The main event in our Avondale Seminar series for 2025 is our Annual Federal Budget Briefing which takes place next Friday (28th March) at the Parramatta Leagues Club.
The last few weeks have been a rollercoaster on the share markets both in Australia and globally, with ongoing tension between Russia-Ukraine and the Middle East, as well as the impact of a trade war due to American tariffs. With so much uncertainty around the global economic outlook, we are very blessed to have David Wilson, the Portfolio Manager for First Sentier’s Geared Share Fund, provide his insights into investment markets at our Budget event.
If you are yet to RSVP, there is still time to secure your spot! Please let us know by the 24th of March by calling our office on 02 7804 2833, or emailing admin@avondalewealth.com.au
Please see the following articles below:
1. At the start of March, Avondale Wealth held an Aged Care Seminar focused on the upcoming changes to the Aged Care system and Home Care Packages from 1 July 2025. If you were unable to attend, but would like our office to provide a copy of the presentation slides, please reach out.
2. As mentioned, the last 2 months has seen higher than usual volatility in markets both in Australia and abroad. With an upcoming Australian election in May, we have selected an article that summarises how historically, elections impact markets.
3. A commonly asked question from clients is how their superannuation savings and income streams will be taxed. The article below discusses the tax treatment of different forms of income for retirees.
If you wish to discuss any of the topics in these articles, feel free to reach out to us via phone call or email.
Federal Budget Briefing Event
Please see our Avondale Wealth Federal Budget Briefing invitation.
Avondale Wealth Aged Care Seminar
By popular demand, Avondale Wealth hosted an Aged Care Seminar on our premises on the 7th March 2025, followed by a light lunch. We would like to thank all of our clients that attended and supported this event.
Unfortunately, we reached capacity for this workshop and some of our clients missed out. We have already received requests to host more events like this in the future which we hope to roll out throughout this year.
Australia’s aged care system can be challenging, especially at what is often an emotionally difficult time for families. There are significant, long-term decisions to be made in a very short amount of time. Understanding the financial implications of these decisions is critical.
Avondale Wealth’s Aged Care Support services will help explain the options that are available, and how these will impact Centrelink entitlements, Aged Care costs, cash flow management and more. Both Chris Mcrae and Mark Chan are accredited Aged Care advisers and can provide our clients with the necessary guidance to navigate the complexities of aged care decisions, with confidence and clarity.
If you wish to discuss aged care advice with us, or would like us to email you the slides from this event, feel free to reach out to us.
How political events affect the markets
From the economy bending policies of Trump 2.0 to the growing strength of the far right in Europe, the new alliance between Russia and the United States, the wars in Ukraine and the Middle East, and the US President’s vow to upturn world trade rules, the markets are certainly navigating tricky times.
In recent months we’ve seen volatility in some areas but cautious optimism in others in a reflection of the hand-in-glove relationship between politics and markets.
Of course, economic policies, laws and regulations– think tax increases or decreases, new business regulations or even referendums – have a big effect on how investors allocate their portfolios and that impacts market performance.
In 2016, when the United Kingdom voted to leave the European Union, the UK pound plunged and more than US$2 trillion was wiped off global equity markets.i
In the following four years until Brexit was finally achieved in 2020, the FTSE 100 performed poorly compared to other markets as domestic and international investors looked elsewhere to avoid risk. While it has risen since a massive drop during the coronavirus pandemic, the exodus of companies from the London Stock Exchange continues with almost 90 departures in 2024.ii
Interest rate movements and any hint of political instability can also bring about a sell off or a rally in prices, with companies holding off on capital investment and causing economic growth to slow.iii
Global oil prices rose 30 per cent in 2022 when Russia invaded Ukraine causing European stock markets to plunge 4 per cent in a single day.iv Since then, oil prices have fluctuated and are now back to pre-war levels and gold has reached new heights as investors globally look for a safe haven from high geopolitical risks.
Do elections have an effect?
Elections, which almost always cause market disruptions during the uncertainty of the campaign period and shortly after the vote is known, have featured strongly in the past six months or so.
A review of 75 years of US market data has found that, while there may be outbursts of volatility in the lead up to the vote, there’s minimal impact on financial market performance in the medium to long term. The data shows that market returns are typically more dependent on economic and inflation trends rather than election results.v
Nonetheless, the noisy 2024 US Presidential campaign saw some ups and downs in markets during the Democrats’ upheaval and the switch to Kamala Harris as candidate. Donald Trump’s various policy announcements on taxes, immigration, government cost cutting and tariffs both buoyed and dismayed investors.
Analysis by Macquarie University researchers of the three days before and after election day found significant abnormal returns in US equities immediately after the vote.vi
But the surge was short-lived as investor sentiment fluctuated. Small cap equities with more domestic exposure experienced the highest returns while the energy sector also saw substantial gains, in anticipation of regulatory changes.
While currently the S&P500 and the Nasdaq have both gained overall since the election, there’s been extreme share price volatility.
How Australia has fared
Meanwhile, any impact on markets ahead of Australia’s upcoming federal election has so far been muted thanks to the volume of world events.
The on-again off-again US tariffs are causing more concern here for both policymakers and investors. Tariffs on our exports could mean higher prices and a drop in demand for our goods and services, leading to economic uncertainty.
In early February, the Australian share market took a dive immediately after President Trump’s announcement of tariffs on Mexico, Canada and China, wiping off around $50 billion from the ASX 200. They recovered slightly only to fall again later as the Reserve Bank cut interest rates. In the US, some tech companies delayed or cancelled their listing plans because of the volatility and uncertainty caused by the announcements.vii
Amid a turbulent start to 2025, most economists agree the markets are unlikely to hit last year’s 7.49 per cent achieved by the S&P ASX 200.
Reserve Bank of Australia governor Michele Bullock is similarly downbeat on the prospects for the year, saying uncertainty about the global outlook remains “significant”.viii
Please get in touch if you’re watching world events and wondering about the impact on your portfolio.
i Post-Brexit global equity loss of over $2 trillion worst ever -S&P
ii London Stock Exchange suffers biggest exodus since financial crisis
iii Policy Instability and the Risk-Return Trade-Off | St. Louis Fed
iv Why Financial Markets Are Sensitive to Political Uncertainty
v How Presidential Elections Affect the Stock Market | U.S. Bank
vi 2024 presidential election: U.S. equities surged, then retreated, after Trump’s victory
vii They’ve Been Waiting Years to Go Public. They’re Still Waiting. – The New York Times
viii Statement by the Reserve Bank Board: Monetary Policy Decision | Media Releases | RBA
Retirement income and tax
How much tax you pay on retirement income depends on your age and the type of income stream.
For most people, an income stream from superannuation will be tax-free from age 60.
How super income streams are taxed
Types of super income streams
Income from super can be an:
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account-based pension — a series of regular payments from your super money
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annuity — a fixed income for the rest of your life or a set period of time
What is taxable and what is tax-free
Part of your super money is taxable, made up of:
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employer contributions
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salary sacrificed contributions
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personal contributions claimed as tax deductions
Part is tax-free, made up of:
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after-tax contributions
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government co-contributions
If you’re age 60 or over
Your entire benefit from a taxed super fund (which most funds are) is tax-free.
If you’re age 55 to 59
Your income payment has two parts:
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taxable — taxed at your marginal tax rate less a 15% tax offset
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tax-free — you don’t pay anything more
If you’re age 55 or younger
You can usually only access your super if you experience permanent incapacity. If this happens, you’ll be taxed the same as people aged 55 to 59.
If accessing super for a different reason, such as severe financial hardship, your income payment has two parts:
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taxable — taxed at your marginal rate tax
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tax-free — you don’t pay anything more
Tax on other types of super funds
Defined benefit super fund
If you’re with a defined benefit super fund, you’ll get a statement from your fund before becoming eligible for your benefit (super money). This will tell you how much of your benefit is taxable and how much is tax-free.
Untaxed super fund
Some government super funds don’t pay regular tax on contributions. These are known as ‘untaxed funds’. If you’re a member of an untaxed fund, you pay tax when you access your money. Check with your fund to find out more.
Self-managed super fund (SMSF)
If you’re part of an SMSF, how you access your money depends on the ‘trust deed’ (rules).
Tax on transition to retirement income streams
With a transition to retirement (TTR) income stream, you can access your super while working. To get one of these pensions, you must have reached your preservation age (between 55 and 60).
You can take out up to 10% of the balance each financial year. You can’t withdraw it as a lump sum.
You pay the same amount of tax as on other super income streams, according to your age. Investment returns on TTR pensions are taxed at up to 15%, the same as a super accumulation fund.
Tax on non-super income streams
With an annuity bought with money from outside super, you get a fixed income for a set period of time. This pension income, less a deductible amount, is taxed at your marginal tax rate.
The deductible amount is the part of your original money (capital) coming back to you with each pension payment.
Get help if you need it
Find out more about tax on super on the Australian Taxation Office (ATO) website.
Services Australia’s Financial Information Service offers free seminars on topics such as retirement income and pension options – or feel free to contact us for more help.
Source:
Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at https://moneysmart.gov.au/retirement-income/retirement-income-and-tax
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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