unclaimed super.

Consider seeking professional advice

This information is not financial advice. We can help you make informed decisions about your super and retirement options.

Source: ato.gov.au September 2024
Reproduced with the permission of the Australian Tax Office. This article was originally published on https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/super-and-planning-for-retirement
Important:
This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person. 
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.

Bonds are not usually the flashy upstarts of the investment world with their every move reported, like stocks.

But the Trump Administration’s extraordinary refashioning of world trade, with on-again off-again tariffs of eye watering amounts, has put bond markets in a similar position to share markets – in turmoil.

So, with the bond markets attracting more attention than usual, we take a closer look at the asset class.

What is a bond?

A bond is a bit like an interest-only loan and there are many different types of bonds available. A government (government bond), or sometimes a large company (corporate bond), issues bonds to investors to raise funds for infrastructure or, in the case of a company, for expansion.

Large institutional investors tend to favour some of the more complex types. Retail investors are more often interested in fixed-rate bonds, known as a fixed-income investment because of the regular payments made to the investor (or the coupon interest rate). The principal (called the face value) is repaid at an agreed date when the bond matures.

These bonds can also be traded on a secondary market by those who’ve chosen to sell their bonds before maturity. In this case, depending on the state of the markets and the economy, the amount they’re worth, or their capital value, may be higher or lower than the face value, which is fixed.

The most common fixed-rate bonds, issued by governments, are generally considered more stable. Nonetheless, all bonds are assigned a credit rating by independent rating agencies such as Standard & Poor’s or Moody’s.

Australia’s Commonwealth bonds, issued by the federal government, are AAA-rated reflecting strong fiscal management, economic stability and low default risk.ⁱ

State governments and quasi-government organisations such as the World Bank also issue bonds. The risk level for this category of bonds can vary.

Large companies, looking to expand or start new projects, often use bonds as a way to raise funds. Corporate bonds generally pay higher interest but are considered slightly more risky.

How to buy bonds

Investing in bonds can help to diversify a portfolio and provide a steady stream of income but for those with no knowledge or experience of the market, it is important to get quality professional advice and speak to us.

For example, if you had been relying on the conventional wisdom that bond markets are often up when share markets are down, recent share market activity would have delivered a shock. The usual flight to safety from share price volatility to bonds did not happen in the United States where, for a time, both markets were falling.

While it is possible to buy bonds directly when there is a public offer, it can be difficult for smaller individual investors to participate because of the large minimum transactions required.

Instead, most retail investors look to bond funds, bond exchange traded funds (ETFs) or managed funds for exposure to the bond market. The variety of funds on offer can help to diversify a portfolio by giving access to a range of different markets.

What affects bond rates?

Interest rate movements directly affect bond prices on the secondary market.

When interest rates rise, bond prices fall because newly issued bonds will be at the higher rate making older bonds less attractive and reducing demand.

Conversely, bond prices rise when interest rates fall because new bonds will offer the lower rates meaning there will be higher demand for older bonds, driving their prices up.

Bond prices are also influenced by economic conditions and investor sentiment.

Rising inflation can cause bond prices to rise while strong economic growth may decrease bond prices because investors often prefer to buy shares. Bonds with a lower credit risk, such as AAA-rated government bonds, tend to attract higher prices.

Be alert for scams

The Australian Securities and Investments Commission (ASIC) is warning investors about scammers using bond investments as a lure.ⁱⁱ

In one report earlier this year, scammers claimed to be offering sustainability investment bonds in Bunnings Warehouse.

The scam offered higher than market returns and claimed that investments are protected by the government. It included links to Bunnings genuine website although the company does not offer bonds or any investment products.

ASIC’s MoneySmart website warns that scammers often impersonate real companies. They may use the name of a real person working at the bank or company they say they represent.ⁱⁱⁱ

“Be wary of surprise contact and independently verify who you are dealing with,” says ASIC. For detailed steps, see check before you invest.

If you would like to learn more about your options for investing in bonds, please give us a call. 

How do bond yields change?

When bond prices fall, yields rise because the fixed coupon rate represents a higher percentage of the lower price. Similarly, when bond prices rise, yields fall because the fixed coupon rate is then a smaller percentage of the higher price.

For example, suppose interest rates fall. New bonds that are issued will now offer lower interest payments.

This makes existing bonds that were issued before the fall in interest rates more valuable to investors, because they offer higher interest payments compared to new bonds. As a result, the price of existing bonds will increase. However, if a bond’s price increases it is now more expensive for a potential new investor to buy. The bond’s yield will then fall because the return an investor expects from purchasing this bond is now lower.^iv

i Fitch Affirms Australia at ‘AAA’; Outlook Stable

ii Scam alert: ASIC warns consumers about investment bond scam impersonating Bunnings | ASIC

iii Imposter bond investment scams – Moneysmart.gov.au

iv Bonds and the Yield Curve | Explainer | Education | RBA