“Succession planning, and the tax risks associated with it, is our number one focus in 2025. In recent years we’ve observed an increase in reorganisations that appear to be connected to succession planning,” ATO Private Wealth Deputy Commissioner Louise Clarke The Australian Taxation Office (ATO) holds a view that wealthy babyboomer Australians, particularly those with successful family-controlled businesses, are planning and structuring to dispose of assets in a way in which the tax outcomes might not be in accord with the ATO’s expectations. If you are within the ATO’s Top 500 (Australia's largest and wealthiest private groups) or Next 5,000 (Australian residents who, together with their associates, control  a net wealth of over $50 million) programs, expect the ATO to be paying close attention to how money flows through the entities you control.  A critical issue for many business owners is how to effectively (and compliantly) benefit from a successful business. In many cases, the owners have spent years building the business and the business has become not only a substantial asset, but a lucrative source of income either through salary and wages, dividends, or through the sale of shares or assets. Generally, under tax law, you can legitimately structure assets if there is a good reason to do so - like for asset protection, but if you tip across the line and the only viable reason for a structure is to reduce tax, then you risk the ATO taking a very close look at your operations or worse, denying any tax benefits under the general anti-avoidance rules in Part IVA of the tax rules, designed to combat “blatant, artificial or contrived” tax avoidance activities. “We’re seeing that succession planning behaviour is primarily done by group heads who are approaching retirement. They typically own groups that family members are a part of, and wealth is transferred to the next generation to keep it within the family (via trusts and other means),” ATO Private Wealth Deputy Commissioner Louise Clarke said in a recent update. Key areas of concern include: Division 7A loans being settled. That is, a company has been paying money to a shareholder or an associate under a loan account. The ‘loan’ is quickly settled, often via a distribution, to remove it from the accounts. Assets moving around the group  (often the true value of an asset is not recognised raising the question, why the change if not to avoid capital gains tax on disposal or for some other benefit). Family member interests being restructured . Trust deeds being amended. A restructure is cited as a reason for late lodgement. Use of trusts Trusts are also a key area of concern in 2025. Where a trust which has made a family trust election (FTE) or interposed entity election (IEE) makes a distribution outside of the family group, a 47% Family Trust Distribution Tax applies (tax at the top marginal tax rate plus Medicare). In addition, the ATO has recently tightened its approach to trust tax returns for closely held trusts to ensure that trustee beneficiary (TB) statements are being completed. These are required when a trust makes a distribution of income or assets to the trustee of another trust, unless an exclusion applies. For example, a trust which has made an FTE or IEE doesn’t need to make a TB statement. The TB statement will then be used to cross reference against what the beneficiary has declared in its tax return. Where a valid TB statement is not made on time this can trigger a hefty 47% Trustee Beneficiary Non-Disclosure Tax. Reducing risk Where you or your family have control over multiple entities, particularly where the value of these entities is significant, it is important that the connections between these - be it in Australia or overseas - are looked at closely to avoid any nasty surprises or lost opportunities. Transferring control of your business may involve restructuring your business operations – changes to share structures, changes to the trustee and appointor of a trust, changes to partnership structures – or transferring assets to family members via the creation of trusts or other entities. All these events have legal and tax implications that need to be carefully considered. Contact Collins Hume in Ballina on 02 6686 3000 to assist you with your succession and tax planning.

In the fast-paced world of business, cash flow is one of the most critical factors in determining success. It’s more than just the movement of money in and out of your business—it’s a key indicator that directly impacts your business strategy. Whether you're a startup or an established company, understanding and managing cash flow effectively can be the difference between thriving and struggling. What is Cash Flow? Cash flow refers to the movement of money in and out of your business over a specific period. It includes revenue from sales, payments for expenses, loans, and any other financial transactions. Positive cash flow means that your business has more money coming in than going out, while negative cash flow signals that you're losing more than you're gaining. Cash Flow as a Strategic Asset Many business owners focus on profits and revenue as the primary drivers of success. However, cash flow is just as important, if not more so. Here’s why cash flow should be at the heart of your business strategy: 1. Facilitates Growth and Investment A healthy cash flow is vital for fuelling growth. Without a strong cash cushion, your ability to reinvest in the business—whether that’s hiring new staff, purchasing equipment, expanding marketing efforts, or exploring new markets—becomes limited. Cash flow allows you to act quickly and take advantage of opportunities as they arise. In short, cash flow directly impacts your ability to innovate, expand, and stay competitive. 2. Enables Smarter Decision-Making Strategic decisions require solid data. By closely monitoring your cash flow, you can make informed, data-driven decisions. For example, if you notice a dip in cash flow, you can address it immediately by cutting back on non-essential expenses or renegotiating terms with suppliers. Cash flow management provides you with the insights needed to make these kinds of strategic adjustments in real-time. 3. Improves Operational Efficiency Cash flow performance highlights inefficiencies within your business. Are you holding too much inventory? Are your payment terms too long? Identifying these areas through cash flow analysis helps streamline operations, eliminate waste, and improve profitability. When you manage cash flow with strategy, you ensure that every dollar spent or invested brings you closer to achieving your business goals. 4. Reduces Risk and Increases Resilience No business is immune to unexpected challenges—whether it’s an economic downturn, a sudden increase in operational costs, or a natural disaster. Healthy cash flow acts as a buffer during difficult times, helping your business stay resilient when cash inflows slow down. By incorporating cash flow management into your business strategy, you ensure that your company can weather storms and remain operational even when the market gets volatile. 5. Supports Long-Term Sustainability Short-term profits can be tempting, but true business sustainability relies on consistent cash flow. By focusing on long-term cash flow health, your company can invest in long-term growth without worrying about running out of funds. Cash flow enables businesses to pay off debt, manage operational costs, and reinvest profits to strengthen the company’s foundation. Integrating Cash Flow into Your Business Strategy To truly leverage cash flow as a strategic tool, here are some steps you can take: Monitor and Forecast Regularly: Make cash flow tracking a regular part of your business routine. Use software or financial tools to create cash flow forecasts that predict inflows and outflows over time. This will help you stay ahead of potential cash shortages or surpluses. Tighten Up Accounts Receivable: If you have outstanding invoices, focus on getting paid faster. Offering discounts for early payment or using automated invoicing can speed up the process. Negotiate Payment Terms: Review your payment terms with both customers and suppliers. Shortening the payment cycle with clients or extending terms with suppliers can improve cash flow timing. Control Expenses: Regularly audit your business expenses to identify areas where you can cut costs without compromising quality or service. Keeping overhead low while maximizing income is crucial for maintaining positive cash flow. Keep a Cash Buffer: Set aside a portion of your profits as a cash reserve. This buffer can be a lifesaver during slow months or economic downturns, ensuring your business stays afloat and can continue to operate without interruption. Cash flow is more than just a financial metric—it’s a strategic asset that enables your business to grow, innovate, and thrive. By integrating cash flow management into your business strategy, you can make smarter decisions, enhance operational efficiency, reduce risk, and build a foundation for long-term success. Don’t let cash flow be an afterthought. Make it a key part of your strategy and watch your business flourish even in the face of an unpredictable market. Cash is King – Book Now for Collins Hume's 6 May Business Event

MASK isn’t your average home fragrance brand. Their scents are nostalgic, fun and designed to spark positivity. Behind the scenes, Founder and CEO Jason Morrisby knew he needed more than great product-market fit for his start-up – he needed a financial structure that could protect assets, and support growth and sustainability. From Playful Fragrances to Serious Financial Priorities Building a profitable brand starts with getting the financial framework right and keeping it fresh Strategic business advice can make all the difference when scaling without external capital Working with advisors who understand your growth goals inside and out pays off in both cash flow and confidence. As a bootstrapped business with no outside capital, MASK’s biggest challenges weren’t product development or marketing – they were cash flow management and ensuring the right people and systems were in place. “For any brand, it's always people and money,” Jason said. “We were bootstrapped from the start, but paid attention to our cash flow so we have remained profitable and in control.” That’s where Collins Hume came in. A Full-Service Accounting Partnership That’s Personal From the outset, Collins Hume set up MASK with a solid business structure that included asset protection aligned to Jason’s long-term vision. The Collins Hume team worked with Jason to build a tailored business plan – one that not only mapped out growth initiatives, but also drilled into the numbers to help inform better cash flow decisions. Collins Hume’s 360-degree approach aligned closely with MASK’s own financial philosophy: focus on high gross margins, aim for a net profit of 20% and choose consumables to reduce ongoing customer acquisition costs. Jason has engaged Collins Hume for tax structuring and market expansion planning to regular bookkeeping and payroll support. The benefits of having such an indepth relationship has given Collins Hume a unique understanding of MASK as a business as well as Jason’s goals. “Having a reputable accountant is important,” Jason shared. “As a business owner time is important and, although it's wise to check P&Ls and financials, we can't do it all so it's reassuring that Collins Hume is helping us make key decisions that impact financial performance in the best way possible.” Results that Smell Like Success MASK has remained consistently profitable, agile and entirely self-funded. Their financial systems now support rapid product development and ongoing innovation, all while keeping their team and operations lean. Jason’s success story is proof that when a business owner has access to insightful and timely advice, anything is possible, especially when your brains trust is willing to go beyond compliance and act as a true strategic advisor. About MASK MASK is formerly a Sydney now Gold Coast-based home fragrance brand on a mission to spark positivity, delight and surprise. All their feel-good scents are proudly crafted in the Northern Rivers, where they’re just as passionate about creating local jobs as they are about creating uplifting fragrances. With an amazing team and a unique community vibe, MASK is all about delighting customers and doing business with heart. Discover more on their website  or follow along on Instagram  and Facebook . Learn How to Maximise Cash Flow in Your Business at Cash Is King Event 6 May Join Collins Hume for an exclusive event to uncover practical strategies to take control of your cash flow and set your business up for long-term lifestyle and financial success!

Rising costs? Tight cash flow? Working harder for less? If your business is keeping you up at night, you’re not alone — and we’ve got the event to help change that. Join Collins Hume for a focused, practical session designed to help you maximise cash flow and profitability through simple, strategic business manoeuvres. Event details Tuesday 6 May 2025 9:00–11:00AM Ramada Hotel & Suites Ballina Morning tea included Presented by Nathan McGrath , Senior Business Advisor (Collins Hume) together with renowned Australian Business Strategist, Mark Holton, this session is all about empowering business owners to take control of their financial future. Learn how small shifts in your business can deliver serious gains. Session highlights include: Being empowered to improve cash flow and profitability outcomes Unlocking major financial improvements through simple business adjustments The importance of cash in resilience-building and meeting the challenges of an unpredictable and volatile economy Previewing and understanding the financial impact of key business decisions. This hands-on session is ideal for business owners, managers and decision-makers. Spots are limited – bookings essential. Book via Eventbrite or call us on 02 6686 3000. We look forward to seeing you there!

Cash is King! Maximise Cash Flow for Business and Lifestyle Success BOOK NOW Collins Hume to host May event on cash flow and profitability strategies for your business Rising costs? Declining cash flow? Low margins? Long hours?  Is your business making you stressed and keeping you awake? Award-winning accounting and advisory firm Collins Hume is holding the business event of the year! Designed to help business owners and business leaders unlock major financial improvements through small, strategic changes. Event details 9-11AM on Tuesday 6 May 2025 Ramada Hotel & Suites Ballina Phone bookings on 02 6686 3000 or via Eventbrite » The session will be presented by Collins Hume Senior Business Advisor Nathan McGrath  together with renowned Business Strategist Mark Holton . “It’s all about empowering business owners to take control of their cash flow and profitability in ways that are simple yet incredibly effective,” says Nathan. “We’ll show attendees how to identify the triggers that drive performance and make subtle shifts in their operations that can deliver significant gains.” The event will explore the importance of cash flow in building resilience, especially in uncertain and volatile economic conditions. Attendees will gain practical tools and insights to see the financial impact of key business decisions before  they make them. “We’re bringing real-world examples and live case studies to the table so business owners can see how small operational changes can lead to big results,” Nathan added. This is not just theory – it’s actionable advice that can be applied immediately. “We know it works as our clients are achieving amazing results by working with us.” Highlights include: Being empowered to improve cash flow and profitability outcomes Unlocking major financial improvements through simple business adjustments The importance of cash in resilience-building and meeting the challenges of an unpredictable and volatile economy Previewing and understanding the financial impact of key business decisions. This hands-on session is ideal for business owners, managers and decision-makers looking to build more resilient and profitable operations. Numbers are limited — bookings essential. Morning tea included. Phone bookings can be made on 02 6686 3000. Read more at https://www.collinshume.com/360

Strategic Planning for Business Owners In today’s fast-paced business world, staying ahead requires more than just keeping up—it demands a proactive, strategic approach. Whether you're running a growing enterprise or an established business, regular strategic planning is essential to adapting to market shifts, capitalising on new opportunities and securing long-term success. Why Strategic Planning Matters Strategic planning isn’t just for large corporations—it’s a crucial tool for businesses of all sizes. By setting clear objectives and aligning your team with a well-defined roadmap, you create a focused direction that drives efficiency, innovation and profitability. One key to effective planning is flexibility. Markets evolve, customer needs shift and technology disrupts traditional ways of operating. A strategic plan that allows for adaptation ensures your business remains resilient and competitive. Setting Clear Goals for Sustainable Growth A successful business thrives on well-defined goals. Establish financial targets, operational benchmarks, and long-term objectives that reflect your vision. Whether it’s increasing revenue, expanding into new markets or enhancing customer experience, clarity in your goals enables informed decision-making. To set meaningful targets, ask yourself: What does success look like in the next 3-5 years? What key challenges are hindering growth? Where can we maximise efficiency and profitability? Conducting a SWOT Analysis Understanding your business’s Strengths, Weaknesses, Opportunities, and Threats (SWOT) is fundamental to strategic decision-making. By assessing these areas, you can pinpoint areas for improvement while leveraging competitive advantages. Involving key stakeholders—employees, partners, and even clients—can provide valuable insights that shape your strategy. An external perspective often reveals hidden growth opportunities or potential risks. Seizing Growth Opportunities Strategic planning helps business owners recognise new revenue streams and innovative solutions. Whether it's launching new products, expanding into different regions  or adopting technology to streamline operations, identifying these opportunities early can set you apart from competitors. Keep an eye on industry trends, evolving consumer behaviours and technological advancements. Regular market research ensures your business is positioned to capitalise on emerging opportunities before competitors do. Engaging Your Team in the Strategy A strategic plan shouldn’t sit in a desk drawer—it should be a living, breathing document that aligns your entire team. Engaging employees in the planning process fosters a sense of ownership, motivation and accountability. Encourage open discussions about company goals, challenges and growth strategies. A well-informed and aligned workforce is more productive and committed to achieving strategic objectives. Five Pillars of a Strong Strategy To build a robust business strategy, focus on these five key areas: Financial Management – Monitor cash flow , profitability and investments to sustain growth People – Attract, retain and develop top talent to drive business success Processes – Optimise operations for efficiency and scalability Customers – Strengthen relationships and enhance customer satisfaction Services or Products – Continuously innovate and refine offerings to meet market demand.   By aligning these pillars, you create a strong foundation for sustainable success. Achieving Long-Term Success Strategic planning isn’t a one-time exercise—it’s an ongoing process that keeps your business adaptable and forward-focused. Regular reviews, market analysis and stakeholder feedback ensure your strategy evolves with the changing landscape. By prioritising strategic planning, you position your business for resilience, profitability and long-term success. Start today by assessing your current strategy and identifying the next steps toward your growth goals. Elevate your business to new heights! By partnering with Strategy360 , gain clarity and control over your operations, improve profitability, increase business value and secure a sustainable future for your business. Contact  Nathan McGrath  on  02 6686 3000  for an obligation-free discussion on how Collins Hume can help you tailor a program to suit your requirements.

Show Me The Money The Government’s big moment in the 2025-26 Federal Budget was the personal income tax cuts. Income tax cuts are a dazzling headline but in reality deliver a tax saving of up to $268 in the 2026-27 year, with a tax saving of up to $536 from the 2027-28 year. At the same time, the Australian Taxation Office has been allocated almost $1bn in funding to extend and enhance its compliance programs. Two previously announced measures of note that have not passed Parliament but remain in the Budget are: Tax on super accounts above $3m (a 30% tax on future earnings for super balances above $3m). The $20,000 instant asset write-off for small business for 2024-25. Both measures have stalled in Parliament and, assuming they are not approved in the final days of Parliament, will lapse when an election is called. Budget 2025-26 is a budget for voter appeal with over $7bn in additional spending measures in 2025-26 and over $20bn across five years. Most measures extend previously announced and Budgeted items for another year. Key initiatives include: Energy $180bn to deliver a $150 energy bill rebate extension until the end of 2025. Healthcare $8.5bn on Medicare for increases to Medicare payments, 50 new urgent care clinics, and a bulk billed GP service. $1.8bn over 5 years for cheaper medicines on the Pharmaceutical Benefits Scheme. $240m for women’s health Education $500m to provide a 20% cut to HECS-HELP debt for students, and a realignment of the repayment schedule to reduce the amount required to be paid (from 1 July 2025). Housing $800m to expand the ‘Help to Buy’ scheme reducing the size of the deposit required to buy a home by co-buying with the Government. Families Three days of subsidised childcare for families with young children (income tested) from 1 January 2026 replacing the Child Care Subsidy activity test.   Economically, trade tensions have magnified global uncertainty. Global growth is already subdued. The indirect effect of tariffs is estimated to be nearly four times as large as the direct effect on Australia, reflecting the relative importance of affected trade flows between Australia, China, and the United States.   Australia’s economy is expected to grow, albeit slowly at 2.25% in 2025-26 and 2.5% in 2026-27. The Budget will be in deficit at -$42.1bn in 2025-26, before improving marginally but remaining in the red.   The Collins Hume team are available to assist you to capitalise on any of the Budget measures or minimise your risk. As always, the detail is important so please let us know if we can assist.

Running a business often feels like juggling dozens of tasks at once! The good news is that a few focused tweaks can streamline your operations and set the stage for growth. Here are 10 practical tips to help improve your operations and drive your business forward: Set Clear Goals and Plan Ahead  – Have a clear vision of what you want to achieve. Outline a few realistic goals and create a simple plan as your roadmap to guide decisions. Stay on Top of Your Finances  – Keep a close eye on cash flow and expenses with a regularly updated budget. Knowing where your money is going helps you avoid surprises and make smarter spending decisions. Streamline Your Operations  – Look for ways to make daily processes more efficient. For example, organise your workspace or use software to automate repetitive tasks. Simplifying how you work saves time and reduces stress for everyone. Embrace Technology  – Don’t shy away from tools that save time or improve customer experience. The right technology can automate manual work and free you up to focus on growing the business. Delight Your Customers  – Happy customers are the lifeblood of your business. Make service a priority: respond quickly, fix problems, and ask for feedback. When customers feel valued, they’ll return and refer others, fueling your growth. Invest in Your Team  – Build a strong team by hiring people who share your vision and giving them the support they need to excel. Learn to delegate instead of doing everything yourself — trusting your team frees up your time and empowers them to contribute more. Market Smartly  – You don’t need a huge budget to market effectively. Focus on channels where your customers spend time, like social media, local events, or email newsletters. Make sure you have an online presence – even a simple website or Facebook page can help new customers find you. Monitor Key Metrics  – Pick a few key numbers (like weekly sales or customer satisfaction) and track them regularly. Knowing your metrics tells you what’s working and what isn’t, so you can adjust your strategy accordingly. Stay Agile and Open to Change  – The business landscape can change quickly, so be willing to adapt. Keep learning and stay open to new ideas — whether it’s a new marketing trend or a shift in customer preferences, flexibility helps your business thrive. Seek Mentorship and Advice  – You don’t have to do it all alone. A business mentor or advisor can offer guidance from experience, help you spot opportunities, and keep you accountable to your goals. Growing a business is an ongoing journey, but you don’t have to do it alone. Collins Hume’s Strategy360 team specialises in business planning, mentoring and succession planning for businesses just like yours.  Ready to take your business to the next level? Contact Collins Hume’s Strategy360 today and let us be your trusted partner in success. Strategy360 By Collins Hume

FBT 2025: What you need to know Many businesses continue to offer flexible work from home arrangements. employees are often provided with work-related items to assist them to work from home. In general, where work related items are provided to employees and used primarily for work, FBT shouldn’t apply. For example, portable electric devices such as laptops and mobile phones provided to employees shouldn’t trigger an FBT liability as long they are primarily used by your employees for work. Multiple similar items can also be provided during the FBT year where required – for example multiple laptops have been provided to the employee – but only if the business has an aggregated turnover of less than $50m (previously, this threshold was less than $10m). If the employee is using equipment provided by the business for their own private use, normally FBT would apply to the private use. However, the FBT liability can be reduced based on the business use percentage.   Reducing the FBT record keeping burden Record keeping for FBT purposes can be onerous. From 1 July 2024 however, your business will have a choice to keep using the existing FBT record keeping methods, use existing business records where those records meet the requirements set out by the legislative instrument, or a combination of both methods: Travel diaries – see LI 2024/11 Living-away-from-home-allowance – FIFO/DIDO declarations – see LI 2024/4 Living-away-from-home – maintaining an Australian home declaration – See LI 2024/5 Otherwise deductible rule – expense payment, property or residual benefit declaration – See LI 2024/6 Otherwise deductible rule – private use of a vehicle other than a car declaration – See LI 2024/7 Car travel to an employment interview or selection test declaration – See LI 2024/14 Remote area holiday transport declaration – See LI 2024/10 Overseas employment holiday transport declaration – See LI 2024/13 Car travel to certain work-related activities declaration – See LI 2024/9 Relocation transport declaration – See LI 2024/12 Temporary accommodation relating to relocation declaration – See LI 2024/8 FBT housekeeping It can be difficult to ensure the required records are maintained in relation to fringe benefits – especially as this may depend on employees producing records at a certain time. If your business has cars and you need to record odometer readings at the first and last days of the FBT year (31 March and 1 April), remember to have your team take a photo on their phone and email it through to a central contact person – it will save running around to every car, or missing records where employees forget. Need FBT help? Please contact Collins Hume on 02 6686 3000 or access any of our free FBT factsheets here »

In last month’s article , we took a high-level look at what is changing with residential aged care come 1 July 2025.  The Government’s objective is to focus on increasing the quality, accountability and long-term viability of the aged care system.   Instead of an extra tax paid by younger workers, or a Medicare-style levy, the Government decided that new people entering the aged care sector would need to contribute more towards their care services.  Now we turn our attention to what is changing in the home care world … and let me tell you, there is plenty of changes coming.  Some of these changes are already locked; whilst other changes are still be thrashed out by the industry. Let’s look at some of the high-level changes that will impact you living in your home longer. From 1 July 2025, the home care program will be renamed the Support at Home Program.  The current four (4) funding levels of home care packages will be replaced by eight (8) funding levels plus a Restorative Care Pathway and End-of-Life Pathway.  The current Commonwealth Home Support Program (CHSP) will continue until 1 July 2027 when it will transition to the Support at Home Program … it may be in the “too hard” basket? The Support at Home funds will be paid quarterly and held on your behalf by Services Australia (I had to read that more than once).  Home care providers will invoice Services Australia to be paid for home care services provided to you. The home care provider will be paid 10% of your budget for care management services and there are some limits on how much money can roll into the next quarter as the Government want to see you use the funding for services and not accumulate in an “unused funds” basket.  The home care provider will then invoice you to be paid via a direct debit facility (most probably). The Government will introduce a defined service list (yet to be fully agreed and released) which will be divided into three (3) categories – clinical care, independence support and everyday living. In all packages, clinical (health and body) care is 100% funded by the Government … BUT the “other” living costs of services like meals, transport, social support, cleaning and gardening will need to be “contributed to” by you. The full details regarding exactly how much you will contribute towards your home care services have not yet been released … but the amount(s) will be linked to your age pension status.  In other words, self-funded retirees will pay more than full- or part-age pensioners. The Government is still the major contributor to aged care but people are now being asked to contribute more to their own care if they have the ability to do so.  However, anyone “already in the aged care system” (there are definitions around what this means) will be no worse off and not subject to new rules. Simple?  The Government hopes so and expect it will also reduce the current long wait times from assessment to service funding arriving.  I recently read a Frequently Asked Questions document prepared by the Government Minister’s Office which comprised 30 pages – I had a splitting headache by page 11 … so I’ll believe simple, faster and better when I see it. Family Aged Care Advocates guide you and your family through this ever-changing aged care maze so you can clearly understand what all these changes exactly mean for your particular situation. Mistakes or misunderstandings can be stressful, time-consuming and costly to fix. Feel free to give us a call on 0411 264 002 or visit us at www.familyagedcareadvocates.com.au

The perfect retirement looks different for everyone. However, one thing we all have in common: we all need a place to live! Housing is a key part of planning your retirement, but how do you work out the best financial decision for you? It can feel intimidating with inflation, soaring mortgage rates, and skyrocketing house prices. More and more retirees are still paying off their mortgage (up to 54% of 55-64 year olds, and 13% for those older than 65), thanks in part to rising house costs. These retirees are often paying off their mortgages with superannuation, which can limit spending for the rest of their retirement. For many, the goal of retiring with a home paid off is becoming more and more unachievable. Census data from Digital Finance Analytics showing outright home ownership for almost every age cohort has halved in the past 20 years (ABC News) But is renting any better? Let’s look at the options and how to rise above the troubling commentary that you might be reading. The Pros & Cons of Owning vs Renting There are many questions to consider as housing becomes a bigger issue for many people. Like “is it better to buy a house later in life to have housing security but be dealing with a mortgage?” What about, “can I rent and face potential instability but without the debt burden?” If you already own a home, do you keep it or sell it? Each option has upsides and downsides to it, based on your situation. In this issue, we’re looking at the pros and cons of both renting and owning, to help you decide which option is better for your own retirement plan. First, what’s so great about owning a house? For many Aussies, owning a home is a huge achievement, a sign that you've made it! And let's be honest, there's a lot to love about being the king or queen of your castle. You get to call the shots, renovate as you please, and create a space that truly reflects you. Need a bathroom makeover or a ramp instead of stairs? No problem, it's your house! And in retirement? There are some perks: Age pension friendly:  Good news, owning your home doesn't affect your eligibility for the Age Pension. It's considered an exempt asset, even if it's worth a fortune. Stability and peace of mind:  Say goodbye to rental worries. Owning your home gives you a sense of security and stability, knowing you're not at the mercy of landlords or rising rents. Leave a legacy:  Want to pass something special on to your loved ones? Your home can be a valuable inheritance for your children or grandchildren. Lower housing costs:  This is a big one, particularly when your income is limited. However, this only applies if you are mortgage-free (or very close to it)! Overall, owning your retirement home gives you control, stability, and won’t cost you as much throughout retirement. Okay, so what about the downsides of owning a home? Ongoing expenses:  Upkeep of the home, renovations, or conversions for mobility purposes can add up, as well as ongoing council rates or body corporate fees. Your money's tied up:  Having a lot of your wealth locked in your home can make it hard to access cash when you need it. The upfront costs:  Buying a home is a big financial commitment. If you don’t yet own a home, buying one later in life can create stress (in particular, keeping up with mortgage repayments when you want to start winding down). So, while owning a home has its perks, there can be both pros and cons, depending on your financial situation.  Does Renting in Retirement Work First, what are some of the positives about renting? Renting can be a legitimate financial choice later in life. Usually this is when people have built up a valuable pool of assets and investments - just not in property. Shares are the most common alternative investment, and some people prefer to live off the return they receive from their portfolio rather than spending their capital on an expensive home. Less home maintenance : Depending on your rental, you’ll probably be able to forget about mowing lawns and fixing leaky faucets, as your landlord takes care of all the upkeep. That can be a huge relief, especially as you get older and home maintenance becomes more challenging. Debt-free living:  Renting can be a great way to avoid taking on a big mortgage or tying up your money in property. Without a big expenditure of capital, people might choose to put that money into other investments. Flexibility:  Want to try a new neighbourhood or be closer to family? Renting gives you the flexibility to move whenever you like. Renting does have significant downsides too: No ownership:  You're not building any equity, and those rent payments don't contribute to owning anything in the long run. Limited control:  Want to paint the walls purple or put in a new kitchen? You'll need your landlord's permission, and they might not always say yes. Rental uncertainty: Rent prices can go up, and your lease might not always be renewed. This can make it hard to feel truly settled and secure. Constant payments:  While you don’t have debt, you do have to keep paying rent, week in, week out. This can put a strain on your finances and your mental health. Mental Health and Life Expectancy:  According to research, renting can have serious impacts on your long-term health and stress, which can reduce your quality of life. Thinking about renting? Ask yourself these questions: What are your financial goals? Does renting fit with your overall retirement plan? What kind of lifestyle do you want? Do you value flexibility or stability? What's your budget? Can you comfortably afford the rent, especially with potential increases? If you still have some time before retirement, and you have other assets or money in cash, consider seeking financial advice about whether you should invest in property now. Renting can be a great option for some retirees, particularly if it’s a choice that has weighed the pros and cons carefully.  While not all retirees will have the choice between owning and renting, there is always help available to navigate your retirement plan - whatever your situation. Already Own Your Home? You’ve Got Options! Things look a bit different if you're already a homeowner. Here's the deal: Still Paying Off the Mortgage? No worries - your goal should be to pay off your mortgage as soon as possible (while preserving your long-term retirement fund as much as possible). Some people choose to work a few years longer, or transition to retirement. We know a couple who are empty nesters and have been renting out spare rooms to homestay students. And if you're keen to ditch that mortgage debt sooner, we can help you explore some strategies to pay it off before retirement. Mortgage-Free? That’s great. With no mortgage hanging over your head, your housing costs are likely to be much lower – usually just maintenance and council rates. That frees up a lot of breathing room in your budget. If needed, you could consider utilising the equity in your home to fund your retirement through downsizing, or a home equity release.  Purchasing a Home in your 40s or 50s When considering purchasing a home for retirement, particularly if you're in your 40s or 50s, several key factors need careful consideration. Here's a breakdown: Think long-term: If you're buying in your 40s or 50s, that mortgage could be with you for a while! Make sure you can handle those repayments for the long haul. It's also worth thinking about how long you'll live in the house. If it's less than 10 years, you might not get the full benefits of owning. Got a second property or some investments up your sleeve? That could make managing mortgage payments in retirement a whole lot easier. You may need to ask yourself, can you really afford it? Let's be real, mortgages (and rent!) eat into your savings. So, factor in ALL the costs – think bills, repairs, council rates - into your retirement planning. The Age Pension probably won't cover your mortgage repayments, so it’s important to understand where your retirement income will come from. Crunch those numbers and figure out if buying or renting makes more sense for your retirement budget. What's the plan? Dream home or future nest egg? What do you want from this house? Is it your forever home, an investment for the future, or something to pass on to the kids? Have you thought about what happens when you eventually move on? Will you sell up or is it part of your legacy plan? Knowing your goals will help you pick the perfect place and avoid any surprises down the road. For more clarity on how advice could help you, please feel free to get in touch with Essential Wealth and Retirement: P . 02 5562 6260 (Ballina) P.  07 5230 4198 (Gold Coast) E:   support@ewar.com.au   W:   www.ewar.com.au     Ballina Office Address: 97 Tamar Street, Ballina, NSW 2478 Gold Coast Office Address: 80-82 Upton St, Bundall, QLD 4217 BallinaGCFP Pty Ltd ABN 12 670 111 583 trading as Essential Wealth & Retirement is a Corporate Authorised Representative no. 1305335 of GPS Wealth Ltd AFSL 254 544.   A word of caution for - the included material in this newsletter has been provided as General Advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your Adviser before you make any decision regarding this communication. We have taken care to prepare this material, but any decisions or actions you take as a result of you reading this communication are entirely your own.

Tamara Hepburn joined Collins Hume in July 2024, bringing with her 15 years of experience from executive support roles across the agriculture and livestock sectors coordinating membership engagement and client communications. Originally growing up Northern NSW, she spent time in Queensland before settling in the Lismore area with her family. As the Executive Assistant to Chris Atkinson and his team, Tamara is the one making sure everything ticks along – from managing ASIC requirements to onboarding clients.  She enjoys the variety in her role, whether it’s handling compliance, supporting clients or keeping things running smoothly behind the scenes. But what Tamara values most is the relationships – getting to know clients, understanding their businesses and helping them move forward.  Thrown into the deep end early on, Tamara quickly became Collins Hume’s go-to person during the Stars of Ballina 2024 fundraiser, working alongside Chris and his dance partner Maree to coordinate with the Cancer Council. She was also part of the team supporting Collins Hume at the Northern Rivers Business Awards, experiencing firsthand the strength and success of local businesses.  For Tamara, joining Collins Hume was a well-timed change. After taking a sabbatical at the end of 2023 to figure out her next step, she found Collins Hume at just the right time – during a business restructure and the launch of Strategy360. It was the fresh start she was looking for, and she’s grateful to be part of a team that fits.  Outside of work, Tamara enjoys running with her dogs, spending time with family and friends and refinishing old furniture – seeing potential in things that might otherwise be discarded.  With her experience, steady approach and genuine interest in people, Tamara has become a valuable part of Collins Hume and a reassuring presence for both team and clients. — Tamara Hepburn brings a solid foundation of knowledge to her role, holding a Diploma in Accounting, a Diploma in Hospitality Management and a Cert III in IT. Her qualifications, combined with years of hands-on experience in executive support roles, give her a well-rounded skill set that’s invaluable in a busy professional services firm.