Fixed Interest
Morgans offers an extensive range of fixed interest products and services to help you achieve your investment objectives. Your adviser will help you incorporate fixed interest into your broader wealth management strategy.
Invest for income
Cash management accounts
Cash management accounts
Enjoy the convenience of our at-call cash facilities with competitive interest rates. Our preferred products offer direct bank deposits in your name with reputable Australian banks, providing easy access to your funds. Link your account to your share trading account for seamless settlements and have dividends and interest payments deposited directly. Your adviser will manage paperwork and transactional instructions, relieving you of administrative tasks.
Term deposits
Enhance your returns and build an income portfolio with our term deposit options. Held at reputable financial institutions, term deposits offer fixed terms and higher interest rates compared to at-call accounts. You can benefit from our preferential relationships with leading banks and Authorised Deposit-taking Institutions (ADIs) to find the best term and interest rate for your needs.
Morgans provides foreign currency term deposits with attractive rates for deposits exceeding AU$100,000, and flexible/structured term deposits, allowing you to combine floating and fixed interest rate payments based on your outlook on future interest rate levels.
Listed debt and hybrids
As a major participant in the Australian listed fixed interest securities market, we can offer you advice as well as a range of new investment opportunities from a range of Australia's largest banks and industrial companies.
Listed debt and hybrid investments deliver higher levels of income, paid regularly; some also offer the benefits of franking. Your adviser can build a tailored income portfolio for you, which unlike managed fund alternatives, can be constructed to take into account your specific objectives and risk profile.
Government and corporate bonds
A government bond is a debt obligation of the issuing government, signifying that when you invest in a government bond, you are essentially lending money to the issuing government. As a debt obligation, the issuer is obligated to make all contracted payments. Bonds, being wholesale debt securities, are traded by institutional investors and are not subject to a prospectus.
We offer a comprehensive Government bond investment service, including custody facilities. Bonds improve portfolio diversification and help reduce portfolio risk while providing stable income.
Exchange-traded Government bonds
Exchange-traded bonds on the ASX provide holders with access to bonds issued by the Australian Government providing a low-risk security and diversification for investment portfolios.
News & Insights
Australian’s life expectancies are increasing over time. We can now expect to live longer - on average 5 to 7 years longer - than our parents or grandparents did.
The problem is that as we live longer, we also need to support ourselves for longer in retirement. This is compounded by the fact that, according to the Australian Bureau of Statistics (ABS), we are retiring earlier these days with the average age of retirement reported to be 56.9 years. Interestingly, the average age people intend to retire is 65.4 years.
According to the ABS’s May 2024 report:
- There were 4.2 million retirees
- The average age at retirement (of all retirees) was 56.9 years
- 130,000 people retired in 2022, with an average age of 64.8 years
- The average age people intend to retire is 65.4 years
- Pension was the main source of income for most retirees
In their Media Release supporting their 2024 retirement report, ABS’s head of labour statistics, Bjorn Jarvis, said: “While the average age people intend to retire has risen over time, it hasn’t changed much in the last 10 years. This average has been between 65.0 and 65.6 years for close to a decade, since 2014-15. On average, men intend to retire slightly later than women, but this gap is closing. In 2022-23, there was around half a year difference between men and women, compared to a year difference a decade ago.”
Source: ABS
Income at retirement
According to the ABS retirement report, a government pension or allowance was still the main source of personal income at retirement for 43% of retirees. This was followed by Superannuation, an annuity or private pension at 27%.
Source: ABS
Factors influencing retirement
In 2022-23, the most common factors influencing older workers’ decision to retire was still financial security (36%) and personal health or physical abilities (22%). Around one in eight retirees (14%) said reaching the eligibility age for an age (or service) pension was a key factor.
Retirement planning
According to the ABS, 710,000 people intend to retire in the next 5 years, with 226,000 in the next 2 years. Will you be one of these people? If so, do you have the confidence your retirement plans will be enough to support you in retirement? Your Morgans adviser can review your retirement position and recommend strategies that will help you stay on track so that your retirement, when it happens, is an enjoyable stage of life. Already retired? We can help there too.
Contact your Morgans adviser today to schedule an aged care advice appointment. Our expert team will be able to simplify the aged care system, guide you through Government subsidies, analyse payment options, create 5-year cash flow projections, and model the benefits of home concessions and future asset values for your beneficiaries.
Following the release of the Aged Care Taskforce report earlier this year, the federal government has recommended a number of changes to the cost of residential aged care, some will commence from the beginning of 2025 and the remainder expected to commence from 1 July 2025.
Over the next 40 years, the number of people over 65 is expected to at least double and the number of people over 85 expected to triple. A significant amount needs to be invested in the Aged Care sector, by both government and private sector, to be able to manage the growing numbers of older people needing care and support in their later years.
From 1 January 2025:
- Increasing the refundable accommodation deposit (RAD) maximum amount without approval from $550,000 to $750,000. This amount will be indexed annually.
From 1 July 2025:
- Introduce a RAD retention amount of 2% pa to a maximum of 10% over 5 years.
- Removing the annual fee caps and increasing the lifetime fee caps to $130,000 or 4 years, whichever occurs first.
- Introducing a means-tested hotelling supplement of $12.55 per day which is to be indexed.
- Removing the means tested fee and replacing it with a means tested non-clinical care contribution (NCCC). The daily maximum is $101.16 which is to be indexed.
From 2029/30:
- The government is looking to commence a phase out RAD altogether by 2035. A commission will be established to independently review the sector in readiness.
Grandfathering arrangements will protect anyone who enters care prior to 1 July 2025 under the “no worse off” principle to ensure they do not pay more for their care.
Comparison of current and new aged care costs
Current aged care fees
The Basic Daily fee continues to be paid by all residents without change.
The Hotelling Supplement is paid by residents as a contribution towards their living costs. It is a means tested payment calculated at 7.8% of assets greater than $238k or 50% of income over $95,400 (or a combination of both). The Hotelling Supplement is capped at $12.55 per day (indexed).
The Non-Clinical Care Contribution (NCCC) replaces the current means tested fee. The NCCC is a contribution towards the cost of non-clinical care services which will be capped at $101.16 per day (indexed). It is a means tested fee calculated at 7.8% of assets over $501,981 or 50% of income over $131,279 (or a combination of both).
The lifetime cap for the NCCC is increasing to $130,000 or 4 years, whichever occurs first, indexed twice per year. There is no longer an annual cap.
Any contributions made under the home support program prior to entering residential aged care will count towards the NCCC cap.
Who will likely pay more from 1 July 2025?
It is expected that at least 50% of people entering care will pay more for their care each year.
The below chart illustrates the expected changes for regular care costs (excluding accommodation costs and retention amounts) for individuals based on specific asset levels:
Should you enter residential aged care before 1 July 2025?
It depends. For some people, if they have an ACAT assessment and are eligible to enter residential aged care, then it would be best to seek advice from your Morgans Adviser on both the current and future cost as well as cash flow and cost funding advice.
Contact your Morgans adviser today to schedule an aged care advice appointment. Our expert team will be able to simplify the aged care system, guide you through Government subsidies, analyse payment options, create 5-year cash flow projections, and model the benefits of home concessions and future asset values for your beneficiaries.
The year 2024 will arguably be known as the ‘cost of living crisis’ year. So many Australians are feeling the pain of this high inflation environment, particularly with everyday consumer items and mortgage stress. Unfortunately, our Chief Economist, Michael Knox, is not expecting an interest rate cut by the Reserve Bank of Australia until mid-2025.
As we enter production of this edition of Your Wealth, the proposed $3 million super tax – or Div 296 as it is known - faces an uncertain future. Will it be tabled in February when Parliament resumes? If an early election is called, it could effectively be off the table until after the election.
We hope it gets shelved completely. We have always viewed this as bad policy; in fact, the worst policy that has ever been proposed for superannuation.
This latest publication will cover Australian retirement intentions, the new Aged Care Act 2024, Trump's trade negotiations policy, expected to reduce tariffs, contribution strategies for older generations, and understanding the benefits of the Legacy Pension Amnesty which is now law.
Morgans clients receive exclusive insights such as access to our latest Your Wealth publication. Contact us today to begin your journey with Morgans.
