Is high Australian household wealth a source of support for consumers? Key points Australia ranked as having one of the lowest rates of disposable income growth per capita amongst OECD countries in mid 2023. An increasing income tax burden and mortgage repayments have weighed on income growth, despite solid wages and salaries. But, household balance sheets in Australia look stronger compared to incomes. Household wealth increased in 2023, as home prices rose. However, growth in household wealth will decline in 2024 as home prices are expected to fall. Household incomes will also be under pres ..read more

Many people continue, or even start, working once they’ve reached Age Pension age. This may be for social reasons, personal fulfilment or to maintain their standard of living. With the higher cost of living at the moment, even more pensioners are taking up work. But what does this mean if you’re receiving the Age Pension? The government’s Work Bonus means you can earn a little more without it affecting your pension. The permanent increase to the Work Bonus means you may be able to continue this longer if you choose. Consider this example, of Margaret, to show what this could mean for you. Intr ..read more

In the 2016 Federal Budget, the Government introduced the transfer balance cap as part of a broader superannuation reform package. The transfer balance cap imposes a lifetime limit on the amount of superannuation that can be transferred into a tax free retirement pension account. While it may appear straightforward, understanding its nuances is essential for effective retirement planning. What is it? The transfer balance cap places a restriction on the amount of superannuation savings that can be transferred into one or more retirement pension phase accounts. It is important to understand that ..read more

It’s a dilemma many of us face – are we better off directing extra money to our mortgage or super? As with most financial decisions, it’s not a one size fits all approach and here are some factors to consider in deciding what’s right for you. Key takeaways: There may be tax advantages when you contribute to super, especially if you salary sacrifice or you’re eligible to claim a tax deduction for personal super contributions. The power of compounding returns could mean that even small contributions to your super over many years could make the world of difference. By making extra mortgage repay ..read more

Key points Inflation is in retreat thanks to improved supply and cooling demand. A further fall is likely this year. Australian inflation remains relatively high – but this mainly reflects lags rather than a more inflation prone economy. Profit gouging or wages were not the cause of high inflation. The main risks relate to the conflict in the Middle East escalating and adding to supply costs; a surprise rebound in economic activity and sticky services inflation; and floods, the port dispute and poor productivity in Australia. Lower inflation should be positive for investors via lower interest ..read more

Economic and market overview A rally in the second half of the month helped global share markets generate solid gains in January, extending the rally from November and December. The latest indicators suggest economic conditions are holding up quite well in most regions, which augurs well for corporate earnings. With inflation still above central bank targets, investors pared back their expectations for interest rate cuts this year. At the beginning of January investors had been anticipating six rate cuts in the US this year, with the first expected in March. That timing now seems unlikely, wit ..read more

As scams continue to evolve, it’s important to stay on top of the latest information. Here are some tips for staying protected against some of the most common scams impacting Australians today and red flags to watch out for. What can you do to stay protected? Anyone can fall victim to a scam. As well as learning more about the different types of scams and how to spot them, start a conversation with family members or friends. You might know the red flags to watch out for, but do your loved ones? Raising awareness and educating yourself and others are important steps to help combat scams and eve ..read more

Setting up your SMSF is just the beginning. Make sure you’re aware of your obligations as an SMSF trustee and get the most out of your fund with this quick guide. While the list of SMSF administrative tasks and responsibilities may seem daunting, it’s there for a good reason: to ensure your fund’s decisions protect your retirement savings and provide financial security for your SMSF members in the future. If you need guidance with any of the following, your SMSF administrator, accountant or financial adviser will be able to help. Here are five tips that can help you build a foundation for mana ..read more

2023 saw the return of Goldilocks, but what’s in store for 2024 for investors? Key points The five key themes for 2023 were: better than feared growth; disinflation; peak interest rates (probably in Australia too); lots of geopolitical threats but not as bad as feared; and AI hit the big time. This boosted shares and helped bonds with solid superannuation fund returns. 2024 is likely to see positive returns helped by falling rates but they are likely to be more constrained given likely volatility associated with the high risk of a recession. Expect the RBA cash rate to fall to 3.6%, the ASX 2 ..read more

Introduction At the start of this year, we thought shares would have reasonable returns albeit it wouldn’t be smooth sailing given ongoing issues around inflation, interest rates, the risk of recession and geopolitics. So far so good. This note updates seven key charts we see as critical for the investment outlook. Chart 1 – global business conditions PMIs A big determinant of whether share markets can move higher or resume the bear market in US and global shares that started last year, will be whether major economies slide into recession and, if so, how deep that is. Our assessment is that th ..read more