​Under the current system (today), if nothing changed:
​

• Total gain = $1,000,000 – $500,000 = $500,000
• 50% discount applies
• Taxable gain = $250,000

​Simple.

​Under the proposed new system, the gain gets split into two parts:
​
🟦 Part 1: Before 1 July 2027 (old rules still apply)

• Gain = $800,000 – $500,000 = $300,000
• 50% discount still applies
• Taxable gain = $150,000

👉 No change here.

​🟩 Part 2: After 1 July 2027 (new rules apply)

• Gain = $1,000,000 – $800,000 = $200,000

Instead of a 50% discount:

• The $800,000 cost base is adjusted for inflation (CPI)
• Only the “real gain” above inflation is taxed, so adjusted for inflation → say ~$95,000 real gain

👉 Then a minimum 30% tax rate may apply to this portion

Source: Budget 2026-27 Fact Sheet – Negative Gearing and Capital Gains Tax Reform. Figures are simplified to illustrate how the proposed rules may work. Actual outcomes will vary.

The new rules may reduce the benefit of selling assets in a low-income year—a strategy that has traditionally worked well for retirees.

The impact becomes clearer when you compare different income levels.

The old system rewards time held (via the 50% discount)

The new system focuses on “real gains” (after inflation)
​
​So depending on:

• how long you hold the asset, and
• what inflation looks like

👉 you could pay more, or sometimes less, tax than today

​Even if your income is low in the year you sell:
​
👉 A minimum 30% tax rate may apply to gains after July 2027
(Unless you’re receiving certain income support payments, like the Age Pension)

This is a classic example of why:

👉 tax should never drive the decision—but it absolutely needs to be considered.

The focus should always be:

• getting the right investment
• for the right reason
• aligned to your long-term plan

​Then structuring it as efficiently as possible.

There were no major changes to superannuation this year.

That’s important.

Most of the strategies we’ve been working on together remain intact.

Instead, the Budget focused more on:

• tax tweaks
• investment rules
• health and aged care
• cost-of-living measures

​Some are helpful. Some are worth keeping an eye on. A few may shape decisions down the track.

💰 1. Small tax cuts and a simpler tax return

• A $1,000 standard deduction for work-related expenses (from 2026/27)
• A small ongoing tax offset (~$250/year) will apply to people earning income from work from 2027/28
• Slight reductions to the lowest tax rate over time

👉 What this means:

• Slightly more cash in your pocket if you're still working
• Tax time becomes a bit simpler for smaller claims
• If you are fully retired, this particular offset wont apply

​Not life-changing—but directionally positive.

​🏥 2. Health insurance may cost more as you age.
​From April 2027:

• The extra rebate for over-65s is being removed
• Everyone moves onto the same base rebate (income-tested)

👉 What this means:

• If you’re 65+, your premiums may gradually increase
• Worth reviewing whether your cover still suits your needs

​🚗 3. Electric vehicle tax perks are being wound back
If you’re using (or considering) a novated lease:

• Current generous tax treatment reduces from April 2027
• Higher-priced vehicles lose some of the benefit first

👉 What this means:

• Timing matters if you're considering an EV
• Existing arrangements are generally protected

​🏡 4. Investment property rules are tightening.
From July 2027:

• Newly purchased existing properties lose full negative gearing benefits
• Losses can only offset rental income or future gains

👉 What this means:

• Existing properties are not affected
• New investments may be less tax-effective

A meaningful shift if property is part of your long-term strategy.

​📈 5. Capital gains tax (CGT) changes.
Also from July 2027:

• The 50% CGT discount is being removed going forward
• Replaced with an inflation-based calculation method
• A minimum 30% tax rate on gains applies

👉 What this means:

• Future investment gains may be taxed differently
• Long-term planning becomes more important

Importantly:

• Existing gains up to July 2027 are preserved under current rules

For this interested, here is a real world example of how the new CGT rules could work.

• These CGT changes mainly affect investments held in your own name, trusts or partnerships
• Changes do not apply to Superannuation funds (including SMSFs), your main residence (family home) or companies (different tax rules apply)​

​🧾 6. Family trusts become less flexible
From July 2028:

• Minimum 30% tax applies to trust income

👉 What this means:

• Less flexibility in distributing income across family members
• Some structures may need review over time

There’s a transition window, so this is one to plan for—not react to.

​👵 7. Aged care support improves (but with changes)
From October 2026:

• More home care packages available
• Personal care becomes fully government-funded

👉 What this means:

• Improved access to care
• Potentially lower out-of-pocket costs for some services

IMPORTANT - This article is general in nature and is intended to provide a high-level overview of recent Federal Budget announcements. It doesn’t take into account your personal situation, objectives or needs. If you’re unsure how any of these changes may apply to you, it’s worth getting advice specific to your circumstances before taking action.

This summary draws on the Federal Budget 2026 update prepared by MLC.
You can read the full overview here:

​Since 1980, the Australian stock market has rewarded investors with an annualised return of about 11%. But returns in any given year may be sky-high, extremely poor, or somewhere in between.

• Annual returns came within two percentage points of the market’s long-term average in just seven of the past 45 years.

• Yearly returns have ranged as high as up 67% and as low as down 39%.

​• Since 1980, annual returns have been positive 33 times and negative 12 times.

​
​You don’t get high returns without bearing some painful losses along the way. You cannot achieve perfect safety without accepting low returns.

History has shown however that in time, markets recover and reward the patient investor.  So there’s no real damage done, as long as you have time on your side.

This is tricky when in retirement, as you don’t stop eating just because markets have gone temporarily mad (a bit like right now). You still need to draw a pension. This means that with the traditional superannuation pension, you’ll be selling low to fund your regular income. And in the years just either side of your retirement, that can be devastating.

This is known as sequencing risk and is an important concept. Read more about it here.

One potential solution is a retirement “bucket strategy”. This approach establishes different ‘buckets’ or accounts for different types of spending and investing over the entire period of your retirement.

Bucket strategies are designed to balance the need for income stability in the short-term and capital growth in the long-term.
 
The bucket approach divides your retirement into different phases, with a separate account established to meet your financial needs as you age.

A simple three-bucket retirement strategy, for example, divides your retirement savings into three accounts (short, medium and long-term), each of which has a different role:​

​This is the liquid component and is designed to meet your near-term living expenses for the next 2–3 years. It’s not designed to provide big investment returns, but to hold the capital to meet your financial needs not covered by other income sources.  

Your cash bucket provides peace of mind you can pay your short-term expenses and ride out market volatility without needing to sell your long-term investments.

​The second bucket provides income and stability for your retirement portfolio. Income from this bucket is used to refill the short-term bucket as the assets in it decline. These are typically conservative investments too.  A small component may be allocated to quality, dividend paying shares.

​The third bucket is designed to grow, helping ensure your retirement savings do not run out.

The investment returns from this bucket are likely to fluctuate over the short to medium-term. The assets in this bucket are not sold if the market declines but are held over the long-term and ride out any return volatility.

​Using the bucket strategy to manage your retirement savings is not for everyone. As with any investment strategy, this approach has some issues you need to consider:

​​A bucket strategy is generally not set-and-forget. Maintaining the various accounts and keeping the right amount of money in each bucket can be time consuming. You also need to establish rules for when and how you will replenish your buckets and what you will do with returns if your investments do better (or worse) than expected.

Most people will need an adviser to manage this process.

A bucket strategy may not be right for retirees with a conservative risk profile. When interest rates are low for your cash bucket, you must be prepared to invest in riskier assets in buckets 2 and 3. If not, the strategy may not work as your savings will not be growing enough to replenish your first bucket.

​

This is by no means the only approach.  I have other clients who just invest in growth investments (shares and property) that pay dividends or rent.  If shares go down, or they are without a tenant for a while, they just tighten their belt a little. You need to be quite an aggressive investor for this approach.
 
And there are other options too. It's horses for courses.

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These are great places for great ideas

Just a quick word on "Recency" bias.

Recency bias is the tendency to place too much emphasis on experiences that are freshest in your memory. 

For example, would you want to go for a long ocean swim after watching Jaws?

Probably not, even though the actual risk of being attacked by a shark is infinitesimally small.

In the investing world, recency bias can be hard to avoid. Absolutely everyone is talking up property at the moment based on the events of the last few years, expecting that this will continue into the foreseeable future.  

People forget. 

I bought a 3 bedder in Taringa in 2008, which was a high point in the market. Up until a few years ago it wasn't worth much more than I paiod for it - it was a dog!!  The only growth I've had has been in the last few years, which has been quite spectacular.  However, my return over the holding period of 15+ years is only average. Even less if I count the negative gearing or cash flow loss. 

This is a reminder to me that just about everything is cyclical.  

When it comes to the future value of things, there's little we can be certain of, but these things I know to be true:  Cycles prevail eventually.  Nothing goes in one direction forever.  Trees don’t grow to the sky.  Few things go to zero.  And insistence on extrapolating today’s events into the future can be very bad for investor health.

The problem is that each cycle is different.  So it’s very difficult to convince yourself that;

a) The good times will eventually end OR

b) The bad times won’t last forever.

The key message here is don't overvalue recent events and remain focused on the big picture.

​3. Work directly with me.

If you’d like to work with me and my team to move from stressed and frustrated to relaxed and on track, you can schedule a phone call here.  You’ll find out how we can help and if we are the right fit for you. 20 minutes, no obligation.

​MPORTANT ​This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each individual and investor are different and you should not act on this information without speaking to a financial, tax or legal adviser, who can consider if the financial product and strategies are appropriate for you. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. See full Terms and Conditions here.

Case studies in this publication are for illustration purposes only. The investment returns shown in any case studies in this publication are hypothetical examples only and  do not reflect the historical or future returns of any specific financial products. Past performance is not a reliable guide to future returns as future returns may differ from and be more or less volatile than past returns.
​
Any general tax information provided in this publication is intended as a guide only and is based on our general understanding of taxation laws. It is not intended to be a substitute for specialised taxation advice or an assessment of your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent.

There are two key reasons why topping up your super could be a better option.
​
The first is that home loan repayments are usually made with after-tax money. Alternatively, concessional super contributions can be made with pre-tax dollars (if you’re an employee) or claimed as a tax deduction (if you’re self-employed and meet other eligibility requirements). Learn more about Concessional Super Contributions here.

These concessions can help you use your surplus cash flow more effectively.

The other reason is the amount of concessional super contributions you can make each year is far lower than it used to be (currently limited to $27,500 a year). As a result, it has become much more difficult to make large tax-effective super contributions just before you retire.
​
To achieve the retirement lifestyle you desire, you may need to make additional super contributions earlier than you had planned. That way you can take greater advantage of the contribution cap over the remainder of your working life.

These are a few of things you need to weigh up.

Consider the size of your loan and how long you have left to pay it off
A dollar saved into your mortgage right at the beginning of a 30-year loan will have a much greater impact than a dollar saved right at the end.

The interest on a home loan is calculated daily
The more you pay off early, the less interest you pay over time. In a higher interest rate environment many homeowners, particularly those who bought a home some time ago on a fixed rate, will now be paying much more each month for their home.

Offset or redraw facility
If you have an offset or redraw facility attached to your mortgage you can also access extra savings at call if you need them. This is different to super where you can’t touch your earnings until preservation age or certain conditions of release are met.

Don’t discount the ‘emotional’ aspect here as well. Many individuals may prefer paying off their home sooner rather than later and welcome the peace of mind that comes with clearing this debt. Only then will they feel comfortable in adding to their super.
​
Before making a decision, it’s also important to weigh up your stage in life, particularly your age and your appetite for risk.

Betty is 55, single and earns $90,000 pa. She currently has a mortgage of $200,000, which she wants to pay off before she retires in 10 years’ time at age 65.

Her current mortgage is as follows:

• Mortgage $200,000 (not an investment loan)
• Interest rate 6.0% pa
• Term of home loan remaining 20 years
• Monthly repayment (post tax) $1,433 per month

Betty has spare net income and is considering whether to:

• make additional / extra repayments to his home mortgage (in post-tax dollars) to repay her mortgage in 10 years, or
• invest the pre-tax equivalent into superannuation as salary sacrifice and use the super proceeds at retirement to pay off the mortgage.

​Sorry, this bit is a blur of numbers (unavoidable unfortunately!!). If you just want ​the bottom line, see a few paragraphs down. If you want to know how we got there, keep reading. 

Assuming the loan interest rate remains the same for the 10-year period, Betty will need to pay an extra $787 per month post tax to clear the mortgage at age 65.

Alternatively, Betty can invest the pre-tax equivalent of $787 per month as a salary sacrifice contribution into super. As she earns $90,000 pa, her marginal tax rate is 34.5% (including the 2% Medicare levy), so the pre-tax equivalent is $1,201 per month or $14,418 per annum. 

To work out how much she’ll have in super in 10 years, we’re using the following super assumptions:

• The salary sacrifice contributions, when added to his employer SG contributions, remain within the $27,500 pa concessional cap.
• A 15% tax applies to the contributions
• His super is invested in a industry fund in their 'balanced' investment option earning 6% after fees and taxes.
• The assumptions remain the same over the entire 10 years

The Bottom Line
Betty will have an extra $167,484 in super. Her outstanding mortgage at that time is $129,062, and after she repays this balance from her super (tax free as she is over 60), she will be $38,422 in front.

Of course, the outcome may be different if there are changes in interest rates and super returns in that period. The super rules can change too!!
​

32 year old Guy and 30 year old Emma are a young professional couple who have recently purchased their first home.

They’re both on a marginal tax rate of 39% (including the 2% Medicare levy), and they have the capacity to direct an extra $1,000 per month into their mortgage, or alternatively, use the pre-tax equivalent to make salary sacrifice contributions to super.

Given their marginal tax rates, it would make sense mathematically to build up their super.

However, they’re planning to have their first child within the next five years, and Emma will only return to work part-time. They will need savings to cover this period, as well as assist with private school fees.
​
Given their need to access some savings for this event, it would be preferable to direct the extra savings towards their mortgage, and redraw it as required, rather than place it into super where access is restricted to at least age 60.

You can still put money in to super, even if you are already using your Concessional Cap of $27,500 per year.  You can contribute after tax dollars up to a limit of $110,000 per year (known as the non-concessional super cap - conditions apply, learn more here).

​With interest rates the way they are, the maths is pretty similar for both options.

By that I mean, if you chose to repay debt with spare cash, your loan would reduce at about the same rate as your super would increase if you choose to put that cash into super.  Does that make sense?  

Repaying debt is considered a lower risk strategy though, as there are no guarantees about future investment returns.

Gee, this is where it gets even more complicated!!  What it means is that the benefit to you of early debt repayment could be less, because you can claim the interest as a tax deduction (and getting some money back in your tax). To offset this, your investment generates an income, which you have to pay tax on.  Argh!! So many scenarios here, best to seek advice if you are not confident to work through the various issues yourself.

Of course, the mathematics is not the only issue.

​What about your emotions and stress levels?

Anyone who has paid off a mortgage will certainly tell you how great that feels.

Yee-hah!!

And I have not met anyone yet who does not like the tax benefits that come from superannuation contributions or watching the miracle of compound interest at work.

The key message here is to have a plan to eliminate debt by, or at, retirement.

​2. Complete your Financial Readiness quiz

It can be hard to know if you’re doing well with your money or not, so we’ve taken the guesswork out of it for you.

Take our quick quiz and work out if you’re doing all the right things with your money or need to pull your socks up, as well get some ideas about what you should be doing next.

​3. Work directly with me.

If you’d like to work with me and my team to move from stressed and frustrated to relaxed and on track, you can schedule a phone call here.  You’ll find out how we can help and if we are the right fit for you. 20 minutes, no obligation.

1financial plan Since then, returns have been way above average while volatility has been way below average.

​Profiting from a risky asset always involves a cost – the “price of admission.” That price is not just whether we get the long-term return we hoped for, but it’s also the ride along the way. And it’s this volatility that compels some of us to make bad decisions.

Volatility’s return is a source of discomfort for all of us as it forces us to pay more attention to near-term market moves, which is mentally tiresome. And it tempts us to make near-term decisions that aren't good for us.  Sometimes, it’s hard to resist counterpunching.

Some basic tenets of behavioural finance can prove insightful at times like these. The goal is not to change your mental make-up – that’s impossible – but to appreciate that our hardwiring leads to some quirky behaviour.

​Self-awareness can help us hedge bad decisions.

What's your plan?
Having an investment plan in which you are reasonably confident helps calm free-floating anxiety and address questions about what to do in reaction to events over which you have no control.

That is the easy first thing: Do you have a plan about your investments and overall financial outlook?

A financial plan can help map out the direction investments should take. It's also useful to have handy when anxiety starts to mount about the economy. You are prepared for contingencies and worst-case scenarios. 

These are the questions will answer.

What is your goal?
Pro tip: Quantify your goal if possible. For instance, I need $2 million when I retire in 10 years. Armed with this data, you can calculate the rate of return needed. That will dictate the level of risk in your portfolio -- or the extra amount you'll need to save to hit that goal if the level of risk is not feasible.

How long will you be investing in the share market?
Pro tip: The longer the holding period, the less the probability of losing money. Historically, there were no 20-year holding periods with negative returns.

What is an appropriate asset allocation plan?
Asset allocation is what financial professionals call spreading money around various types of investments, such as shares, property cash or fixed interest. It should be based on your goals, time frame and risk tolerance.

Pro tip: Think about worst-case scenarios, such as the recent financial crisis. Sharemarkets lost more than 50% between Oct. 1, 2007, and March 5, 2009. Some portfolios lost more than that and some lost less. Smart asset allocation and diversification can lower the risk in your portfolio and improve returns.

What is your process for rebalancing or selling investments?
Pro tip: Maintain a disciplined investment approach. Stay invested and reallocate your portfolio to its intended target allocations if they get out of range. Rebalancing may reduce risk and is an automatic way of buying low and selling high.

Planning short-circuits panic
There can be unforeseen and expensive consequences to blindly selling in scary market conditions, including transaction costs and opportunity costs. It typically costs money to buy and sell investments. 

Selling low also locks in losses.
Trying to time markets in the short run is counterproductive, as the odds are against you. You have to guess right twice: when to get out and when to get back in. If you don't guess right, long-term returns will be compromised and short-term paper losses may turn into permanent ones.

Employing patience and taking the long view will help you get to the other side of market tumult battered but intact.
 
In times of duress, use market volatility as a gauge for your risk tolerance. 
​Here is a really important one. When market conditions return to calm, use your new found experience to fine-tune your approach to investing to be better prepared next time.

Don't worry, the market will tank again.

​The dog on the other hand is all over the place. When it gets excited, it runs well ahead of me. At other times, when spooked, the dog will fall back behind me. Sometimes it will pull on the leash and try and drag me off track. But most of the time, it will just dash all over the place for no obvious reason. 

The point is this: no matter what the dog does throughout its journey, it will inevitably arrive at the beach. After all, that’s where I’m heading and the dog is tied to the leash"

Variations on this story are as old as the share market itself and is an analogy for share market behaviour. 

I represent company profits, or the intrinsic (or true) value of a share – moving forward steadily and generally consistently. The dog represents the share price – whose movements are completely unpredictable. 

Trying to guess which way my dog will run next, is just silly. We do know it’s general direction over time though.


With the markets jittery at the moment, I thought it worthwhile to revisit some recent blogs.

My ten best investment tips

Avoiding investment mistakes

The importance of diversification

 If anyone has any questions, feel welcome to contact me.

Whenever you're ready....here are three ways I can help you get on track to a stress-free retirement.

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​
They are great places for great ideas.

​3. Work directly with me.

If you’d like to work with me and my team to move from stressed and frustrated to relaxed and on track, you can schedule a phone call here.  You’ll find out how we can help and if we are the right fit for you. 20 minutes, no obligation.

​IMPORTANT This information is of a general nature only and may not be relevant to your particular circumstances. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions.To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. See full Terms and Conditions here.

You still have to eat. You still have to draw pension payments. You might even have to sell investments to fund those pension payments. And selling when markets are depressed can really play havoc with how long your funds will last in retirement.
​
You might not think it makes much difference if markets recover in the end.  You’d be wrong. Here is a very simple example to explain why. 

Retiree A and Retiree B are identical in that they have the same investment dollars, they draw the same income and their investment earnings are the same - positive 20% one year and minus 10% in the other year.  The only difference is that the order of those returns is reversed.  Check out the difference in balances at the end of two years.

​While the average return is the same, the results are quite different.

​It was this timing of returns that proved so devastating to many new retirees during the GFC.

Take this longer example. Two investors make superannuation contributions of $10,000 per annum over a 20 year period. Let’s also assume that their average return was also identical, at 7%. And finally let’s assume that the returns of each investor were identical in years 2 through 19.

The only difference was that investor 1 had a -10% return in year 1 and a +10% return in year 20 and Investor 2 had the opposite - +10% in year 1 and -10% in year 20.

What difference would it make. Heaps!!

As investor 2 experienced a significant negative return in the final year, the time at which the balance was the largest (and closest to retirement), his account balance at the end was $402,634,$81,000 lower than the $483,636 balance of Investor 1.
 
There are several simple strategies that retirees can implement to reduce this imapct.

• Keep sufficient assets in a liquid fund. This would allow you to avoid the need to cash out investments after a significant fall in the markets, while you wait for markets to recover.
• Reduce the level of investment risk.  The aim is to lower the chances of significant losses on a retirement nest egg. What are optimal levels of risk to accept however? As your superannuation savings will (hopefully for you) remain invested for many years after your retirement, taking too little risk may mean you run out of capital sooner
• Increase the level of diversification.  Diversification is a foundation piece of risk management
• Buy guaranteed income streams.
• Defer retirement
• Save more!!

 
While these tips are meant to point you in the right direction, there’s no substitute for good financial advice financial advice. This is too important not to get right.
 
Get practical advice and act now. ​ Your financial future may depend on it.

Want to know more. Read 8 Investment Risks Retirees Can Not Ignore.

​IMPORTANT This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each individual and investor are different and you should not act on this information without speaking to a financial, tax or legal adviser, who can consider if the financial product and strategies are appropriate for you. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. See full Terms and Conditions here.