Provision Newsletter

When it comes to superannuation, most funds offer a range of investment options.

If there’s one thing certain in life it’s change. And generally your attitude towards saving and investing will change as you get older.

How your super is invested when starting your first job may not be the right approach when you’re approaching retirement. Luckily you can change your investment options at any time and this could make a real difference to how much money you have when you retire.

There are usually several different investment options to choose from. If you haven’t selected an investment option, you’re probably invested in your fund’s default option, which will generally take a balanced approach to risk and return.

To get up to speed on your super investment options, we’ve answered three common questions: how your money is invested, the different options available, and how your stage of life may influence your preferences.

What do super funds do with my money?

Typically, no less than 9.5% of your before-tax salary (if you’re eligible) is paid into super, which is then taxed at a maximum of 15%. Your super fund will invest this money over the course of your working life, so you can hopefully retire comfortably.

Your super fund will let you choose from a range of investment options and generally the main difference will be the level of risk you’re willing to take to potentially generate higher returns.

If you’re not sure what you’re invested in, contact your super fund. You may also be able to see your current investment option by logging into your super fund’s online portal – this may also give you a current balance and other information such as your projected super savings over a lifetime.

What are the super investment options I can choose from?

Most super funds let you choose from a range, or mix of investment options and asset classes. These might include ‘growth’, ‘balanced’, ‘conservative’ and ‘cash’ but the terms can differ across super funds. Here’s a small sample of the typical type of investment options1 available:

• Growth options aim for higher returns over the long term, however losses can also be notable when markets aren’t performing. They typically invest around 85% in shares or property.

• Balanced options don’t tend to perform as well as growth options over the long term, but the loss is also less when there are market downturns. They typically invest around 70% in shares or property, with the rest in fixed interest and cash.

• Conservative options generally aim to reduce the risk of market volatility and therefore may generate lower returns. They typically invest around 30% in shares and property, with the rest in fixed interest and cash.

• Cash options aim to generate stable returns to safeguard the money you’ve accumulated. They typically invest 100% in deposits with Australian deposit-taking institutions, such as banks, building societies and credit unions.

Super funds may have different allocations, so it’s important to read your super fund’s product disclosure statement before making any decisions. It could be a good idea to consider factors such as your current stage in life, and future plans and goals before choosing the super investment option that’s right for you.

What’s the right investment option for me?

Choosing the most suitable investment option generally comes down to your goals for retirement, your attitude to risk and the time you have available to invest.

If you’re young, you may have more time to ride out market highs and lows, and therefore be willing to take on more risk in the hope of achieving higher returns.

If you’re closer to being able to access your super, you may prefer a conservative approach as a share market crash could be harder to recover from than if you’re 20 years away from retirement.

While many people put off thinking about super, being informed and engaged from a young age and throughout your career may make a big difference to the returns generated and your final super balance.

Adam Spencer explains more about this in the video below.

What is a lifecycle investment strategy?

https://www.youtube.com/watch?v=TdyA_2msX9g

If you need further assistance, speak to us on |PHONE| .

Source : AMP January 2020 

Important:
This information is provided by AMP Life Limited. It is general information only and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances and the relevant Product Disclosure Statement or Terms and Conditions, available by calling |PHONE|, before deciding what’s right for you.

All information in this article is subject to change without notice. Although the information is from sources considered reliable, AMP and our company do not guarantee that it is accurate or complete. You should not rely upon it and should seek professional advice before making any financial decision. Except where liability under any statute cannot be excluded, AMP and our company do not accept any liability for any resulting loss or damage of the reader or any other person.

Meltdowns in the street, vomit in the car and that dreaded statement of, “I’m bored,” continue to curse family holidays the world over. Travelling with kids is always going to be an adventure that’s split between magical moments and holiday hell. However, that’s never going to stop us from going, right? 

Next time you’re set to jet or drive off, take these top travel hacks with you. 

1. Slow things down 

No matter where you’re going on holiday, chances are you’ll need to double the estimated travel time when the kids are going too. While rushing around at home is often a normal part of everyday routine, this feeling amplifies to meltdown stage if it’s a plane, bus or train you’re rushing to catch. And, the person melting down is probably going to be you! 

The key is to slow everything down by leaving ample time, and then some, in the planning stage. Don’t book flights with quick connections or pay in advance for activities with rigid time restrictions. Leave plenty of time to get to the airport or station. Make sure everyone’s had a snack and gone to the bathroom before getting off a plane, to avoid dramas during long waits at customs or baggage claims. Want to be on the road by 9am to arrive at lunchtime? Leave for your road trip two hours earlier. 

2. Book a hotel for the kids

It could be tempting to book the kids into their own hotel after the twentieth ‘boredom’ tantrum of the day. Failing that, the next best thing is to book a hotel that suits the kids in the first place. When you’re researching, look a little further than the pool and a family room. 

Does the hotel offer a dedicated kids’ pool? A playground? Menus for children? Cot and stroller hire? Babysitting services? Kids clubs? The more facilities a hotel has for children, the better chances there are of other kids being there too. You know what that means? It’s back to lazing by the adult pool for you. 

3. Take packing seriously

What you pack, and often what you don’t pack, makes all the difference to your state of mind. First of all, what can you eliminate by buying or hiring it there? Strollers, car seats and cots are literally huge inconveniences, so relieve yourself of the responsibility if you can. 

Know that overpacking is a major cause of headaches on holidays, so write down a list of essentials and don’t be tempted by the ‘just in case’ items. You’ll want to throw them away when you’re carrying heavy bags and a toddler or two. 

When you’re in transit without suitcases, always check that you have everything you need for a day in a backpack, in case of luggage delays. It’s handy to gather a couple of brand new toys, activities or books to whip out in meltdown moments. There’s nothing like something new to holt a tantrum in its tracks (and no one on the planet will judge you for bribery on holidays).  

4. Gear up for adventure

Children lose their parents all the time, whether deliberately or not, so it’s best to prepare for the inevitable. If you’re visiting busy tourist attractions, deck the kids out in bright colours and write your phone number on a cool wristband they can wear. Don’t forget to take snacks, as they may not find anything they like there. Bandaids and antiseptic are always a good idea. 

Most importantly, to turn meltdowns into magical moments, pack your sense of humour and don’t stop expecting the unexpected.

Source: Clientcomm

This provides general information and hasn’t taken your circumstances into account. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

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With interest rates at historic lows and concerns regarding valuations of equity markets, retirees often wonder what is the right strategy to generate sustainable income for the longer term? In this podcast episode, we speak with Dermot Ryan, Co-Portfolio Manager at AMP Capital, to discuss this timely topic.

Author: Tim Keegan, Global Head of Marketing Digital & Innovation & Direct, Sydney, Australia

Source: AMP Capital 9 Dec 2019

Important notes: AMP Capital Funds Management Limited (ABN 15 159 557 721, AFSL 426455) (AMPCFM) is the responsible entity and the issuer of units in the AMP Capital Equity Income Generator (Fund). To invest in any the Fund, investors will need to obtain the current PDS from AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232 497) (AMP Capital). The PDS contains important information about investing in the Fund and it is important that investors read the PDS before making a decision about whether to acquire or continue to hold or dispose of units in the Fund. Neither AMP Capital, AMPCFM, nor any other company in the AMP Group guarantees the repayment of capital or the performance of any product or any particular rate of return referred to in this podcast. Past performance is not a reliable indicator of future performance. While every care has been taken in the preparation of this podcast, AMP Capital makes no representation or warranty as to the accuracy or completeness of any statement in it including without limitation, any forecasts. This podcast has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. Investors should, before making any investment decisions, consider the appropriateness of the information in this podcast, and seek professional advice, having regard to their objectives, financial situation and needs. This podcast is solely for the use of the party to whom it is provided and must not be provided to any other person or entity without the express written consent of AMP Capital. For more information on the fund, please click here.

There are several global events and themes on our radar for the remainder of 2019 and moving into 2020. Those who recognise the utility of bonds in a broader investment portfolio should take note of these broader conditions.

There have been strong gains for bonds in recent months, after a period of declines. An example from the Australian market is pictured below. Part of the reason for this could be that bond markets are responding to an anticipated global economic recovery.  

Source: Bloomberg, as at 30/9/2019

Here, we take a look at some key events on the global stage that impact fixed income markets.

Financial conditions

Policy easing has contributed to more supportive financial conditions worldwide, which is one to watch moving into 2020.

In fact, the monetary easing put into effect this year is one of the reasons our chief economist, Shane Oliver, holds some optimism about the global economy for the year to come.

That said, central banks are expected to remain dovish for a period, and in some cases, constrained in their ability to offer further support. The Reserve Bank in Australia, for example, has called on the federal government to introduce fiscal stimulus into the economy.

Growth on the global stage

Economic growth internationally is, as ever, one to watch. Broadly speaking, although monetary policy is set to have an impact, conditions are still soft and the risk of recession lingers.

Further, there are ongoing weak spots of note. For example, there is an increasing risk that trade-induced weaknesses in both Europe and Asia are becoming entrenched. Given time, this may begin to spill over into the United States.

In addition, core inflation has been suppressed, but looks set to be moving slowly higher if growth can rebound globally.

Trade tensions

The fixed income market is also not immune to the knock-on impacts of an event which has had a far-reaching impact on international economies since it began: the US-China trade war.

The political climate in the US, as it heads towards the federal election in 2020, could prompt a short-term breakthrough. US President Donald Trump will be under pressure to keep the economy stable, and progress on trade talks with China would be favourable for his campaign.

Nevertheless, the conflict remains a key risk to watch and monitor for impact.

In focus: the Australian market

No doubt, in a lower-for-longer environment, investors in the Australian market would be questioning the utility of a bond portfolio.

Source: AMP Capital Global Fixed Income team, 30/09/2019.

Granted, Australian bonds will not be able to provide the same defensive attributes that they have historically, given the multi decade falls in yield, but in a world of ever increasing negative yielding debt, Australian bonds continue to offer defensive characteristics. Australian bonds whilst offering a low yield, remain a triple AAA rated, liquid, defensive asset, that is attractive to many of its peers.

Author: Ilan Dekell, Head of Macro Sydney, Australia

Source: AMP Capital 5 Dec 2019

Important notes: While every care has been taken in the preparation of this article, AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232497) and AMP Capital Funds Management Limited (ABN 15 159 557 721, AFSL 426455) (AMP Capital) makes no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This article has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this article, and seek professional advice, having regard to the investor’s objectives, financial situation and needs. This article is solely for the use of the party to whom it is provided and must not be provided to any other person or entity without the express written consent of AMP Capital.

By the time we sit down for a sun-drenched lunch on Christmas Day, lounge rooms across the country are usually piled high with shreds of wrapping paper, screwed up gift tags and shattered plastic toys. Cue sunset and leftover prawns join soggy crackers, wilted salad and half-eaten lollies in the bin – all wrapped up on pictures of Santa in the plastic tablecloth. When you really think about it, that’s a whole lot of money thrown away as non-recyclable rubbish.

With a few simple tips, it’s possible to host a more eco-friendly Christmas that saves money and unnecessary waste, without skimping on festive cheer. 

1. Shop locally

Supporting local businesses helps to encourage a sustainable local economy. Best of all, you’ll often find eco-friendly, organic products in specialty stores that are unique and handmade with love. Before the big day, buy your fresh food from the farmers’ markets and stock up on homemade goodies – or make them – instead of packaged treats from the supermarket. 

2. Choose gifts that last

We’re all subject to that last-minute rush of buying gifts and the panic that comes with it. Plan a little earlier this year to avoid grabbing shiny things off the shelves to fill stockings. Instead, choose gifts that last or offer experiences. Consider items like houseplants, reusable coffee mugs, wooden games and puzzles or handmade gifts of food, natural beauty products and candles. Buy your loved ones tickets to a concert, lessons in a favourite hobby or make your own gift certificate for a service you’ll do for them. 

3. Rethink wrapping

Wrapping paper is one of the biggest sources of waste each year, so pop that sparkly new roll back down and consider other options. Start collecting reusable gift boxes, use festive scraps of old material, make brown recycled paper look fancy with your craft skills or wrap a gift inside another gift of a scarf or shirt. 

4. Decorate with nature

If you have toddlers, cats or even guests who’ve had one too many beers in the sun, plastic Christmas trees and fragile decorations may not survive to see the next one. Keep it green by sourcing a tree from sustainable forestry systems. Or, simply buy a potted shrub or tree with the aim to replant it after the celebrations. Use pine cones, frangipanis, nuts, fruit or twisty twigs for table displays. It’s amazing what you can find in the backyard when you look closely. 

5. Create a meal plan

There’s nothing worse than hosting a celebration and feeling like you won’t have enough food for everyone. But, seriously, has that ever happened on Christmas Day? To avoid wastage, write a list and allocate just one dish to each person or family, in categories so that everything’s covered but not repeated. That way, you won’t end up with five pavlovas.

6. Donate unwanted gifts

It’s hard to buy the perfect gift, and many of them end up in the back of the cupboard. Take the opportunity to give back by donating gifts to a charity or regifting them to someone who wants them (it’s not a social taboo, it’s a form of recycling!). 

Every little bit helps in the long run, towards a sustainable future. Plus, you’ll find there’s a lot less cleaning up and a lot more money left in your wallet heading into the new year. 

This provides general information and hasn’t taken your circumstances into account. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page. 

You’re so close. You were diligent in making additional contributions to your super when it made sense and have saved enough in your fund of choice. You have created a realistic retirement budget. You dream of more days at the beach, turning into a grey nomad, with none, zero, nada, office commitments.

To increase the odds that your retirement fantasy matches the reality consider these three simple questions:

Start with three simple questions:

• Have you got enough?
• Have you had enough?
• Do you have enough to do?

Assuming the answer is yes to all three then complete a few important steps before you bid farewell to work. Our pre-retirement checklist can guide you through this process.

As with longer-term retirement planning, this process need not eat up days of time. You should be able to complete most of it in an afternoon, or in small chunks spread out over several days.

Somewhere from two years to six months before your retirement morning tea or farewell drinks, schedule time to start ticking items off this list so that they don’t intrude on your days at the beach or with the grandkids.

1) Know how you plan to spend your time in retirement. The idea of not working appeals to many people, but some retirees miss being busy and socialising with others. To prepare for this possibility, check out possible part-time work or volunteer opportunities. Drop by the local community organisation, community garden or other social outlets. Look into taking a class or learning a new skill or finally expanding that passion/hobby to the next level. Make some plans to fill your days.

2) Go to the doctor for a checkup. Review your health insurance and match your health needs to your coverage.

3) Revisit your financial plan. Have you saved enough to fund your planned retirement lifestyle now it is much more in focus? Do you have an emergency fund? Does your asset allocation match your required return and risk tolerance?

4) Check whether you are eligible for the age pension or any other payments and services from the Australian Government. You can apply for the age pension three months before you plan to retire.

5) Review your super statements and look for lost or unclaimed super.

6) Create or make needed changes to your will, enduring power of attorney and advance health directive. Pay special attention to beneficiaries so that your money goes to the intended person.

7) Decide how and when you will access your super. You may access your super when you reach preservation age, which ranges from 55 to 60, depending on when you were born. You may take your super as a lump sum, a regular pension, or a combination of both. For more information on these decisions, you may want to read this guide from the Australian Securities & Investment Commission.

Following these steps can allow you to head into retirement with confidence and the necessary information to design the post-work life you desire.

Source: Vanguard Australia December 2019

Written by Robin Bowerman, Head of Corporate Affairs at Vanguard.

Reproduced with permission of Vanguard Investments Australia Ltd

Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) is the product issuer. We have not taken yours and your clients’ circumstances into account when preparing this material so it may not be applicable to the particular situation you are considering. You should consider your circumstances and our Product Disclosure Statement (PDS) or Prospectus before making any investment decision. You can access our PDS or Prospectus online or by calling us. This material was prepared in good faith and we accept no liability for any errors or omissions. Past performance is not an indication of future performance.

© 2019 Vanguard Investments Australia Ltd. All rights reserved.

Important:
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author.

Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.