Federal Budget 2024-25 Analysis
In this edition, we dive into how wills and powers of attorney actually work, how to protect yourself against financial scams, how to start planning for a successful retirement, and a video detailing the market movements in the April and May months.
If you are interested in discussing the topics raised in this month’s newsletter, please don’t hesitate to contact us.
In the meantime, we hope you enjoy the read.
All the best,
The Wealthy Me Team
A good estate plan will help make sure your wishes are carried out when you die. It can also help if you become unable to make your own decisions.
An estate plan records what you want done with your assets after your death. It can include documents such as:
It also covers how you want to be cared for — medically and financially — if you can no longer make your own decisions. This part of your estate plan may be in documents such as:
The documents you choose will depend on your situation and what you’re comfortable to trust others with. Get legal advice if you’re not sure.
You must be over 18 and mentally competent when you draw up your estate plan.
A will is a legal document stating what you want to happen to your assets when you die. It is part (but not all) of your estate plan.
Everyone over the age of 18 should have a will.
Your will can cover things like:
Smart Tip: It’s important to have an up to date will. If you die without one, the law decides who will get your assets — and this may not be who you wanted.
You can get your will written by a solicitor (for a fee) or by a Public Trustee.
A Public Trustee may not charge if you:
The rules vary, so visit the Public Trustee office website for your state.
Here are some low-cost alternatives to Public Trustees:
If you use an online will kit, get it checked by a solicitor or Public Trustee. They can make sure it’s been done properly. If your will isn’t done properly, it will be invalid.
Make sure you put your will in a safe place and tell someone close to you where it is.
It’s important to update your will as your situation changes — for example, if you:
A binding nomination directs who your super fund trustee gives your super benefit to when you die. If you don’t nominate someone, the super fund trustee will decide who your money goes to.
If you have a family trust, it continues after your death. The trust determines who gets your assets, even if your will says something different.
A testamentary trust is a trust that is written in your will. It takes effect when you die, and it’s administered by a trustee, who you usually name in your will.
The trustee looks after your assets until your beneficiaries can get them. This is set out in your will, and is either when:
You may want to consider setting up a trust if your beneficiaries:
Another reason to consider a trust is to avoid family assets being:
A power of attorney is a document where you give someone else the legal right to look after your affairs for you. It’s important to nominate someone that is trustworthy, financially responsible, and likely to be around when you need them.
Each state and territory have different rules for setting up a power of attorney.
There are different types of powers of attorney:
This allows someone to make financial and legal decisions for you. It’s usually for a specified time — for example, if you’re overseas and can’t manage your affairs at home.
If you become unable to make decisions yourself, a general power of attorney becomes invalid.
An enduring power of attorney (or EPA) allows someone to make financial and legal decisions for you. If you become unable to make decisions yourself, an enduring power of attorney will still be valid.
This allows someone to make medical decisions for you if you ever become unable to do so yourself. It doesn’t allow them to make other kinds of decisions.
It will help your family and your executor if you list all the documents you have and where they’re kept.
As well as the documents talked about above, other key documents to keep handy are:
Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at https://moneysmart.gov.au/living-in-retirement/wills-and-powers-of-attorney
Important note: This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person. Past performance is not a reliable guide to future returns.
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Scammers operate in an ever-evolving space and the scams of today are far more sophisticated than they have ever been, targeting even the most financially literate individuals.
In addition to the financial impact from a scam, it can affect your mental health as well as damage your reputation, so understanding how scammers operate is the best way protect yourself from falling victim.
The statistics provide a sobering reminder that no one is immune—no matter how experienced or cautious they may be – it can happen at the click of a button.
According to the Australian Competition and Consumer Commission’s (ACCC) Scamwatch, Australians lost an alarming $3.18 billion to scams last year.
The average individual loss from scams is significant, with individual losses rising by more than 50 per cent last year, to an average of almost $20,000.i This is due, in part, to scammers using new technology to lure and deceive victims and it underscores the serious financial toll scams can take.
Some of the most common scams include:
While these figures are shocking, they also reflect the changing nature of scams. Scammers are no longer relying on clumsy, obvious frauds. Instead, they are using highly professional methods, often tailored to the specific interests, financial knowledge, and behaviours of their targets.
As scammers become more creative, even the most experienced and financially literate individuals are at risk. There are several reasons why this is the case.
Sophistication: Scammers now use advanced technology and psychological manipulation to trick their victims. They impersonate respected brands and financial institutions, and they can craft highly convincing emails, websites, and phone calls that look indistinguishable from legitimate communications.
Cryptocurrency and new technologies: The rise of digital currencies and decentralised finance (DeFi) platforms has created new opportunities for scammers to exploit. These markets are largely unregulated, making them more vulnerable to exploitation by criminals.
Deepfakes: Scammers are increasingly using deepfake technology to make their fraudulent schemes more convincing and harder to detect. By creating hyper-realistic videos or audio recordings, they can impersonate trusted individuals, such as company executives, colleagues, or even loved ones, to manipulate victims to respond to requests for urgent assistance or money. This manipulation of digital media makes it much more difficult for victims to distinguish between what’s real and what’s fabricated.
Despite the growing sophistication of scammers, there are steps you can take to protect yourself. It’s crucial to stay alert and use a combination of scepticism, knowledge, and due diligence.
Be cautious when receiving unsolicited offers or requests, whether by phone, email, or social media. If you weren’t expecting to hear from a company or individual, don’t rush to react. Don’t click on links. Take a step back and verify the legitimacy of the contact by using an email or contact number that you locate online. Always verify account details this way before transferring any money.
Scammers are constantly evolving their tactics, so it’s crucial to stay informed. Regularly educate yourself on the latest scam trends and familiarize yourself with common warning signs. Agencies like Scamwatch provide ongoing updates and resources for identifying and reporting scams.
The evolving nature of financial scams means that it’s not enough to simply be cautious; you need to stay proactive. If you’re unsure whether an opportunity is a scam or simply want a second opinion on a financial matter, we’re here to help.
Source for all scam statistics in this article: https://www.scamwatch.gov.au/research-and-resources/scam-statistics
i https://www.scamwatch.gov.au/research-and-resources/scam-statistics
If retirement is just around the corner, the current financial climate may make you feel a little uneasy. Watching the markets fluctuate might leave you worrying about whether your superannuation will be enough to see you through.
It’s not a time for hasty moves, though.
If you are concerned a calm review of your current portfolio and investment strategy may be helpful.
After all, the average Australian spends around 20 years in retirement, so it’s important to create a retirement strategy that takes account not only the current market conditions but also the risks and opportunities in the years ahead.
As one of the most significant retirement assets, your superannuation needs a carefully considered assessment as you approach any new life stage.
Here are five useful tips to help ease you into the next chapter towards retirement.
Check your super portfolio’s risk profile. Generally speaking, investors take a high-growth approach when they’re younger to take advantage of higher returns, however, as with normal share market cycles, there will be fluctuations in the share market. Having a long-term strategy gives you the time to recover from any market downturns before retirement.
Older investors may prefer a more conservative investment strategy that can help to stabilise returns by potentially protecting super from share market volatility.
Be realistic about the living expenses you’ll need when you finish working. For some, it may cost less to live in retirement because of reduced expenses such as commuting costs and maintaining a work wardrobe.
On the other hand, you may plan to travel more or buy a new vehicle or renovate your home, so these expenses need to be factored in when working out how much you’ll need.
According to the Association of Superannuation Funds of Australia (ASFA), the annual average budget to maintain a comfortable lifestyle in retirement is $73,077 for a couple and $51,805 for a single person.i
And to maintain a modest lifestyle, ASFA estimates a couple will need $47,470 and a single person will need $32,897. Both estimates assume you already own your own home.
You can find easy-to-use tools on the MoneySmart website to help you work out your budget and also estimate your income from super and the Age Pension.
Entering retirement with manageable or small levels of debt can contribute to feeling more financial stable.
If you’ll still be repaying a mortgage after you’ve retired, you could consider downsizing your home or using superannuation funds to pay down the debt, keeping in mind the tax implications and ensuring that you comply with superannuation laws. If you’re considering either of these courses of action, we’d be happy to explain your options and obligations.
Understanding when and how you can access your super is important.
You can use your super to fund your retirement when you reach “preservation age”, which is from age 60. You can also use your super to begin a transition to retirement income stream (TRIS) while continuing to work.ii
Alternatively, if you continue working beyond preservation age, you can withdraw your super once you turn 65.
There are also some circumstances in which you can access your super early such as illness and financial hardship, however, eligibility requirements do apply.iii
You may be able to withdraw your super in a lump sum, if your fund allows it. This could be the entire amount you have invested, or you could receive regular payments.
If you ask your fund for regular payments (paid at least once a year), it is known as an income stream and your super account transitions from the accumulation phase – where contributions are made – to a pension.
There are minimum withdrawals that you must make once you commence an income stream from super. For example, for those aged under age 65, a minimum annual withdrawal of 4 per cent of your super balance is required and this drawdown rate increases as you get older.iv
There is a lot to think about as you approach retirement, so if you’d like to discuss your retirement income options, please give us a call.
i ASFA Retirement Standard, December 2024 – The ASFA Retirement Standard – ASFA
ii Super withdrawal options | Australian Taxation Office
iii When you can access your super early | Australian Taxation Office
iv Payments from super, April 2025 – Payments from super | Australian Taxation Office
Stay up to date with what’s happened in the Australian economy and markets over the past month.
The month of April was marked by economic uncertainty and global trade tensions that drove market declines and volatility.
These events are anticipated to influence the RBA’s cash rate decisions, as will the recent decline in core inflation to within the target range.
Click the video below to view our update.
Please get in touch if you’d like assistance with your personal financial situation.
