Preparing for Retirement

Preparing for retirement

Retirement means starting a new chapter of your life where you get to decide exactly how to spend your time. Though it may not be part of your immediate plans, there are advantages to giving some thought as to what retirement will look like for you and how to position yourself before you leave the workforce behind.

A time of profound change

Even setting aside the huge financial implications of leaving a regular salary behind, retiring from work represents one of the biggest life changes you can experience.

For most people, the freedom of being able to do whatever you want to do, whenever you want to do it, is pretty enticing. However, it is quite common to have mixed feelings about retiring, particularly as you get closer to retirement. What we do for a living often defines us to some extent and leaving your job can mean a struggle with how you perceive yourself as well as how others view you. Coupled with the desire for financial security in retirement and the need to make your retirement savings last the distance, you have a lot to be dealing with.

So, let’s look at the things you need to be thinking about sooner rather than later, from an emotional and practical perspective, to ensure your retirement is everything you want it to be.

Forge your own path

Don’t be tied to preconceptions of what retirement is all about. Retirement has evolved from making a grand departure from the workplace with the gift of a gold watch to a more flexible transition that may unfold over several years. Equally, if the idea of a clean break appeals to you then that’s okay too and you just need to plan accordingly.

The same applies for your timeframe for retirement. The idea that you ‘have’ to retire at a certain age is no longer relevant given advances in healthcare and longer lifespans. If work makes you happy and fulfilled, then it can make sense to delay your departure from the workforce.

Planning how to spend your time

It sounds obvious but you’ll have more time on your hands so it’s important to think about what you want to devote that time to. A study found that 97 per cent of retirees with a strong sense of purpose were generally happy and satisfied in retirement, compared with 76 per cent without that sense.i Think about what gives your life meaning and purpose and weave those elements into your plans.

If you are part of a couple, it’s critical to ensure that you are both on the same page about what retirement means to you. This calls for open and honest communication about what you both want and may also involve some degree of compromise as you work together to come up with a plan that meets both of your needs.

Practical considerations

There’s a myriad of practical considerations once you have started to plan how you’ll spend your time.

Here are a few things you may wish to consider:

  • Where do you want to live? Do you want to be close to a city or are you interested in living in a more coastal or rural area? Are you wanting to travel or live overseas for extended periods?
  • What infrastructure and health services might you need as you age? Are these services adequate and accessible in the area you are thinking of living in?
  • What hobbies and activities do you want to be involved in. Do you need to start developing networks for those activities in advance?
  • Who do you want to spend time with? If you have children and grandchildren, think about what role you’d like to play in their lives upon retirement.

The best laid plans...

Of course, with all this planning it’s also important to acknowledge that the best laid plans can go astray due to factors beyond your control. It’s important to keep an open mind and be adaptable. While redundancy or poor health can play havoc with retirement dreams, it’s still possible to make the best of what life throws at you.

And of course, we are here to help you with the financial side of things to ensure that retirement is not only something to look forward to, but a wonderful chapter of your life once you start to live out your retirement dreams.

i https://www.inc.com/magazine/201804/kathy-kristof/happy-retirement-satisfaction-enjoy-life.html

This article is intended as an information source only and to provide general information only. The comments, examples, words and extracts from legislation and other sources in this publication do not constitute legal advice, financial or tax advice and should not be relied upon as such. All readers should seek advice from a professional adviser regarding the application of any of the comments in this article to their particular situation.


Thriving on social connection

Thriving on social connection

The phrase 'no man is an island' is from a poem written by John Donne and expresses the idea that humans need to be part of a community to thrive. That’s certainly true, by nature we are social creatures and connection is a core human need. So why do some many of us feel alone and what can we do to feel more connected?

The last few years have highlighted the importance of social connection on our mental health and physical well-being, as our movements were restricted to varying degrees. The need to connect socially is as basic as our need for food, water, and shelter, with studies showing that it reduces the incidence of heart disease and stroke.i

You’re not alone in feeling alone

While we all need social connection, so many of us are feeling that it’s lacking in our lives. Feeling isolated is pretty common and happens to us all at one time or another, although loneliness appears to be particularly prevalent at the moment. A 2018 survey revealed that one in four of us are lonely and this increased to around half of us during the pandemic.ii,iii

So, what measures can we take to feel more connected?

Think about what you need

Everyone has different social needs. If you’re used to spending a lot of time with colleagues, friends and loved ones, you might feel isolated or lonely with just a few interactions per week, while for someone who likes their own company that might be simply fine.

On that note, it’s important to be able to enjoy your own company and sometimes periods of being alone can provide inner peace and time for introspection, making those moments of connection all the more precious.

Your social needs also change over time and under different circumstances. A life change like becoming a parent or retiring from the workforce can prompt a shift in your need to connect with others.

Quality can be more important than quantity

It’s important to consider the significance of meaningful connections rather than just social interaction, for the sake of it. Often the intimacy of a deep and meaningful discussion with a close mate can be much more enjoyable than a dinner with people you barely know.

Foster good social skills

Social connection is a two-way street so there are things you can do to improve the quality of your social interactions. You can forge deeper connections by talking about things that matter to you and to the other person, developing good listening skills and demonstrating real interest in what they have to say.

Seek out new people and experiences

It can be hard to foster new social connections. One effective way is to join a group to be with people who have similar interests. This growing need has led to apps being built for this purpose, with one of the most popular being meetup.iv Meetup has groups for everything, whether you are interested in bike riding, cinema, salsa dancing or dining. If you can’t find a group that’s of interest you can always create your own.

When looking to meet new people, try to open yourself up to try new experiences. Not everything you try your hand at will open doors to friendship, but you can always learn from the experience and hopefully have some fun along the way.

Dust off old friendships

Friendships need nurturing and many of us have been guilty of neglecting old buddies – particularly of late. Have a think about the people in your life and the relationships that may have fallen by the wayside and reach out, even if it’s just to grab a coffee.

It can take a little time and effort, but it’s always possible to reach out and strengthen existing connections or forge new ones. The benefits of having those social connections in our lives are profound. Keep in mind that you’re not the only one out there in search of connection and your efforts are not just helping yourself but also benefitting those you are reaching out to.

i https://www.heartfoundation.org.au/media-releases/Loneliness-link-to-heart-disease-in-older-Australi

ii https://psychweek.org.au/wp/wp-content/uploads/2018/11/Psychology-Week-2018-Australian-Loneliness-Report.pdf

iii https://www.blackdoginstitute.org.au/news/what-is-loneliness-and-how-can-we-overcome-it-during-these-times/

iv https://www.meetup.com/en-AU/

This article is intended as an information source only and to provide general information only. The comments, examples, words and extracts from legislation and other sources in this publication do not constitute legal advice, financial or tax advice and should not be relied upon as such. All readers should seek advice from a professional adviser regarding the application of any of the comments in this article to their particular situation.


Elevating your mood…naturally

Elevating your mood…naturally

If it’s been a while since you had that wonderful feeling of euphoria, there are measures you can take to elevate your mood by encouraging production of your bodies naturally occurring ‘happy hormones’.

Our hormones control many aspects of our body’s responses and certain hormones are known to help promote positive feelings, including happiness and pleasure.

Happiness is an emotional state that has a profound impact on our quality of life, enabling us to better form relationships, respond to change and deal with challenges that may come our way. There is a strong correlation between happiness and enjoying good physical health too. And there is no such thing as too much happiness in our lives, so whatever your current level is, there is always room for improvement.

Getting a ‘happy’ hit

Hormonal production is quite a complex aspect of human physiology; however we know that hormones are a reflection of your environment, relationships, exercise regime and dietary choices. In fact, recent studies even point to your gut microbes also playing a role on the production of certain hormones.i What’s exciting about this is you have the power to influence your mood by the choices you make every day.

Here’s a look at how to make the most of these natural mood-boosters.

Get moving

If you’ve heard of, or experienced, a ‘runner’s high’, you might already know about the link between exercise and the release of endorphins.

But exercise doesn’t just encourage the production of endorphins. Regular physical activity can also increase your dopamine - the ‘pleasure’ hormone that plays a motivational role in the brain’s reward system and serotonin - a mood stabiliser that contributes to feelings of wellbeing.ii

You don’t even have to pound the pavement to get the benefits, any intensive cardio exercise like swimming, cycling or rowing can work at stimulating those amazing brain chemicals, just make sure you keep the intensity high, and the routine varied so you are continually pushing yourself at the edge of your comfort zone.

That loving feeling

Oxytocin isn’t known as the ‘love hormone’ for nothing – pleasurable physical touch promotes the production of this chemical, so hugging and cuddling, having a massage, or even patting your pet can have a positive effect in elevating your mood.

Actually, it’s not just touch, any activity that involves positive interaction with others is also beneficial - having a chat with friends can increase oxytocin significantly. Surprisingly, even if you can’t get together in person, a chat on the phone or even connecting with your buddies via social media still works.

Laughter more than the best medicine

If you’ve ever been a bit down and felt much better after watching a funny movie or comedy performance and laughing yourself silly, there’s a scientific reason for your change in mood. Laughter stimulates the production of endorphins and oxytocins and reduces the body’s production of stress hormones.

Even the act of smiling releases those same chemicals and it’s possible to fake it ‘til you make it, as a fake smile has also been known to do the trick.

Music and meditation

Pop on the headphones as listening to music can give more than one of your happy hormones a boost. Different types of music can have different benefits. Listening to instrumental music, for example, especially emotive music that gives you ‘the chills’, increases dopamine production in your brain, making you feel relaxed and at peace. Energetic music with a powerful beat and strong baseline is more likely to increase your endorphin levels, leading to a more euphoric state of mind.

As you can see, there are many ways you can promote these happy hormones, just decide which ones resonate most with you and go for it.

While there are a lot of things that are out of our control which impact how we feel on a day-to-day basis, it is possible to make choices that will support your wellbeing on a hormonal and chemical level and hopefully help you to experience a brighter, happier life.

i https://atlasbiomed.com/blog/serotonin-and-other-happy-molecules-made-by-gut-bacteria/

ii https://www.healthline.com/health/happy-hormone

This article is intended as an information source only and to provide general information only. The comments, examples, words and extracts from legislation and other sources in this publication do not constitute legal advice, financial or tax advice and should not be relied upon as such. All readers should seek advice from a professional adviser regarding the application of any of the comments in this article to their particular situation.


Considering relocation from the city to rural Australia?

Considering relocation from the city to rural Australia?

Australians are leaving capital cities in droves in a phenomenon being referred to as ‘The Great Relocation’. However, there’s a lot to consider beyond the obvious appeal of waking up to the laughter of kookaburras or enjoying a long walk on the beach.

The terms ‘sea change’ or ‘tree change’ have been around for a while to describe those who decide to make a move from the city or suburbs to a more rural lifestyle.

The pandemic has been responsible for heightening this trend due to frustration with lockdowns and people spending more time at home and in their local area than usual, leading them to reassess their lifestyles and where they would prefer to live. Of course, greater work flexibility as measures were put in place to manage the pandemic, have also been a driving force in the exodus to the regions.

Moving to the regions

There is a long-held belief that the sea change/tree change phenomenon is largely confined to baby boomers or those at or nearing retirement, which is incorrect - as early as the mid-2000s, nearly 80% of people changing from city to regional areas have been under the age of 50.i

Geographically Sydney and Melbourne recorded large net losses of people through 2020 and early 2021, regions within an hour of those major centres recorded the strongest growth.ii However, statistics show that the population grew in all major regional cities, reversing a 20-year decline in regional Australia’s share of national population growth.iii

The attraction of lifestyle

The reasons for many Australians turning their backs on the big smoke are predominately lifestyle. Those making the break are attracted by the lure of a slower, less hectic life, proximity to the great outdoors, a sense of community made possible by life in a smaller town and last but by no means least, cheaper property prices than those in the big cities.

Things to consider

If the idea of a move to the sea or a rural town is increasingly attractive, it’s important to also consider the potential challenges you may face. For those leaving friends and family behind, there is often a sense of isolation in being far from those you care about, and it can take some time to make new friends and adjust to life in a new community.

It’s also important to consider how the infrastructure in rural areas differs from where you are moving from. If you have children, will you have access to good schools close by? If you are looking to retire, will you have access to the necessary medical facilities as you age? It may also be a good idea to consider local economic forces and job opportunities.

Don’t be hasty!

A knee-jerk decision brought on by a holiday stay in the area under idyllic summer conditions, can be fraught with danger. It’s a good idea to rent in the area or visit regularly over a longer period of time to gauge whether it will be the right fit. If you get it wrong, it can be a stressful and expensive exercise.

According to analyst Mark McCrindle, a sea change or tree change doesn't work out for one in five people who attempt it, which reinforces the need to do your homework.iv “People make a decision because they think it’s going to work for them financially or it’s going to be less pressure, less commute time and a nicer lifestyle,” McCrindle says. “But sometimes they find some of these regional areas are too small or too quiet.”

The main thing is to not be swept away by emotion, think about what you value and what you are looking for, and weigh up the pros and cons so that if you make the move it will result in the positive change you are seeking.

i, ii, iv https://www.corelogic.com.au/resources/tree-change-sea-change-what-you-need-know-generate-leads

iii https://www.abc.net.au/news/2021-11-18/migration-to-regional-australia-at-record-levels/100628278

This article is intended as an information source only and to provide general information only. The comments, examples, words and extracts from legislation and other sources in this publication do not constitute legal advice, financial or tax advice and should not be relied upon as such. All readers should seek advice from a professional adviser regarding the application of any of the comments in this article to their particular situation.


Investing in your health pays off

Investing in your health pays off

Investing the time, effort and the necessary expenses to maintain peak mental and physical health is one of the most significant investments you will ever make. And the good news is, any steps you take now, start to pay immediate dividends.

We encourage you to think about your financial investments in terms of working towards achieving your lifestyle goals, similarly it can help to think of an investment in your health as a means of further supporting those lifestyle goals so you can live your life to the fullest.

Of course before making an investment in anything, it’s important to know the facts. It’s estimated that Australians spend over 29 billion in out-of-pocket medical expenses.i And a recent study found that 36% of the health burden in Australia is attributable to modifiable risk factors, many of which are easily addressed by lifestyle changes.ii

One step at a time

Change is never easy. Making large changes to your habits all at once can seem rather daunting. Instead, pick one small thing you can do on a daily basis to start to form good habits. An example when it comes to your health could just be monitoring and increasing the amount of water you drink. While it’s a small change, the benefits to your health will really start to add up.

Compounding

Repeated actions get easier over time. When it comes to a routine you are establishing, you can invest the same effort on day 20 that you did on day 1 and you’ll go a little farther or find it a little easier. Take the ‘Couch to 5K’ app for example. Even if you’ve never been a runner or haven’t regularly exercised for some time, the app incrementally can take most people from being a ‘couch potato’ to being able to run 5 kilometres or for 30 minutes in 9 weeks.

View wellness costs as an investment

Gym memberships, fitness classes, exercise equipment, massages and wellness treatments can often be seen as expensive but costs associated with illness can be even more significant. Set aside room in your budget for those things that make you feel good and keep you in top shape.

It’s also important not to skip those check-ups. Many conditions are easily treated with early diagnoses and niggling things can be nipped in the bud before they get any worse.

Maintaining and improving your health also can potentially reduce your health insurance costs and save you money in the long run.

Invest in good fuel for your body

Eating well supports your body to feel, and perform at its best and can reduce the risk of heart disease, stroke, type 2 diabetes and obesity-related illnesses. Recent research reveals that ‘gut’ or intestinal health has a broad ranging impact including on our immune system as well as affecting mental health and mood.iii

That’s not to say you have to only buy food from the health food isle at the supermarket or stick to organic produce, just that it can be worth paying attention to what’s going into your shopping basket and what you are putting in your mouth. Don’t try to overhaul your diet all at once, if you cut out all your favourite unhealthy foods you may be okay for a while but fall back into overindulging when the cravings get too much.

Again, small steps can make a big difference – think about adding a few more veggies into your diet - say a cupful at every meal, reducing your sugar intake or the amount of processed food or fizzy, sugary drinks you consume.

While spending time and money to improve your health will provide you with instant benefits, it will also set you up for your future to enjoy the fruits of your labours and live your best life. Investing in your health is one investment that keeps on giving.

i https://www.aihw.gov.au/getmedia/e8d37b7d-2b52-4662-a85f-01eb176f6844/aihw-hwe-74.pdf

ii https://pubmed.ncbi.nlm.nih.gov/28919119/

iii https://link.springer.com/article/10.1007/s42000-020-00236-4

This article is intended as an information source only and to provide general information only. The comments, examples, words and extracts from legislation and other sources in this publication do not constitute legal advice, financial or tax advice and should not be relied upon as such. All readers should seek advice from a professional adviser regarding the application of any of the comments in this article to their particular situation.


Stepping stones to reach your goals

Stepping stones to reach your goals

The calendar turns over to a fresh, brand new year, full of promise, so how do we keep these promises we make to ourselves and get to the end of the year with our resolutions intact and goals realised?

We all start out with good intentions when we set our objectives for the year to come, but motivation notoriously wanes with time and has the potential to sabotage our chances of achieving our dreams.

While many studies reinforce the notion that willpower struggles after only one month, a study tracking respondents over the course of a full year suggested that at around the three month mark half of resolutions fall over, increasing to a failure rate of around 82% by years end.i

Monthly micro goals

One way to deal with our waning motivation, instead of setting one daunting goal to be achieved over the period of a whole year, is to come up with a series of monthly, smaller goals. That will give you 12 ‘mini goals’ which ideally need to be achievable on a daily basis. The theory is that if you follow the same pattern for around 30 days, you’ll be establishing this pattern as a habit that you are likely to continue into the future. Each successive month will see you build on that success.

Working towards an end goal

Part of the key to making this approach work, is to ensure that all your monthly micro goals are working towards an overarching end goal. Your micro goals need to follow a theme.

This is where you can come back to your New Year’s resolution and base your theme on what you want to achieve for the year. Say your theme for the year is around career aspirations – for example achieving that promotion. Your first month could simply be setting aside some time each day to network and meet people within the organisation – improving your interpersonal skills. The next month might be focused on exploring tools to improve your productivity…and so on as you work your way through each successive month.

If your priority is to work on your health and wellbeing, and end the year capable of running ten kilometres, it’s also important to set some micro goals that get you there. Again, you can start small - a way of working incrementally towards your goal might be to start by drinking more water, then a month dedicated to getting more incidental exercise in your day, then a month focused on improving your diet and losing a little weight, working slowly up to lacing up your boots, hitting the track and increasing your endurance.

Smaller goals add up with time

We are calling them micro goals for a reason, it’s important to not bite off more than you can chew. The key is how they add up. Viewed alone these smaller goals may not seem like a lot, but the shorter duration makes it a lot more likely you’ll stick at them, developing good habits that will hopefully accrue, rather than fade over time. The fact that you are in effect starting afresh every month also gives you a much better chance of success.

Add some support into your plan

Don’t be afraid to put in some processes to help you get there – it can be a good idea to use online apps to aid or track your progress. It can also help to dangle the carrot and build in some rewards for when you get to the end of each month successfully. Tell friends and family what you are working on and celebrate your successes with them.

By the end of the year, you can look back with satisfaction at each little milestone as a personal win and you’ll have stepped towards, and finally reached an overall goal that may have seemed intimidating unless broken down into manageable chunks.

So what are you waiting for? Get out that calendar and pencil in a goal a month to reach your dreams this year.

i http://www.richardwiseman.com/quirkology/new/USA/Experiment_resolution.shtml

This article is intended as an information source only and to provide general information only. The comments, examples, words and extracts from legislation and other sources in this publication do not constitute legal advice, financial or tax advice and should not be relied upon as such. All readers should seek advice from a professional adviser regarding the application of any of the comments in this article to their particular situation.


Cyber security - protecting yourself at home

Cyber security - protecting yourself at home

Greater flexibility in working arrangements has been a by-product of the pandemic, as working from home has become more widespread. In fact, The Families in Australia Survey: Towards COVID Normal reported in November 2020 that two thirds of Aussies were working from home.

While this flexibility has many benefits, it does also bring downsides, such as the increase in cyber security risks. With working from home to continue to be a reality for many, as workplaces move to more flexible working arrangements, here’s what we can do to stay safe.

Why cyber security is of greater risk at home

According to the ACSC Annual Cyber Threat Report 2020-21, there was an increase in the average severity and impact of reported cyber security incidents, with nearly half categorised as substantial. And there were over 67,500 cybercrime reports, an increase of nearly 13% from the previous financial year.

Not only are cyber security attacks impactful to the individual, but they also take a toll on businesses. The Australian Cyber Security Centre (ACSC) found that the total estimated cost of cyber security incidents to Australian businesses is $29 billion per year.i

With so many Australians working from home, it’s no coincidence that the rates of cyber security attacks are on the rise. When we work from home, we are no longer protected by a closed office network, so we are at greater risk of cyber security threats.

Given we tend to be working alone at home, this also makes us more vulnerable to scams and phishing attempts. Click on a suspect email in the office, and it’s either caught before it gets to you or you can ask a co-worker if they have received the same. With fewer opportunities for water cooler chat, you are more likely to be out of the loop.

How to stay safe

There are various ways you can protect yourself from cyber-attacks, and you don’t need to be an IT whiz to do so.

Install antivirus and security software
Your first layer of protection should be the use of antivirus and security software, such as Norton or Bitdefender. If you already have this software installed, ensure that it is up to date.

Update software, including all security updates
You also want to stay up to date with your software, so don’t skip those security updates that appear on your computer and phone. You can turn on automatic updates, so you don’t have to worry about missing these.

Secure your home Wi-Fi
As well as having a secure password for your home Wi-Fi, you should also use a strong encryption protocol for your router (currently WPA2 is the most secure type of encryption) – you can check this through your device settings.

Review and update your passwords
If you have had the same password for years and don’t have variations for different purposes, it’s worth updating your passwords. It sounds obvious, but don’t choose a password that will be easy to guess, such as something relating to your street name or workplace.

Opt for multi-factor authentication
Multi-factor authentication provides an extra layer of security when it comes to accessing your devices, making them harder to hack into. An example of multi-factor authentication is the combined use of a secure password, an item such as a security key or token, and a validation such as a SMS or email.

Be aware of scams
Scamwatch.gov.au is regularly updated with the latest scams. Run by the ACCC, this website contains comprehensive and current information on scam attempts such as phishing and extortion. Share this info with family and friends so they also know what to be on the alert for.

Consult with your IT Department
If your workplace has an IT Department, contact them to ask for any additional tips on how you can stay secure working from home.

i https://www.cyber.gov.au/acsc/view-all-content/news/announcing-acsc-small-business-survey-report

This article is intended as an information source only and to provide general information only. The comments, examples, words and extracts from legislation and other sources in this publication do not constitute legal advice, financial or tax advice and should not be relied upon as such. All readers should seek advice from a professional adviser regarding the application of any of the comments in this article to their particular situation.


How retirees can release equity on their homes to cash flow

How retirees can release equity on their homes to cash flow

Asset rich and income poor is the dilemma faced by many retirees. But there may be opportunities to boost your income in retirement by tapping into your biggest asset – your home.

With property prices booming, many retirees are finding that the home they have lived in for decades is worth a small fortune, but for various reasons they don’t wish to sell or downsize.

What many may not realise is that you can have your cake and eat it too. Or, in this case, convert part of the value of your home into an income stream while you remain living there.

The ability to borrow against the equity in your home without having to repay until you move out or sell comes in various guises, but the result is largely the same – an enhanced lifestyle in retirement. The extra income may allow you to enjoy some little luxuries, travel more, or pay for home improvements.

There are four key types of product on offer:

  • Reverse mortgage
  • Home reversion
  • Equity release agreement
  • The government’s Pension Loans Scheme (PLS).i

None of these strategies should be adopted without careful consideration as they may have an impact on your family, your beneficiaries and - with the exception of the PLS - your Age Pension if you receive one.

As a result, we recommend you speak to us first to discuss whether accessing some of your home equity would be appropriate for you.

This is how these products work:

1. Reverse mortgage

A reverse mortgage lets you borrow money against the value of your home and take it as an income stream, a line of credit, a lump sum or a combination.

The amount you borrow is often determined by age. At 60 you can generally borrow 15-20 per cent of the value of your home. This percentage increases by 1 per cent a year.ii

The interest accrues and is paid when you sell, either on entering an aged care facility or from your estate when you die. The interest rate is usually higher than the standard mortgage rate, but you don’t have to make repayments along the way. Since 2012, reverse mortgages must come with a negative equity guarantee. This ensures you can never end up owing more than your home is worth.

2. Home reversion

Here you sell a percentage of the future value of your property at a reduced rate. It is not a loan, so there is no interest payable. However, there are immediate costs such as a property valuation and an upfront fee. And there is also the cost of losing the full benefit of your home’s increase in value over time. The more your home’s value increases, the more the provider will receive.

3. Equity release scheme

This third option lets you sell a percentage of the value of your home in return for a lump sum or an income stream. You pay fees which are periodically deducted from the remaining equity in your home, so your share diminishes over time.ii

4. Pension Loans Scheme

The Federal Government’s loan scheme is offered through Services Australia and the Department of Veterans Affairs.

You can access a voluntary non-taxable fortnightly loan up to 150 per cent of the maximum Age Pension rate to bolster your retirement income with the loan secured against your home. You don’t need to be on the Age Pension to qualify but even if you are, this government loan does not impact your pension entitlements.iv

Your mortgage increases by the payment amount plus interest which currently stands at 4.5 per cent a year. As with the other schemes, you don’t need to repay the loan until you move out or sell. And if your circumstances change, you can adjust the loan accordingly such as pausing payments.

All four options are variations on a theme of providing a better lifestyle in retirement.

If you want to find out if any of these options might play a role in your retirement income strategy, don’t hesitate to call us to discuss.

Case study

Self-funded retirees Frank (75) and Mary (73) were struggling to maintain their lifestyle after no longer qualifying for the Age Pension. By borrowing $400 a fortnight against their $390,000 home from the government’s Pension Loans Scheme, they would still own 72 per cent of their property after 10 years and 41 per cent after 20 years. In the meantime, they can enjoy a few extra luxuries in life while remaining in their home. v

i https://moneysmart.gov.au/retirement-income/reverse-mortgage-and-home-equity-release

ii https://www.ratecity.com.au/home-loans/articles/maximum-amount-borrow-reverse-mortgage

iii https://moneysmart.gov.au/retirement-income/reverse-mortgage-and-home-equity-release

iv https://www.pensionboost.com.au/faqs

v https://www.pensionboost.com.au/pension-loan-scheme

This article is intended as an information source only and to provide general information only. The comments, examples, words and extracts from legislation and other sources in this publication do not constitute legal advice, financial or tax advice and should not be relied upon as such. All readers should seek advice from a professional adviser regarding the application of any of the comments in this article to their particular situation.


How to develop resilience for hard times - financial, or otherwise

How to develop resilience for hard times - financial, or otherwise

Resilience is increasingly in the spotlight these days when it comes to desirable personal qualities. In many ways it trumps intelligence. People who have it are better at handling setbacks, navigating obstacles and weathering hard times - financial, emotional, or otherwise. The good news is that resilience is like a muscle. You can easily strengthen it through training. We take a closer look…

Resilience is not a quality we’re born with. It usually starts to develop early in childhood and with practice, can continue to develop as we get older.

Australia has encountered some catastrophic events in recent years – the ongoing drought, the country in and out of lockdowns (as a result of COVID-19), bushfires, followed by floods, and then the mouse plague – we’ve seen it all.

When situations like this occur, it brings so much uncertainty as we’re not sure what’s going to happen in the future, and this is where we can appreciate how strong and capable we are by being resilient.

What is resilience and why is it important?

Resilience, in a nutshell, is the ability to be able to cope with certain challenges, overcome obstacles and recover quickly when a stressful situation arises.

The reason being resilient is so important is because it allows you to look at each obstacle you are presented with, take a step back, process the situation, and gain some perspective. This enables you to recognise and understand that you are able to overcome certain situations and life will continue to go on when certain challenges are thrown your way – no matter how big or small.

Preparing yourself for these types of situations not only continues to build on and strengthen your resilience, but can also improve your overall health and wellbeing.

How can you strengthen your resilience muscle?

There will be times when life is running smoothly and then you’re thrown a massive curveball - this is where your resilience muscle will kick in.

How you view adversity and stress is critical, as this will have a major impact on how you react and cope with disruptions in life. It also sets the tone for how quickly you bounce back and recover from these situations.

Here are a few strategies that can help you strengthen your resilience:

  • Foster a positive mindset – negative thoughts can impact how you react to stressful situations
  • Exercise – daily exercise releases endorphins and increases serotonin which has a positive effect on your mood
  • Personal control – spend time focusing on what you can control and set goals
  • Talk to friends and family – sharing your problems can help ease the burden and they can always provide some advice that may help you
  • Keep a journal – writing down your feelings can be a good way to express yourself and de-stress if you don’t want to share your feelings with others
  • Learn from your mistakes – making mistakes is a part of everyday life and drawing on past mistakes can help you to reassess decisions you make in the future

Resilience in the truest sense

Whilst Australia has experienced some of the worst disasters with bushfires and floods in recent years, it's also brought out the best in most and shown that overall Australian’s are a resilient bunch.

Farmers in rural and remote areas across the country suffered greatly due to the drought, and like many businesses in the city during the COVID-19 outbreak, farmers and their families had to ‘pivot’ and look for other opportunities to earn money.

This is when the ‘Buy From The Bush' campaign was developed. It’s a great initiative where gifts, homewares, and arts and collectables amongst other things can be purchased online, which helps small businesses in rural areas that are struggling financially throughout this period.

Throughout this period, it showed us that in the face of adversity resilience is a vital skill for us all and having the support around you is key when faced with difficult challenges.

Focus on a positive mindset

Remember, having a positive mindset helps us achieve a better outlook on life, we smile more, we laugh more, and we try to resolve things more simply.

Two quotes come to mind when it comes to a positive outlook – you must keep in mind ‘there is always light at the end of the tunnel’ and ‘always look on the bright side of life’.

Most importantly, we must remind ourselves that challenging times won’t last forever.

This article is intended as an information source only and to provide general information only. The comments, examples, words and extracts from legislation and other sources in this publication do not constitute legal advice, financial or tax advice and should not be relied upon as such. All readers should seek advice from a professional adviser regarding the application of any of the comments in this article to their particular situation.


Not feeling yourself? You could be languishing

Not feeling yourself? You could be languishing

Feeling a bit lacklustre as the days roll by? Hitting the snooze button more than usual? It’s a feeling that can be difficult to put your finger on, but it has a name, languishing.

Whether it’s feeling exhausted and unmotivated, or restless and eager to do more, we can be off kilter from time to time. It’s no surprise that many are feeling this way, as we continue to deal with ongoing uncertainty and snap lockdowns due to the pandemic. Knowing this is normal is important, particularly in the current circumstances, but we can also make changes to improve our overall wellbeing.

Flourishing vs languishing

Often, we think of good mental health as the absence of mental health issues, but as the diagram below shows, there is a spectrum between high mental health and low mental health.

While flourishing sits at the top, languishing is at the bottom.

Source: Dual continua model ( Keyes & Lopez , 2002)

You’re kicking goals at work, your relationships with family and friends are harmonious, you’re growing as a person – these are examples of flourishing. On the flipside, languishing can see you struggling to get out of bed in the morning, disengaged from your work, feeling negative about your relationships, or frustrated at not getting to where you want to be.

Called “the dominant emotion of 2021”, languishing has been described as if “you’re muddling through your days, looking at your life through a foggy windshield.”i

Moving towards flourishing

The pandemic has reminded us of how little control we have over external circumstances. While lockdowns are likely to remain in our near future and the way we work and socialise are impacted as a result, there are ways we can improve our outlook.

Take time out

Working from home and remote schooling has become a reality for many of us, meaning we are busier than ever. Scheduling in some time-out is crucial to being able to switch off and feel more refreshed. Even if it’s just a day spent not checking your email and doing something restorative, you’re prioritising self-care.

Start small

When you’re languishing, it can be difficult to get motivated, it’s not likely to be the time you embark on a new fitness regime, study or career move. However, starting small can make changes in your life while building motivation for you to make further changes.

Whether it is going for a morning walk each day, reading a book the whole way through or getting to one of those tasks on your to-do list, you’re taking a step towards flourishing.

Cut out the noise

Back-to-back Zoom calls, the 24/7 news cycle, pings of social media, the distraction of everyone being at home together – no wonder it’s hard to focus.

Tap into your ‘zone’ or flow, by switching off from external noise where possible to concentrate on one task at a time. When you’re in the state of flow, time flies by as you’re engrossed in an activity that takes your full attention.

Reach out for help

It’s also worth acknowledging when you need a helping hand. It may be delegating at work so you’re not feeling overloaded or having someone to talk to if you’re struggling through the day.

Mental health issues are on the rise due to the pandemic and there is no shame in asking for help – more than ever, Australians are reaching out for mental health support in these turbulent times to help stay on track.ii

i https://www.nytimes.com/2021/04/19/well/mind/covid-mental-health-languishing.html

ii https://www.lifeline.org.au/resources/news-and-media-releases/media-releases/

This article is intended as an information source only and to provide general information only. The comments, examples, words and extracts from legislation and other sources in this publication do not constitute legal advice, financial or tax advice and should not be relied upon as such. All readers should seek advice from a professional adviser regarding the application of any of the comments in this article to their particular situation.