All posts by Robert Wright

Five tips for a better retirement

By Robert Wright /November 03,2020/

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.

Source: AMP

Aussies saving for a rainy day instead of a holiday

By Robert Wright /November 03,2020/

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.

Source: AMP

Six steps to building good financial habits

By Robert Wright /November 03,2020/

How financially secure do you feel? Recent research into Australians’ financial wellness – which is a person’s satisfaction with their current and future financial situation – revealed that people with good financial habits feel more financially secure.

It sounds like a no-brainer. But adopting good financial habits isn’t always as easy as it sounds, start building good financial habits with these six steps.

Make your own fresh start

Why do we always start a healthy eating plan or new exercise regime on a Monday? It’s called leveraging the context. And while we find it easier to form new habits during a significant life change like moving house or having a baby, there’s nothing to stop you finding opportunities in your day-to-day routine to instil your new habit.

• Review household costs as they crop up. For example, can you reduce the amount spent on groceries when doing the weekly shop? If your health insurance premium is due, check the plan still meets your needs. Starting a new job? Consider if it’s right for you to consolidate your super. By committing to reviewing one thing at a time, you can start building good financial habits as you go.

• If you’re now working from home, consider transferring your weekly travel allowance into your savings account each Monday morning.

Piggyback to an existing habit

It’s often easier to tag a new habit onto the end of an existing one. Think about how much easier it is to remember to floss after you’ve brushed your teeth.

• When doing your yearly tax return, why not review your financial goals for the coming year?
  
  
• When it’s time to renew your car insurance, take some time to check you’re getting the best deal from your utility providers too.

Make it easy

If we think something’s going to be hard, we often give up before we start. Keeping it simple and making sure we have the tools to succeed can help.

• Tackle one area of your finances at a time to avoid feeling overwhelmed.
  
  
• Dedicate a consistent time each week or fortnight to do your financial admin and block it out in your diary.
  
  
• Use technology like banking and budgeting apps and direct debits to make things quicker and more automated.

Cues and rewards

When we start a new habit, it’s important to use cues to remind us to perform the new habit and feel rewarded for doing it.

• You might decide to tackle your finances every Wednesday straight after dinner. Then you can reward yourself with a yummy dessert afterwards.

• If you’re saving for a new car, you might consider transferring surplus cash from your current account into your new car fund each time you fill up with petrol. You’ll be rewarded with your new car even sooner.

• Don’t underestimate the power of ticking something off a list. This simple act can make you feel great.

Practise and repeat

It takes an average of 21 days to form a habit when we’re focused and want to achieve it. Regularly practising your new good financial habits is key to making it stick.

• Pop a daily, weekly or fortnightly reminder in your phone or diary. It can help until you remember automatically.

• Mentally commit. If we have enough time to be on social media, we have enough time to form good financial habits.

Use meaning for motivation

Think about the meaning behind your new habits to help keep you motivated, both while forming the habit and once it’s part of your routine.

• If you’re saving for a house, it doesn’t just mean having your own place to live. It’s creating a home, providing security for yourself and your family into the future, and it shows you have the willpower and commitment to achieve long-term goals.

• Likewise, for putting money aside for emergencies. It doesn’t just mean you have the funds to cover a burst pipe. It means you have greater peace of mind and are better protected to weather times of financial uncertainty.

COVID has made us value feeling financially secure, and staying on top of your money can be hard. However, with a little work and commitment to creating good habits, you’ll soon be on the road to taking control.

Source: AMP

Why you need a Will

By Robert Wright /October 16,2020/

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 making 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 their 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.

Source: Money & Life