As we advance into the 21st century, the concept of ageing is undergoing a transformation, largely thanks to a new generation of “oldies” who don’t feel old – and are reframing what it means to be getting on in years.

Traditionally, ageing has been associated with decline, frailty, and a sense of irrelevance. However, today’s generation is challenging societal norms and expectations while embracing a more vibrant and empowered perspective on life in later years.

A generational shift

Never a generation to just accept the way things are, Baby Boomers and even Gen X, laid the groundwork for what it means to live authentically. This is the generation that redefined adolescence, invented pop culture, challenged inequality, and protested when they saw things they wanted to change.

So, it’s no surprise that as they age, they’re also redefining what growing older looks like. The mantra “60 is the new 40” isn’t just a catchy phrase; it’s a way of life for many in this generation. They’re proving that age is merely a number and that it’s perfectly acceptable to keep living life to the fullest – no matter the decade.

Age is just a number – who’s counting?

Gone are the days when turning 60 felt like a one-way ticket to the rocking chair. Today, many who have had a few milestone birthdays are living life with the enthusiasm of a kid at an amusement park, and it’s reflected in improved longevity and better health outcomes.

Science says we all have a chronological age (the actual years on the clock) and a cognitive age (how old you feel). It’s been found that those who have a younger cognitive age have improved health, higher life satisfaction, greater activity levels, and more positive attitudes toward ageing than those who have an older cognitive age – regardless of their chronological ages.

Another study conducted an experiment with a group of elderly men – taking them back to where they lived in their youth and treating them as the young person they were back then. Compared to the control group, those who mentally went ‘back in time’ showed improved posture, dexterity and physical appearance. Even their vision improved.

Embracing longevity and vitality

It’s not just about your mindset though. One of the most significant shifts in how we view ageing is the increased focus on health and well-being along with the average life expectancy. As a society, our overall health is improving with the average life expectancy, which for males is 81.1 years and for females is 85.1 years.

Nowadays, staying healthy is not just about dodging the doctor; it’s about thriving! With an abundance of information on nutrition and fitness, today’s older adults are more informed than ever. Many are embracing a proactive approach to ageing, with lifestyle tweaks, focusing on mental health, mindfulness, and physical fitness.

Lifelong learning and personal growth

Education is another area where the perception of ageing is evolving. Gone are the days when education was seen as a one-and-done deal. Today, many individuals see learning as a lifelong journey and the availability of online courses, workshops, and community programs has made it easier for people to pursue new interests and skills at any age.

This focus on lifelong learning not only enriches individual lives but also has broader benefits. Older adults are increasingly pursuing new careers, starting businesses, or volunteering in their communities. They are leveraging their experiences to make meaningful contributions, proving that age does not limit one’s potential for achievement.

Challenging stereotypes and embracing authenticity

Despite these positive changes, ageism remains a significant societal issue. Stereotypes about ageing can limit opportunities for older adults and perpetuate harmful narratives. However, today’s generation is actively working to combat ageism and promote a more inclusive view.

One of the most exciting parts of this shift is the emphasis on individuality. Whether it’s starting a new trend, or speaking out about causes we care about, it’s about showing the world that ageing doesn’t mean fading into the background. Instead, it’s about standing out and living well.

None of us can hold back the years but this redefined perspective on aging encourages us to view our later years as a time for growth, exploration, and fulfillment. As society evolves, it’s crucial to support and amplify this message, ensuring that ageing is embraced as a vital and dynamic part of life and fostering a culture that values every stage of life.

Forget the rocking chairs; the golden oldies are here to live boldly, laugh heartily, and inspire others along the way.

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Thanks to the decisive victory of US President-elect Donald Trump, we’re now set to hear a whole lot more of his favourite word.

It’s something of a love affair. On the campaign trail in October, he said:

To me, the most beautiful word in the dictionary is tariff.

Previously, he’s matched such rhetoric with real policies. When he was last in office, Trump imposed a range of tariffs.

Now set to return to the White House, he wants tariffs of 10-20% on all imports to the US, and tariffs of 60% or more on those from China.

Most of us understand tariffs are some kind of barrier to trade between countries. But how exactly do they work? Who pays them – and what effects can they have on an economy?

What are tariffs?

An import tariff – sometimes called an import duty – is simply a tax on a good or service that is imported into a country. It’s collected by the government of the country importing the product.

How exactly does that work in practice?

Imagine Australia decided to impose a 10% tariff on all imported washing machines from South Korea.

If an Australian consumer or a business wanted to import a $1,200 washing machine from South Korea, they would have to pay the Australian government $120 when it entered the country.

So, everything else being equal, the final price an Australian consumer would end up paying for this washing machine is $1,320.

If a local industry or another country without the tariff could produce a competing good at a similar price, it would have a cost advantage.

Other trade barriers

Because tariffs make imports more expensive, economists refer to them as a trade barrier. They aren’t the only kind.

One other common non-tariff trade barrier is an import quota – a limit on how much of a particular good can be imported into a country.

Governments can also create other non-tariff barriers to trade.

These include administrative or regulatory requirements, such as customs forms, labelling requirements or safety standards that differ across countries.

What are the effects?

Tariffs can have two main effects.

First, they generate tax revenue for the government. This is a major reason why many countries have historically had tariff systems in place.

Borders and ports are natural places to record and regulate what flows into and out of a country. That makes them easy places to impose and enforce taxes.

Second, tariffs raise the cost of buying things produced in other countries. As such, they discourage this action and encourage alternatives, such as buying from domestic producers.

Protecting domestic workers and industries from foreign competition underlies the economic concept of “protectionism”.

The argument is that by making imports more expensive, tariffs will increase spending on domestically produced goods and services, leading to greater demand for domestic workers, and helping a country’s local industries grow.

Swapping producers isn’t always easy

Tariffs may increase the employment and wages of workers in import-competing industries. However, they can also impose costs, and create higher prices for consumers.

True, foreign producers trying to sell goods under a tariff may reduce their prices to remain competitive as exporters, but this only goes so far. At least some of the cost of any tariff imposed by a country will likely be passed on to consumers.

Simply switching to domestic manufacturers likely means paying more. After all, without tariffs, buyers were choosing foreign producers for a reason.

Because they make selling their products in the country less profitable, tariffs also cause some foreign producers to exit the market altogether, which reduces the variety of products available to consumers. Less foreign competition can also give domestic businesses the ability to charge even higher prices.

Lower productivity and risk of retaliation

At an economy-wide level, trade barriers such as tariffs can reduce overall productivity.

That’s because they encourage industries to shift away from producing things for which a country has a comparative advantage into areas where it is relatively inefficient.

They can also artificially keep smaller, less productive producers afloat, while shrinking the size of larger, more productive producers.

Foreign countries may also respond to the tariffs by retaliating and imposing tariffs of their own.

We saw this under Trump’s previous administration, which increased tariffs on about US$350 billion worth of Chinese products between 2018 and 2019.

Several analyses have examined the effects and found it was not foreign producers but domestic consumers – and especially businesses relying on imported goods – that paid the full price of the tariffs.

In addition, the tariffs introduced in 2018 and 2019 failed to increase US employment in the sectors they targeted, while the retaliatory tariffs they attracted reduced employment, mainly in agriculture.

Economists’ verdict

Tariffs can generate tax revenue and may increase employment and wages in some import-competing sectors. But they can also raise prices and may reduce employment and wages in exporting sectors.

Do the benefits outweigh the costs? Economists are nearly unanimous – and have been for centuries – that trade barriers have an overall negative effect on an economy.

However free trade does not benefit everyone, and tariffs are clearly enjoying a moment of political popularity. There are interesting times ahead.

Source: https://theconversation.com/what-are-tariffs-243356

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Deciding when to retire is a big decision and even more difficult if you are concerned about your retirement income.

The average age of Australia’s 4.2 million retirees is 56.9 years but many people leave it a little later to finish work with most intending to retire at just over 65 years.

If you’re not quite ready to retire, a ‘transition to retirement’ (TTR) strategy might work for you. It allows you to ease into retirement by:

• supplementing your income if you reduce your work hours, or
• boosting your super and save on tax while you keep working full time

The strategy allows you to access your super without having to fully retire and it is available to anyone 60 years or over who is still working.

Working less for similar income

The strategy involves moving part of your super balance into a special super fund account that provides an income stream. From this account you can withdraw funds of up to 10 per cent of your balance each year.

As you will still be earning an income and making concessional (before-tax) contributions to your super, this approach allows you to maintain income during the transition to full retirement while still increasing your super balance, as long as the contributions continue.

Note that, generally speaking, you can’t take your super benefits as a lump sum cash payment while you’re still working, you must take super benefits as regular payments. Although, there are some exceptions for special circumstances.

Take the example of Alisha. Alisha has just turned 60 and currently earns $50,000 a year before tax. She decides to ease into retirement by reducing her work to three days a week.

This means her income will drop to $30,000. Alisha transfers $155,000 of her super to a transition to retirement pension and withdraws $9,000 each year, tax-free. This replaces some of her lost pay.

Income received from your super fund under a TTR strategy is tax-free but note that it may affect any government benefits received by your or your partner.

Also, check on any life insurance cover you have under with your super fund in case a TTR strategy reduces or stops it.

Give your super a boost

For those planning to continue working full-time beyond age 60, a TTR strategy can be used to increase your income or to give your super a boost.

To make it work, you could consider increasing salary sacrifice contributions into your super then using a TTR income stream out of your super fund to replace the cash you’re missing from salary sacrificing.

In another example, Kyle is 60 and earns $100,000 a year. He intends to keep working full-time for at least another five years. Kyle transfers $200,000 from his super to an account-based pension so he can start a TTR strategy then salary sacrifices into his super.

This will reduce his income tax, but also his take-home pay. So, he tops up his income by withdrawing up to 10% of his TTR pension balance each year.

A TTR strategy tends to work better for those with a larger super balance, a higher marginal income tax rate and those who have not reached the cap on concessional contributions.

Nonetheless, it can still be useful for those with lower super balances and on lower incomes, but the benefits may not be as great.

Some things to think about

TTR won’t suit everyone. For example, be aware that you cannot withdraw more than 10 per cent of your super balance each year.

Also, if you start withdrawing your super early, you will have less money when you retire.

The rules for a TTR strategy can be complex, particularly if your employment situation changes or you have other complicated financial arrangements and investments. So, it’s important to seek professional advice to make sure it works for you and that you are making the most of its benefits.

If you would like to discuss your retirement income options, give us a call.

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Stay up to date with what’s happened in the Australian economy and markets over the past month.

Headline inflation eased more than expected during the last three months of 2024 – opening the door for the RBA to cut the cash rate.

While the release of China-based DeepSeek’s new cut-price AI model sent shockwaves through markets late in the month, they quickly recovered ground.

Click here for our February update video.

Please get in touch on 03 9723 0522 if you’d like assistance with your personal financial situation.

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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser, finance specialist, broker, and/or accountant before making decisions using this information.

The many unpredictable events of 2024 could easily have been disastrous for investment markets. Instead, we saw remarkable resilience and growth despite occasional volatility as investors reacted to the extraordinary times.

While economic growth in Australia and overseas was underwhelming, share markets rode out the ups and downs to finish 2024 strongly. 2024 was the ‘super election year’, when almost 2.5 billion people in 70 countries voted. One result that has captured the attention of governments and analysts around the world is Donald Trump’s return to office in the United States. He has promised massive tariffs, tax cuts and increased spending on defence. All measures are likely to increase inflation and budget deficits which will affect global markets and economies.

Continuing geopolitical upheaval also marked the year. Tension in the Middle East grew as Israel expanded its campaign and European Union economies came under increased pressure when Ukraine stopped the flow of Russian gas.

The US dollar ended the year on a two-year high but that, and a weakening Chinese Yuan, led to a two-year low for the Australian dollar, which ended the year just below 62 US cents.

Cost of living falls but interest rates steady

Around the world, interest rates fell during the year but in Australia, after five interest rate increases in 2023, the Reserve Bank (RBA) held steady at 4.35%, believing inflation is still too high.

Nonetheless, the cost of living has fallen significantly, down to 2.8% in the September quarter from a high of 7.8% two years ago and 3.8% in the June quarter.

Falls in electricity and petrol prices contributed to the easing.

Australia’s economy grew by 0.8% in the three quarters to the end of September – it’s slowest in decades.

House prices mixed across the country

The housing market appeared to cool by the end of the year with average national home values falling by 0.1% in December to a median of $815,000.

CoreLogic’s Home Value Index data shows four of the eight capitals recording a decline in values between July and December. These included Melbourne, Sydney, Hobart and Canberra. While in Perth, Brisbane, Adelaide and Darwin, home values increased.

Share markets survive and prosper

Global share markets were unsinkable in a year of stormy economic and political conditions.

The Nasdaq surged more than 30 per cent for the year. The S&P 500 was up 25% – pushed along by the ‘magnificent seven’ tech stocks – and the Dow rose 14%.

Although not quite in the same league, the ASX performed strongly, recording 24 new record highs during 2024. The S&P/ASX 200 closed the year at 8159, up 7.5%, with some analysts predicting 2025 will close around 8800.

Commodities

Gold came into its own as a safe haven for those concerned about events around the globe, reaching an all-time high in October and adding more than 28% for the year.

Oil prices were subdued with investors cautious about a glut, the risks of wider conflict in the Middle East, the war in Ukraine and the change of government in the US. Although there is some optimism for improved growth in China in 2025.

Iron ore prices have continued to decline, now down to about half of the peak US$200 a tonne in 2021.

Looking ahead

Economists’ forecasts vary on the timing of a cut in interest rates in 2025 but some believe there will be as many as four cuts, reducing the rate to 3.35% by year end.

Share price volatility is expected to continue as investors roll with the global political and economic punches and the upcoming Australian Federal Election is likely to introduce uncertainty until the results are in.

If you’d like to review your goals for the coming year in the light of recent and expected developments, don’t hesitate to get in touch.

Note: all share market figures are live prices as at 31 December 2023 and 2024 sourced from: https://tradingeconomics.com/stocks.

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There is no debate that Australians love investing in property. The value of Australian residential real estate at the end of August 2024 was an estimated $10.95 trillion.

Some love it so much that they believe property is a better option for providing a retirement income. They see a bricks and mortar investment as a more tangible and solid approach than say, superannuation, preferring to take their super as a lump sum on retirement to buy property. They may also choose to invest a windfall, such as an inheritance, or the proceeds from downsizing the family home, in property instead of their super.

So, given that a retired couple above age 65 needs an estimated yearly income $73,337 to lead a comfortable lifestyle, could a property investment do the job?

While it’s true that a sizeable property portfolio could deliver rental income to equal a super pension, it might mean missing out on some useful benefits.

After all, super is a retirement savings structure with significant tax advantages. It also has the flexibility to provide investments in a range of different asset classes, including property.

Meanwhile, super fund performance has, generally speaking, outstripped house price movements over the past decade. Super funds (invested in an all-growth category) returned an annual average of 9.1% during that time while average house prices in Australian capital cities grew 6.5% per year over the same period.

Not that past performance can give you any guarantees about what will happen in the future. Indeed, the average numbers smooth out the years of high returns and the years of negative returns. More important considerations in making an informed decision are your financial goals, your investment timeframe and how much risk you’re comfortable with.

Liquidity

One of the most significant differences between super and property investments is liquidity, or how quickly you can convert your investment to cash.

With super, assuming you’re eligible, funds can be accessed relatively easily and quickly. On the other hand, if your wealth is tied up in property it may take some time to sell or it may sell at a lower price.

Nonetheless, market cycles affect both property and super investments. They can be affected by volatile conditions and deliver negative returns just at the time you need access to a lump sum.

Long-term investing

Superannuation is designed for long-term growth, often spanning decades as you accumulate wealth over your working life. The magic of compounding interest can lead to substantial growth over time, depending on your investment options and the state of the market.

Property investments, on the other hand, can be invested for short, medium, and long-term growth depending on the suburb, the street, and the type of house you invest in. Of course, there are additional costs in buying a property (such as stamp duty) plus costs in selling (including capital gains tax). If there’s a mortgage over the property, you’ll need to factor in the additional costs of repayments and interest (bearing in mind that interest on investment properties is tax deductible).

Risk appetite

Investors’ attitudes towards risk also play a role in choosing between super and property.

Superannuation funds can be diversified across various asset classes, which helps to reduce risk. But property investments expose investors to a single market meaning that while there might be a big benefit from an upswing, any downturn may be a blow to a portfolio.

Making an informed choice

Ultimately, any decision between superannuation and property should align with individual financial goals, risk tolerance, and investment strategies. And, of course, it doesn’t need to be one or the other – many choose to rely on their super while also holding investment property so it’s best to understand how super and property can complement each other in a well-rounded retirement plan.

We’d be happy to help you analyse your retirement income strategy to develop a plan that works for you.

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