Yearly Archives: 2020

Tax-effective ways to boost your super

After a year when the average superannuation balance fell slightly or, at best, moved sideways, the summer holidays could be a good opportunity to think about ways to rebuild your savings while being mindful of tax.

With the Reserve Bank reducing interest rates to record lows and not anticipating a rise until 2024, it’s more important than ever to ensure your retirement savings are working as hard as possible.

One way to do that is by taking advantage of super, which offers valuable opportunities to tax-effectively rebuild your retirement savings.

Reducing your tax bill

If you make super contributions by setting up a salary sacrifice arrangement with your employer, for example, you can potentially reduce your tax bill while also boosting your super.

By diverting some of your pre-tax salary into super rather than taking it as take-home pay, your money will be taxed at 15 per cent, rather than your marginal tax rate.

Investments made through super also enjoy a concessional tax rate of only 15 per cent on any investment earnings. This compares with tax at your marginal rate, which could be as high as 47 per cent (including the Medicare Levy), on investment earnings outside super.

Claim a tax deduction

You are also able to make personal super contributions on which you claim a tax deduction.

Previously only available to the self-employed, this strategy is now available to everyone. It allows you to claim a tax deduction in your annual tax return for eligible voluntary contributions into your super account made during the financial year from your after-tax earnings.

Providing you stay under the annual concessional contribution limit (currently $25,000 a year), this can be a useful way to cut the amount of income you pay tax on.

Play catch-up with your contributions

If you have less than $500,000 in your super account, you may consider making carry-forward concessional contributions. If you haven’t fully used your annual concessional contributions caps since 1 July 2018, you may have some unused cap amounts that you could use to make a larger contribution this financial year.

Unused concessional cap amounts can now be carried forward for up to five years.

Consider non-concessional contributions

If you have more funds available and are closer to retirement, you might also consider making a non-concessional (after-tax) contribution into your super account to boost the amount you have in the run-up to retirement.

Generally, you can contribute up to $100,000 a year in after-tax money. Not only is the tax on investment earnings on these contributions only 15 per cent, but they boost the income you can enjoy tax-free in retirement.

If you have a larger amount available, from an inheritance or selling an asset, for example, you could even consider making a bring-forward contribution of up to $300,000 in a single year if you are under age 65.

Get the government to contribute

Another opportunity for eligible low to middle-income earners is to make a personal after-tax contribution of up to $1,000 and potentially receive a co-contribution of up to $500 from the government. The co-contribution amount will vary depending on your income and the number of contributions you make, but it can be an easy way to increase your super balance.

Another tax strategy to consider if your spouse or de facto partner earns less than $40,000 is to make an after-tax contribution into their super account. You could be eligible for the maximum tax offset of up to $540 if you make a contribution of at least $3,000 into your spouse’s super account, provided they earn $37,000 or less. The tax offset tapers off as your spouse’s income increases before cutting out at $40,000.

Strategic review of asset allocation

As super is a structure for investing, not an investment in its own right, it might also be a good time to take a closer look at the mix of assets in your super.

After COVID-induced market volatility, and with historically low-interest rates, your allocation may have drifted away from your strategic plan.

With the right advice, tax-effective super strategies offer an easy way to rebuild your retirement savings and achieve your overall wealth creation goals.

If you would like to discuss your super or investment strategy, reach out to the JBS Financial to help to discuss your situation.

Creative holiday ideas to inspire you

Planning a holiday gives you something to look forward to. Even if you’ve been able to maintain a kind of normal during Coronavirus, most people have experienced additional stress from the uncertainty and isolation. This is especially true for Victorians who have had to endure a long and difficult lockdown period. No matter where you are in Australia, if you’ve been working from home, you may have loosened your work-home boundaries and lost that feeling of rest.

Regardless of your situations, it’s important to take the opportunity to restore and refresh – even if your preferred holiday destination isn’t available right now. Holidays are important for your physical and mental wellbeing. When you return, you may feel more productive, energetic, motivated and creative.

City break, country road trip or a staycation?

As you reinvent your holiday plans and switch the long-haul flight for a leisurely drive, fresh local adventures await you. Here are three types of holidays to consider:

  1. Take a city break

 Australia’s cities are bursting with fascinating options: a cultural injection, a romantic getaway or family fun. Wherever you live, there’s always something different to discover. An escape to your own state capital offers an array of possibilities, just be sure to check ahead when booking for any conditions or restrictions related to your stay.

    • Canberra is a dazzling destination – named Lonely Planet’s third best city in the world to visit in 2018. It’s famous for its popular museums such as Questacon and the National Portrait Gallery and its immersive outdoor actives such as hot air ballooning and mountain bike riding.
    • Sydney offers undiscovered gems like the White Rabbit Gallery and iconic exhibits like the Archibald, Wynne and Sulman Prizes – available until January 2021. Glistening harbourside walks such as the Spit Bridge to Manly can be combined with a visit to the Quarantine Station Museum for an insight into how travellers to Australia experienced disease quarantine in the past.
    • Melbourne always has something new and exciting to discover. With the city opening up again, it’s a great time to revisit favourite destinations or find new ones. Have a picnic in the Royal Botanic Gardens, explore the Carnivores Trail at the Melbourne Zoo, or support local producers and makers at one of the many markets around the city – most of which are reopening from November.
    • Adelaide has opened up a new attraction, the Centre of Democracy, with exhibits using cutting-edge interactive digital experiences. Adelaide’s Migration Museum shares moving stories of local people and communities – perhaps your family’s story is among them?
    • Brisbane has it all – the City Markets, live Australian music in Fortitude Valley and vibrant outdoor restaurants. Consider taking in the Aboriginal cultural trail in the Boondall Wetlands and the burgeoning State Library of Queensland.
    • Darwin is full of wild natural sights and history of courage and sacrifice. Tour the Royal Flying Doctor Service museum and the Defence of Darwin Experience at the Darwin Military Museum.
    • Perth is the city of beautiful parks and pristine beaches. Enjoy a trip to Rottnest Island and a visit to historic Fremantle. Take in a tour of Fremantle harbour and its prison – searching the convict database – perhaps your name is there?
    • Hobart offers strolls through historic Battery Point, baked treats from quaint cafes topped off by kayaking or sailing on its vast waterways. Planning your trip, you’re likely to find a wider range of accommodation choice and bargains in cities versus regional areas. Plus, many CBD hotels are currently offering discounts.
  1. Head for the country

 Regional holidays are making a resurgence this year. Getting out into regional areas is an opportunity to discover local places, shop small and support regional communities.

    • Many bushfire-affected businesses are inviting holiday-makers to return. In NSW, recovering regions include Shoalhaven Heads, Berry, Bowral, the Blue Mountains, Snowy Mountains and the South Coast. Water lovers can enjoy the sea kayak tour near Bateman’s Bay; you can get up close to a koala and 80 other species of mammals, reptiles and birds near Port Macquarie and go white water rafting in the majestic Kosciusko National Park.
    • In South Australia, Kangaroo Island is welcoming visitors back after the fires and offers a diversity of natural highlights such as the Raptor Domain Birds of Prey.
    • Western Australia has a plethora of colossal-sized trees, vistas and colour-contrast coasts to be awed by. A highlight is the famous Margaret River region with its caves, beaches and farm produce markets.
    • Queensland’s endless coastal, island and hinterland treasures ensure that a world-class holiday combined with glistening sunshine is never far away.
    • Regional Victoria contains hidden secrets such as Mansfield Zoo’s White Lions in the North East. Or the charm of getting lost in one of Australia’s largest hedge mazes at Myrrhee. And relaxing at Mansfield’s Armchair Cinema under the trees.
    • For Tasmanians, the state is a perfect island escape offering pristine coastlines like Wineglass Bay; tall, silent forests plus a brooding history to uncover.
    • And lastly, the Northern Territory provides some of our country’s most exquisite national parks – the lush pools of Litchfield National Park and the dramatic Nitmiluk National Park. Swap your desk for self-touring 4WD-ing tracks that open up a majestic red landscape for you to explore.
  1. Enjoy a staycation 

If you can’t get away right now, then try to find activities that help you find your flow – any task that helps you practice mindfulness. A little bit of mental focus that allows you to be in the moment can be relaxing – like gardening, renovating and spring cleaning. Exercise, reading or listening to music can also be refreshing.

If you have children, create special memories by building a vegetable garden, staying overnight in a tent in the garden or learning chess.

Bring the holiday to you by watching films from various countries matched with food – perhaps a different country each day. Or you could turn your home into a day spa and enjoy treatments from the comfort of your own home.

Source: Colonial First State

The right times for financial advice

COVID-19 has created uncertainty everywhere and impacted not just our health but our wealth too. From millennials to retirees, we’ve had to review our finances and adapt to the changing environment.

We’ve seen volatile share markets, slashed dividends on bank stocks, record-low interest rates and sectors like airlines, tourism and traditional retail struggling to survive. On the other hand, online shopping and e-commerce have surged, and more people are saving now than before the pandemic.

During this uncertainty, many people have found their financial adviser to be a critical source of guidance and a valuable sounding board. In many cases, the adviser-client relationship has been a long-term connection. It’s built over many years and based on trust and confidence that the adviser has the client’s best interest at the centre of every decision.

Demand for advice doubles

The financial advice industry is full of examples of clients reaching out to their advisers in recent months, leveraging these long-term relationships at a time of worry and crisis.

Recent research from the Investment Trends 2020 Financial Advice Report showed three in four financial advice clients had been in contact with their adviser to discuss the impact of the COVID-19 pandemic.

Advisers are also fielding an unprecedented number of calls from potential clients who are confused by the current markets and understand they need help.

The instability of recent times has undermined the confidence of those who are retired or are about to retire, with many wondering if they’ll be left with enough superannuation savings for a comfortable retirement. But those who have a long-term relationship with their adviser can rely on the fact their adviser knows them well, understands their unique circumstances and life goals, and can deliver advice tailored to them.

Advice for different life stages

Financial advice can be helpful at a range of life stages, not just when thinking about retirement. Some common things advisers can help navigate financially are:

  • saving for and preparing to buy your first home
  • getting married or starting a family
  • budgeting and money management
  • growing wealth
  • estate planning
  • planning for retirement
  • retirement and aged care.

Advisers can help with practical advice in all these scenarios. But more importantly, they can help you focus on your financial priorities and goals and create a plan to achieve them.

Life’s journey has many twists and turns and points at which priorities change. For many people, it’s a journey best navigated not only with partners, family and friends but with a trusted financial adviser by their side.

If you’d like to discuss what’s right for the life stage you are at, reach out to the JBS Financial to help to discuss your situation.

Source: AMP

Many Aussies in the dark about retirement

There’s always been a lot of unknowns when it comes to retirement but throw a global pandemic into the mix, and we’re feeling more uncertainty than ever before. Things we once thought of as quite certain– like being employed, getting decent returns on investments and savings, and a continual rise in house prices – seemingly changed overnight.

And while that’s all led to a whopping 76% of us believing it’s more important than ever to plan for a secure financial future, we still don’t know what that means when it comes to retirement.

The first step is figuring out how much you need. Once you know the figure you’re aiming for, how much you currently have, and how many years you are away from finishing work, you can put a plan in place to help you reach your retirement savings goals.

Ways you might consider doing this include:

  • Topping up super with additional contributions. (Be aware of contribution caps).
  • Replacing any super that’s been accessed through the COVID early release of the super scheme.
  • Paying down personal debt like loans or credit cards.
  • Making additional home loan repayments so you own your home sooner.

Consolidating your super accounts so you aren’t paying multiple fees. (Check you don’t lose important insurance benefits or won’t be charged an exit fee first).

Plan to protect retirement savings

COVID has made us pay closer attention to how our retirement savings are invested and some people may have seen their super balances drop. If you’ve got 15 or more years before you retire, chances are, your balance will likely have time to recover with the usual long-term market movements. But there’s no guarantee, and it doesn’t mean you can just sit back and relax.

It’s worthwhile checking what type of superannuation investment your retirement savings are invested in. Diversified or balanced options can help offer some protection against volatile market swings.

One of the most important things to do is to avoid making hasty decisions. Do your research, and if possible speak to the JBS Financial team if you’re wondering whether it’s the right time to switch investment options or move your super from one fund to another. There may be a risk of locking in losses or unfavourable tax components that could have a significant impact on the kind of retirement you’d like.

Don’t bank on working for longer

Given what we’ve seen with COVID and the economy, it’s hardly surprising 30% of people said they were worried about sequencing risk – a market crash or downturn which significantly reduces the value of super savings. And if that happened, over 50% of us say we’ll work for longer to build our retirement savings back up.

However, that might not be a failsafe backup plan. ABS data shows that of the people who retired in 2018-19:

  • 21% had to stop working due to sickness, injury or disability
  • 11% retired because they were made redundant or couldn’t find work

Add to that the average retirement age was just 55.4 years, working for longer to top up your super isn’t an option for everyone.

Educating yourself and taking control of your financial future can help alleviate concerns about retirement. Having a plan and feeling financially prepared can give you peace of mind. You spend your life working hard, and deserve to feel excited, not anxious, about retirement.

If you’d like to discuss the financial plan and protections you need, reach out to the JBS Financial to help to discuss your situation.

Source: AMP

Aussie’s saving for a rainy day instead of a holiday

Not many people can say they’ve been unaffected by COVID-19. Whether you’ve lost work, had hours reduced or been fortunate to maintain employment, COVID has been a wake-up call for how we manage our money and set financial goals.

How are we managing?

Many of us are doing smart things such as:

  • 29% are cancelling non-essential services
  • 25% are reducing spending/expenses
  • 42% are putting money aside for unforeseen events

But worryingly there’s been an increase in people relying on credit cards to pay for everyday expenses and taking out personal loans. And 23% of 18-35yr olds surveyed had also accessed some of their superannuation early.

How has it changed our goals? 

For starters, more of us are actually setting goals than before COVID. It’s made us more determined to gain control of our money and be better prepared for whatever life throws our way. And the goals we’re aiming for now are all about paying down debt and saving.

Goals we’re mostly on track for:

  • 73% have reduced spending/expenses
  • 65% have paid off the mortgage
  • 61% have paid off personal loan/credit card
  • 60% have put extra money aside for retirement

However, the COVID curveball has meant we’ve had to do a bit of fine-tuning. We’re extending the timeframe it’ll take for us to reach our goal, or we’re abandoning it altogether if it no longer suits our situation.

  • 43% have stopped saving for an investment property
  • 40% are no longer saving for a big-ticket item like a holiday
  • 35% postponed investing in the stock market
  • 31% decided to put on hold saving for a house deposit

Goodbye holiday, hello rainy day

Pre-COVID, saving for a holiday was a priority goal for almost half of us. Whether it was an annual trip overseas or regular cheeky getaways, Aussies were big travellers. But with the world shut down and travel greatly restricted, we’re realigning that goal to something that makes us feel more secure – saving for a rainy day.

Because we’re more focused on saving, we’re watching our spending more closely too. Things we used to think we needed have been recategorised as nice-to-haves. And it’s not just the overhanging threat of job losses that have made us feel this way. Stay at home orders and have allowed us space to take stock and start appreciating the simple things in life once again. We’re valuing time with our family, a slower pace, and being debt-free over buying things for the sake of it, or that we might not be able to afford.

Whatever your situation, now could be an ideal time to revisit your financial goals and decide if they’re still right for you. If you would like to discuss how you create a better pathway to financial freedom, reach out to the JBS Financial to help to discuss your situation.


Source: AMP

Taking control of your finances after a separation or divorce

Going through a separation or divorce can be a stressful and emotionally-charged time, particularly when it comes to conversations around shared finances and the division of assets. Having a clear plan for how you approach these discussions can help provide direction and ensure you reach a fair solution that everyone is happy with.

Set yourself up for financial independence

The process of dividing assets can take some time, so in the first instance, it’s important to set up bank and credit card accounts in your own name so you have the freedom to manage your own finances day-to-day. Take the time to review any direct debits or deposits you may have set up on shared accounts and redirect these to each individual’s new account, for example, your wage, monthly phone bill, or Medicare repayments. Reviewing previous bank statements can help to identify any direct debits you may have set up.

Establish a clear picture of your shared finances

The next important step is to capture a clear picture of what you own together and the value of each. This document can not only help guide discussions around how to fairly divide assets and liabilities but can provide a helpful checklist for things you may need to address such as closing shared bank or credit card accounts, reviewing your insurance policies, or accounting for any debts or commitments that will continue to need to be paid.

This list could include:

  • Savings accounts
  • Investments
  • Credit cards
  • Property and other assets
  • Superannuation
  • Life insurance, income protection or TPD policies
  • Debts and liabilities
  • Household items and possessions – furniture, art, appliances.

There are a number of nuances and complexities to consider when dividing assets particularly when it comes to superannuation and taxes relating to property. We can help provide guidance on the different considerations when dividing these assets.

Ongoing financial considerations

When going through a separation or divorce, everyone’s relationship and financial circumstances are different. That’s why it’s important to come to an arrangement that’s right for you, and for some, this will involve an ongoing financial relationship. This is commonly the case if you have children, as you will need to agree where the children will live, and how you will manage and share their living expenses ongoing. For many, this means that one person will remain in the family home which is something that should be considered when mapping out your shared assets and liabilities. When considering how you will share your parenting responsibilities, it’s also valuable to look at the insurances you have in place that will be there to protect your children in the long run.

The most important thing as you make these adjustments is that you feel empowered and in control. As one of the biggest shifts in your finances may be moving to a single income, part of re-evaluating your financial plan should be to review the protections you have in place.

We are here to support, as you establish your financial independence and revisit your individual goals. If you’d like to discuss the financial plan and protections you need, reach out to the JBS Financial to help to discuss your situation.

Source: TAL

Where do we stand with our finances since COVID hit?

Everyone in Australia has been affected by the COVID pandemic to some degree. With the disruption to our work and social lives, it’s one of the biggest changes many of us have ever faced. But what has it meant for our money and financial wellbeing?

Nearly half of Australians are struggling

A recent survey found that four in ten Australians have lost income because of COVID-19 and are either struggling to make ends meet (11 per cent) or dipping into savings to get by (31 per cent).

What we’re worried about: jobs, savings and super

In spite of the JobKeeper payments supporting businesses to keep employees on the payroll, job insecurity is the number one concern for Australians right now. Women are far more likely to be worried about losing their job (40 per cent compared to 29 per cent for men), and the vast majority of 18 to 24-year old’s (81 per cent) are worried about becoming unemployed.

What we regret: budget basics

For most Australians, the COVID events of 2020 have been a wake-up call for their financial habits and behaviours. With 70 per cent of Australians surveyed saying they could have done better or different to improve their financial position, it seems we’ve learnt an important lesson about being financially prepared for the unexpected.

The good news is that these ‘regrets’ are helping us reconsider our financial priorities. When asked about changes they’re willing to make post-COVID, survey respondents ranked “be more frugal about my lifestyle choices” first, followed by “pay down debts” and “create a budget to understand what I’m spending and saving.”

Three ways to look after your financial future

Acting on these good intentions is certainly going to be important for many Australians, especially those having to manage on less income. If you’re feeling more uncertain about your job, income and financial future because of COVID, here are some simple steps you can take to start a long-term commitment to better financial outcomes:

  1. Start a ‘COVID-proof’ plan.

Take this as an opportunity to harness positive financial habits you’ve picked up during COVID. Prepare a list of expenses you don’t need any more and another list of how you could use this money to meet your current needs or look after your future – by saving, investing or paying down debts for example. By keeping a COVID mindset even after COVID is over you can make a lot more progress towards your financial and life goals.

  1. Think ahead

Work out where you want to be financially in the future – think five years, 10 years, or retirement. Then work backwards for how to get there, along with a timeline of the important milestones you’re looking forward to along the way.

  1. Make an appointment with a qualified financial planner

Understanding your current financial situation and short and long-term financial goals – having a financial plan – means you can better manage your finances. Knowing you’re taking care of your immediate expenses, without compromising on saving for the future allows you to live your today while making sure your tomorrow is planned.

Financial advice makes a difference

The people surveyed who have worked with a financial planner have experienced positive outcomes as a result of their advice. One in five have engaged a financial planner and have experienced less impact to their finances compared with others who had not received advice. Almost all of them (87 per cent) did not need to access their super early.

Australians who’ve planned for tomorrow experience greater peace of mind and wellbeing today. They are clearer on what they can spend and save and will sleep peacefully at night knowing that they have someone there to help them understand it all.

If you would like to discuss how you can manage your finances through this crisis, reach out to the JBS Financial to help to discuss your situation.

Source: Money and Life

Five tips for a better retirement

Five tips for a better retirement

Retirement is an exciting time. It’s the long-awaited reward for a lifetime of work and, if you’ve planned it correctly, it heralds a life stage synonymous with relaxation and enjoyment.

However, to make sure your retirement is everything you’d hoped for, it’s crucial to make smart decisions to help you stick to your financial plan, achieve investment goals and aid you in your transition.

If you’ve recently left the workforce or it’s in your near future, these five tips may help you secure a better and more comfortable retirement.

1. Understand your entitlements

Getting older has its upsides – there are certain benefits that come from being of retirement age.
Seniors over the age of 60 have access to cheaper public transport, health care and prescription medications by way of the Seniors Card and Pensioner Concession Card to help you live a more comfortable lifestyle. If you’re over the age of 66, you may also be eligible for the Age Pension.
Depending on eligibility, seniors can also access tax offsets, government loans or pension payments in advance to assist with immediate expenses, as well as reduced banking fees.

2. Free up some extra money

Having a little extra in the bank is always handy, especially when you’ve left the workforce. While there are a few ways you can free up some extra money, downsizing – or selling your current home to relocate to a smaller and cheaper one to access the equity – is one common option. Before you do that, however, you’ll need to make sure it’s the right move for you.

3. Identify where you can save a little or a lot

Full retirement with no access to work essentially means your income is capped, so it’s even more crucial that you understand where your money is going and adjust accordingly. Minimising your expenses can make a big difference to your long-term security so consider freeing up extra money by reassessing your utilities or insurance bills. Shop around for cheaper providers and consider creating a budget to help you reach specific financial goals and save for unexpected expenses.

4. Stay the course with your investment strategy

Although it’s not unusual for the market to fluctuate, it can be worrying to see your investments shift as much as they have in the wake of COVID-19 (coronavirus). But that doesn’t necessarily mean you should make any dramatic changes to your investment strategy.

Many investments often involve some amount of risk and, pandemic or not, an important step to navigate potentially choppy waters is to regularly check in with your strategy and your financial adviser.

5. Stretch out your working life (if you can)

If you’re of retirement age, you might have already begun the process of winding down work. Considering the current climate, however, your hopes for retirement may have changed since you made that decision.

It doesn’t have to be a long-term solution but working for a little longer – even part-time – could help you pay down any outstanding debt or top up your super savings for retirement.

If you would like to discuss how you create a better pathway to retirement, reach out to the JBS Financial to help to discuss your situation.

Source: AMP

Inflation, deflation – what’s in a name?

When the inflation rate fell into negative territory in the June quarter, it was so unusual it begged the question of what this means for the economy. Are we facing deflation or even stagflation and what is the difference?

In the June quarter, the annual inflation rate fell to minus 0.3 per cent, only the third time in 72 years of record-keeping that the rate has been in the negative.

Much of the fall was attributed to free childcare (part of the special COVID-19 measures) and low petroleum prices during the quarter. The general view is that the September quarter will return to positive territory when childcare fees resume.

So what is inflation and why does it matter?

What is inflation?

In Australia, the main measure of inflation is the consumer price index (CPI). This measures the rate of change in the average price of a basket of selected goods and services over time.

While the index can move up and down, a negative inflation rate – no, that’s not an oxymoron – is referred to as deflation.

Generally, the Reserve Bank of Australia (RBA) aims to keep the inflation rate between 2 and 3 per cent. But in the current environment, the RBA is now expecting the CPI to remain below 2 per cent until at least December 2022.

A falling consumer price index – particularly one that is in negative territory – sounds like it should be a good thing as it will give you greater purchasing power with the lower prices. After all, who doesn’t like a bargain? But in reality, it can play havoc with retail businesses who are faced with lower profits but not necessarily lower costs. This can put a squeeze on their business, which can often lead to retrenchments and a spike in unemployment.

The other two occasions when Australia experienced deflation were in 1962 and in 1997-98.

The 1962 negative rate was after then Prime Minister Menzies implemented two credit squeezes to end the inflation caused by the Korean War Boom. The 1997 episode was in the wake of the Asian Financial crisis.

A slowing economy

Clearly, we are living in extraordinary times with COVID-19 and until the pandemic is more under control we can expect further slowing in the economy.

But at least this curtailment of economic activity is not coinciding with higher prices for goods. If that were the case, the country would be faced with stagflation which poses a far greater squeeze on households than deflation. Stagflation is a situation with rising inflation (prices) and slowing economic growth, often accompanied by high unemployment.

Of course, if your job is not in jeopardy, you will benefit from cheaper goods. But if lower prices become the norm, people may hold off major purchases on the expectation that they can buy even more cheaply in the future. This is not good news as consumer spending makes up 60 per cent of total economic activity, so a contraction in spending generally results in a contraction in the economy.

However, if your employment is insecure and the overall unemployment rate rises, this will depress household spending. It will also have an impact on the property market.

Unemployment takes its toll

According to the latest figures, more than one million Australians are currently unemployed and many more could face uncertainty going forward. Whether you rent or are buying your property, finding the funds can present problems.

In some areas, as demand dried up in the June quarter, rents dropped by as much as 25 per cent. This may be good for renters, but it is not for those with investment property as part of their retirement strategy. If rents fall – or indeed if your property is vacant for some time – it may jeopardise retirement income.

Property prices are also under attack with distressed sales coming to the fore as the unemployment rate grows. When property values fall, mortgages become more expensive in real terms as your equity may be reduced – and in some cases, you could find yourself with negative equity in your property.

Hopefully, the measures introduced in Australia to counter COVID-19 will prove successful and the economy will begin to recover.

If you would like to discuss your overall investment strategy each out to the JBS Financial to help to discuss your situation.

Why you need a Will

It’s no wonder people tend to avoid making a Will. We can find it hard to face the fact that death is part of our future and that there may be a time when we won’t be able to manage our own finances due to poor health.

However, the COVID-19 pandemic has made us all more aware of how life can change when we least expect it and our health is something we shouldn’t take for granted. So there really is no better time than now to get your estate plan in order.

What is an estate plan?

Your estate plan is a set of arrangements that sets out what will happen to your assets when you die and/or if you become unable to manage your own affairs. Your Will is just one part of your estate plan. It can also include a Power of Attorney arrangement giving someone else legal authority to manage your assets and finances if you become incapable of doing this yourself.

How do I make a Will?

You can take a DIY approach to make a Will with a Will kit. But not all your assets are covered in your Will. You super, for example, is not an estate asset and you will need to make a separate arrangement – usually a binding nomination – to make sure your super death benefit is passed on according to your wishes.

Wills and estate plans can be fairly simple, but it depends on your particular family and financial situation. Owning a business, being married more than once or having children are just some circumstances that can demand a more complex estate plan. While it may take a lot more detail and structure to ensure all your assets are properly distributed, it’s worth doing to take care of everything that matters to you.

One of the best ways to make sure your estate plan covers everything it should is to seek advice from a financial planning professional and a solicitor who specialises in estate planning. A financial planner can offer you guidance on growing and protecting your assets during your lifetime.

They can also talk to you about what to consider as you decide how you want your assets to be distributed among your family and loved ones, both before and after you die. This includes the tax consequences of transferring assets to your beneficiaries.

However, a financial planner cannot offer legal advice on your estate plan and they cannot draw up the legal documents you need to make sure your Will and estate plan are legal and binding. You’ll need to work with your solicitor or an organisation that specialises in estate planning.

COVID-19 and your estate plan

Each State and Territory has its own legislation that lays out how estate planning documents must be signed and witnessed. Your solicitor will be able to guide you through this process so that your Will can be considered valid in a court of law.

With social distancing and other restrictions in place due to COVID-19, it can be more difficult to make these arrangements for signing and witnessing your Will and other estate planning documents. In Queensland, New South Wales and Victoria, new legislation has been introduced to allow certain legal documents to be signed and witnessed via video conference.  Your solicitor can get you up to speed on the details of this process and let you know what software and devices you’ll need to complete remote signing and witnessing to meet these legislative requirements.

This legislation does not allow you to have a binding nomination for your super death benefit witnessed via video conference.  To make arrangements for this part of your estate plan, you’ll need to get in touch with your super fund and check their requirements for making a valid binding nomination.

What happens if I don’t have a Will?

If you die without a Will, your assets will be distributed according to the intestacy legislation for your State or Territory. Assets will be shared among family members according to these legal requirements. This is why it’s important to have a Will to make sure that your estate is passed on according to your wishes.

Reach out to JBS Financial to help to discuss what you need to do to get your estate plan in place.

Source: Money & Life



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