Happy New Financial Year!

When we think of “New Year” we think about the new Calendar year. In January we make plans for our resolutions – focusing usually on health, lifestyle, and re-evaluate where we are and where we want to be.

I suggest the New Financial Year is the perfect time to re-evaluate and rejuvenate Financial Health.  

Two key aspects I see as being crucial to consider when reviewing our financial health and broader financial strategies leading into and in retirement are Superannuation & Strategic Asset Allocation.

In last month’s column I spoke about how valuable and powerful Superannuation can be as a tool for maximising your wealth through the ability to generate tax free earnings, and pay tax free income into your pocket.  The New Financial Year resets what we can do with Superannuation. An increase to the maximum contributions which can be made into superannuation means we now have an opportunity to invest a larger portion of our wealth within the superannuation environment, and as a result, the opportunity to further maximise our retirement resources.

Another important aspect that should be considered as part of an overall Financial Health Check is your Strategic Asset Allocation (SAA). This refers to the process of allocating funds between different asset classes (i.e Australian Equities, International Equities, Property, Fixed Interest & Cash) to optimise an individual’s investment return objectives within your preferred risk tolerance. Each investor has individual investment objectives, balanced against risk tolerances which vary with age, financial resources, and retirement goals – therefore the most suitable allocation of capital will vary by the individual.  

SAA is perhaps the most important but overlooked aspect of wealth management, ranking among the most crucial investment decisions you can make when investing your retirement capital. Studies show that it accounts for up to 90% of long-term investing returns, and a suitable asset allocation can be the difference between having the lifestyle you always dreamed of in retirement, and having to cut costs to the bare minimum to get by.

The core focus of SAA is diversification - spreading your capital (and therefore exposure to risk) across different types of assets can smooth out fluctuating investment returns that occur throughout the typical economic cycle. This allows you to balance your long-term risk and return throughout your retirement.

At Morgans Port Macquarie, we have a disciplined risk management process which helps tailor your individual Strategic Asset Allocation to your personal investment objectives and risk tolerance.

If you are interested to learn about how we can assist you in Financial Year 2025 and beyond, our experienced team is always available and happy to answer any questions you may have.

Porsha Papas B.Com
Authorised Financial Planner 001270130
Morgans Port Macquarie

Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.

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Porsha Papas, Morgans Financial Adviser, suggests the New Financial Year is the perfect time to re-evaluate and rejuvenate Financial Health.
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