With divorce rates rising among couples aged 55+, more people could find themselves going it alone in retirement. We explore the pros and cons for your lifestyle and finances and speak to Dianne Kemp about her experience of planning for retirement after divorce.
The key points are as follow :
The financial impact of divorce
Retirement, then divorce
The pros and cons of independence
Making the most of a settlement
Navigating changes and opportunities
This article talks about :
Who pays what?
Rebates for private health insurance
What exactly is the lifetime health initiative?
Shane Oliver, Head of Investment Strategy and Chief Economist.
The attached note takes a look at the risk posed to the global and Australian economies from the spike in oil prices. Key points are as follows:
Oil prices have risen over the last few days reflecting drone attacks that impact 6% of world oil supply.
The choke point for global growth from higher oil prices is normally a doubling in prices. We are a long way from that just yet. Key to watch will be how long the supply disruption lasts, whether there are more attacks and retaliation from Saudi Arabia and the US.
A significant spike in Australian petrol prices would pose a further threat to consumer spending and growth in Australia, adding to pressure on the RBA to ease further.
The attached note takes a look at the 10 key messages to help investors steer their portfolios through volatile times. The key points are as follows:
Volatility is a normal part of long-term investing
Over the long term, equity risk is usually rewarded
Market corrections can create attractive opportunities
Avoid stopping and starting investments
The benefits of regular investing stack up
Diversification of investments helps to smooth returns
Invest in quality, dividend-paying stocks for regular income
Reinvest income to increase total returns
Don’t be swayed by sweeping sentiment
Active investment can be a very successful strategy
Shane Oliver, Head of Investment Strategy and Chief Economist.
The attached note takes a look at the outlook for the Australian residential property market. The key points are as follows:
The Australian housing market remains far more complicated than optimists & doomsters portray it to be.
Yes, it's expensive and heavily indebted but talk of mortgage stress is overstated & it's been undersupplied.
The combination of rate cuts, the election and a modest regulatory relaxation have helped turn property prices back up, but the upswing is likely to be constrained.
Money & Life bring you expert insights from Chris Morcom CFP®, Director of Hewison Private Wealth and Bernie O’Sullivan, Principal at Bernie O’Sullivan Lawyers on why an estate plan is so important and when you should make a start on yours.
Budgeting and savings might sound very basic, but many people find it difficult to get these fundamentals right, or don’t have these in place at all. Here are some tips to help you get started, and on the right track to building your personal wealth.
The key points are :
Have a plan
Learn to budget
Be smarter about your costs
Become more disciplined
Better manage your debts
Get advice
Dr Shane Oliver, Head of Investment Strategy and Economics and Chief Economist, AMP Capital.
The attached note looks at the risk of recession in Australia. The key points are as follows:
Australian growth is likely to remain weak over the next year. Expect further monetary & fiscal stimulus.
However, while the risks have gone up, recession remains unlikely: tax cuts should help growth in the current half year; the threat from falling property prices has receded; infrastructure spending is booming; the low $A is helping growth; the drag from falling mining investment is over; the current account is in surplus; there is scope for extra fiscal stimulus; population growth remains strong; and cyclical spending is low.
Dr Shane Oliver, Head of Investment Strategy and Economics and Chief Economist, AMP Capital.
This article talks about the negative rates, QE & other measures the RBA may deploy :
The key points are as follow :
The RBA is likely to first exhaust conventional easing by cutting the cash rate to 0.5% by year end before deploying unconventional measures beyond forward guidance which is already being used.
Unconventional monetary policy measures could help the economy, but negative interest rates are unlikely and quantitative easing would be most effective and fairest if combined with fiscal stimulus.
For investors it means low interest rates for even longer.
CommSec
Attached is Craig James’s economic update, taking into account Australia’s resilience through challenging times, giving a quick snapshot into how the Australian economy is currently tracking.
The presentation touches on:
Inflation, unemployment and interest rates
Spending, wages and prices
The gig economy
First home buyers market
Interest rates and the dollar
ASIC’s MoneySmart
An emergency fund (also known as a rainy day fund or savings buffer) gives you some breathing space to deal with life's ups and downs. You can use this money if something unexpected happens to you or your family, like your car needs major repairs, or you need to buy a new washing machine.
The key points are as follows:
What is an emergency fund?
Start small to build your savings
Automate your savings
Ways to save everyday
When to use your emergency fund
Money & Life
There are many resources available to help you talk about money with kids. And yet, the FPA’s Share the Dream report has found that many parents still find it challenging — they do not know how to talk to their children about money, what they should be saying, and when.
What’s more, our accelerated, invisible–money world is making it harder for children to grasp its value. Generation Alpha (children aged between 4 and 8) and Generation Zed (ages 9 to 18) are the first to be born into an always-on, multi-screen world that prizes instant gratification. Immersed in social media from an early age, their identity can easily become attached to brands and “buying stuff” long before they learn how their parents make ends meet.
According to our Share the Dream survey, nearly 65% of parents believe their children’s generation will be financially worse off than their own.
Having money conversations with your kids can make a positive difference to their financial future. But where to start? Attached is an ebook from Money & Life about navigating this tough conversation with your kids as they grow up.
Shane Oliver, AMP
After a third round of talks made little progress last week, the US/China trade war has escalated badly with tit for tat moves on an almost daily basis by each side. This has seen share markets fall sharply with US, global and Australian shares down about 5-6% from recent highs and safe haven assets like bonds and gold benefiting on the back of worries about the global growth outlook. This note looks at the key issues.
The key points are as follows:
The trade war between the US and China is escalating, posing a rising threat to global growth
Although we remain of the view that a deal will be reached, the risk has increased
Share markets may need to fall further in the short term to remind both sides of the need for a deal and get them talking again
However, we regard the fall in share markets as another correction rather than the start of a major bear market
Money & Life
The Australian Taxation Office (ATO) refunds billions of dollars to over three quarters of all taxpayers annually, but it takes a little effort to ensure you get as much tax back as you can. But while Australian taxpayers receive on average around $2,5001 in tax refunds annually, there’s no guarantee two people earning the same income, will receive the same tax refund.
The key points are as follow :
Getting your financial house in order
The key variables
Super, investment costs or other items
The past financial year saw a roller coaster ride for investors. Share markets plunged into Christmas only to rebound over the last six months. This note reviews the last financial year and takes a look at the investment outlook for 2019-20.
Key Points
2018-19 saw solid returns for diversified investors, helped by a sharp rise in share markets in the last six months & solid returns from most assets, except cash.
Key lessons for investors from the last financial year were to: turn down the noise around investment markets, maintain a well-diversified portfolio; and cash continues to provide low returns.
A pick-up in global growth, renewed monetary easing, an absence of significant economic excess globally and okay equity valuations should support returns over the year ahead. But they are likely to be constrained with bouts of volatility as the US trade conflict impacts and risk remains around the Australian property market.
Get ready, there are changes coming to superannuation on 1 July that’s likely to affect three million Aussies – are you one of them?
The chances are you will be, if either your employer or you haven’t contributed to your super account for the last 16 months or more. If that’s you, then the changes mean that any insurance cover currently in place within your inactive super accounts will be switched off. Put simply, you lose your insurance coverage.
Your available options:
If your super account is active and is regularly receiving contributions, either by you or your employer, then the good news is that your insurance won’t be affected by these changes. So, relax, there’s nothing to worry about. It’s business as usual.
If your super account has been inactive for 16 months or more, then you have two options:
You can choose to keep your insurance but you will need to contact your super fund before 1 July and let them know. Your fund will probably ask you to formalise your request by putting it in writing, either via completing a form on the fund’s website, responding to a text message or sending an email; or
Simply let your insurance cover lapse on your inactive super account. Once you’ve made this decision, you don’t have to do anything.
Do you need insurance?
Choosing whether to have insurance or not through your super is very much a personal decision. There are a number of factors you need to consider like:
how much debt do I have;
how do I service that debt due to illness, incapacity or death;
how much does my family need to maintain their lifestyle; and
what conditions are covered, or not, by the policies I am considering.
This article explains how to track down lost super, how to consolidate them and how to work out if you have enough super.
The key points are as follow :
How to search for lost super
How to check your super statement
Find out if you have enough super
This article explains what types of life insurance you can get through your super and the pros and cons of this type of insurance.
The key point are as follow ":
What types of life insurance are offered by super funds?
Why get life insurance through your super?
How to check the insurance you have through super
Claiming on insurance through super
Dr Shane Oliver
Head of Investment Strategy and Economics and Chief Economist, AMP Capital
For some time our view has been a less upbeat on the Australian economy than the consensus and notably the RBA. The reasons were simple. The housing cycle has turned down and this is weighing on consumer spending. And this is at a time when the risks to the global economy have increased as the trade war threat has ramped up again. All at a time when high levels of underemployment are keeping a lid on wages growth and, along with technology and competition, inflation
But the gloom around the Australian economy seems to have gone over the top lately with all the talk around rate cuts adding to the sense of malaise and more and more talk about a recession being inevitable. There must be some positives around. And there are! So, to inject some balance into the debate around Australia here is a list of positives. They are partly why we don’t see Australia as being about to plunge into recession.
The key points are as follows:
Australia’s current accounts deficit has collapsed
The Australian Dollar helps stabilise the economy
The drag from falling mining investment is over
There is scope for extra fiscal stimulus
Infrastructure spending is booming
Dr Shane Oliver
Head of Investment Strategy and Economics and Chief Economist, AMP Capital
While some have expressed surprise at the recent resilience in the value of the Australian dollar around the $US0.69-0.70 level despite weak Australian growth and Reserve Bank rate cuts, from a big picture sense it has already fallen a long way. It’s down 37% from a multi-decade high of $US1.10 in 2011 and it’s down 15% from a high in January last year of $US0.81. So, having met our long-held expectation for a fall to around or just below $US0.70 and given its recent resilience now is an appropriate time to take a look at its outlook.
The key points are as follows:
The Australian dollar likely faces more downside as Australian growth is weaker than US growth and the RBA is likely to cut more than the Fed. However, downside may be limited to around $US0.65 given that the $A has already had a large fall, short positions in the $A are large, the iron ore price remains high (for now) and the Fed is also heading towards rate cuts.
Given the downside risks for the $A and that being short the $A is a good hedge against threats to the global outlook it still makes sense for Australian investors to maintain a decent exposure to foreign currency via un-hedged global investments.