Given it will most likely be the largest debt that you pay off in your lifetime, consider a proactive ongoing approach to paying off your home loan. This can reduce the amount of interest you pay, and decrease the life of the loan. In turn, you can free up cash flow sooner and direct it elsewhere, such as saving and investing for the future. One consideration is refinancing (or switching) if you find a more appropriate home loan. Home loan refinancing Home loan refinancing occurs when a borrower repays their home loan with one lender (the previous lender) using the proceeds of a new home loan obtained from another (the new lender). Here is a broad outline of the steps involved in the refinancing process: The borrower contacts the new lender and lodges an application with all required documentation. The new lender considers the documentation and assesses the application. The new lender conditionally approves the application and sends a letter of offer to the borrower. The new lender orders a property valuation. The borrower accepts the offer. The borrower completes and submits a Discharge Authority Form request with the existing lender. The existing lender prepares the Discharge of Mortgage form and associated documentation for settlement. The new lender pays the existing lender the amount owing on the loan. And, the existing lender gives the new lender the certificate of title and Discharge of Mortgage form. The new lender submits the certificate of title, Discharge of Mortgage form and the new mortgage to the relevant land titles office.(1) So, why can refinancing be a key consideration in terms of taking an ongoing proactive approach to paying off your home loan? One reason is that you may save on unnecessary home loan interest. For context, according to the ACCC's Home Loan Price Inquiry final report: "A significant number of borrowers have not switched lenders for several years. As at December 2019, almost half of all variable rate loans were originated at least four years ago. As borrowers' loans get older, the gap between what they pay and what borrowers with new loans pay widens. For example, as at September 2020: borrowers with home loans between three and five years old were, on average, paying around 58 basis points above the average interest rate for new loans borrowers with home loans between five and 10 years old were, on average, paying around 71 basis points above the average interest rate for new loans borrowers with home loans greater than 10 years old were, on average, paying around 104 basis points above the average interest rate for new loans" (2) When considering the above, approximately 53% of existing borrowers are unaware of their current interest rate. Furthermore, nearly one-third of existing borrowers wouldn't consider refinancing unless they were offered an interest rate at least 60 basis points (equivalent to 0.6%) lower than their current one. This can often come down to financial disengagement, and many existing borrowers presume they probably won't save much (by way of meaningful savings) through refinancing. According to recent data from the Reserve Bank of Australia^ on housing lending rates for the month of October 2020 (and taking into consideration all lending institutions and all loans*): the lending rate for outstanding owner-occupied housing credit was 3.13% the lending rate for new owner-occupied housing credit was 2.66%. This is a 47 basis point (equivalent to 0.47%) difference between the lending rates of existing and new borrowers. From a long-term perspective, 47 basis points can add up to meaningful savings. Here is a simple example regarding a standard variable rate owner-occupier home loan with principal and interest repayments-and, an existing borrower: * This is a basic example-it doesn't, for example, take into account the effect of potential interest rate movements over time or any refinancing costs that may apply, such as discharge fees, application fees or legal fees. ^ Standard home loan products are those supplied with a range of add-on features, such as an offset account. Moving forward When it comes to refinancing your home loan, there can be a range of reasons why you may want to change from your existing lender to a new lender including: If your circumstances have changed, or you've had your home loan for a few years, then refinancing could offer you the chance to take advantage of more flexible features or competitive interest rates. As it stands, there are over 100 home loan lenders in Australia offering a combined total of nearly 4,000 different home loan products. Refinancing could also enable you to use your home equity to invest, consolidate debt or access cash to fund expenses such as education costs or home improvements/renovations. At the end of the day, it's important to do your homework so you can make an informed decision on whether refinancing is appropriate for you. This can include seeking professional advice. Lastly, please remember, there may not be a need to refinance. For example, you may have the option of asking your existing lender for a better rate or switching to a cheaper, but still appropriate product with them. If you have any questions regarding this approach, please contact us so we can put you in touch with our advice partners at EWAR or at Regional Finance Solutions. (1) Home Loan Price Inquiry final report, p.8 (2) Home Loan Price Inquiry final report, p.18 * Variable-rate, fixed-rate, interest-only, and principal-and-interest housing credit basis. The information contained on this website has been provided as general advice only. The contents have been prepared without taking account of your objectives, financial situation or needs. You should, before you make any decision regarding any information, strategies or products mentioned on this website, consult your own financial adviser to consider whether that is appropriate having regard to your own objectives, financial situation and needs. Whilst Essential Wealth and Retirement Pty Ltd is of the view the content of this website is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed, and no warranty of accuracy or reliability is given or implied. Therefore, no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Essential Wealth and Retirement Pty Ltd or GPS Wealth Ltd or any officer, agent or employee of Essential Wealth and Retirement Pty Ltd or GPS Wealth Ltd.

This tends to be the moment when we also make new resolutions for the year ahead. For context, a resolution is a firm decision to do or not to do something. And, the making of a resolution can often be sparked by our need or want, upon reflection, to seek positive change in an area of our life. This may be especially the case when reflecting on the 2020 calendar year. The 2020 calendar year was a year unlike any other in recent memory-testing us financially, physically, mentally, and emotionally over an extended period. The flow-on effect of policies implemented to combat COVID-19 (e.g. social distancing and restrictions), saw many of us experience a reduction, or loss, of our earnings (work and/or investment-related). We may also have been more cautious with our spending, despite our earnings remaining the same. This may have been due, in part, to our concern over the state of the economy and rising unemployment-pointing to a possible reduction, or loss, in our earnings in the future. In both instances, this may have shone a confronting light on our existing strengths, weaknesses, opportunities, threats, values and priorities-and shown us where change was required. With this in mind, we discuss personal finance-related resolutions below. Personal finance-related resolutions When it comes to personal finance-related resolutions, this can encompass many different things such as earning, spending, saving, investing, donating, and paying off debt. Potential resolutions could include to: earn more money goal: upskill or retrain in your chosen profession with X course spend less money goal: reduce your personal and household bills by $X per week stick to a budget goal: use a budget tracking tool to help stick to your budget of $X per week save more money goal: save $X per week in a separate high-interest savings account or in super donate more money or time goal: donate $X or X hours of your time this year to your chosen charity pay off debt goal: pay off an extra $X of debt each week, or $X this year As you can see, we have also included goals. This is in recognition that resolutions can often fall by the wayside without thinking about and planning how they can actually be achieved. Also take stock of, and reflect upon, your existing circumstances (financial situation, goals and objectives) regarding areas of your personal finances, such as your: investments superannuation estate planning debt management insurance planning cash flow management By doing this, you can zero in on specific areas where you need or want positive change. However, before you get started with making your own resolutions, and setting your own goals, it's important to understand that resolutions aren't often achieved. For example, in the context of New Year's resolutions, roughly 36% of us tend to 'throw in the towel' in the first month of making our resolutions-and, when all things are said and done, 88% of New Year's resolutions fail. There can be a number of reasons for this, such as the wrong mindset, poor time management, unrealistic expectations, undesirable habits, getting distracted with life, or ill-defined (or no) goals and objectives. As such, you may find that using the SMART principle for your goal setting proves beneficial, for example: S for Specific – What goal do you want to achieve? And, why? M for Measurable – How will you track your progress towards your goal? A for Assignable – What do you, and others, need to do to achieve your goal? R for Realistic – Is your goal achievable, given your available resources? T for Time-based – When will you expect to achieve your goal? Additional inclusions can be 'E for Evaluate' and 'R for Re-adjust' (SMARTER)-these can be important in terms of tracking your progress towards achieving your goal and making changes when appropriate. Moving forward 2020 was a challenging year, testing us all in one way or another. Let's take the insights gained and lessons learnt, and put them to good use-moving forward in a positive direction: "The new year stands before us, like a chapter in a book, waiting to be written." (Melody Beattie) "For last year's words belong to last year's language, and next year's words await another voice." (T.S. Eliot) "What the new year brings to you will depend a great deal on what you bring to the new year." (Vernon McLellan) Collins Hume together with Essential Wealth and Retirement is always ready to help, so please contact us on 02 6686 3000 if we can be of any further assistance. The information contained on this website has been provided as general advice only. The contents have been prepared without taking account of your objectives, financial situation or needs. You should, before you make any decision regarding any information, strategies or products mentioned on this website, consult your own financial adviser to consider whether that is appropriate having regard to your own objectives, financial situation and needs. Whilst Essential Wealth and Retirement Pty Ltd is of the view the content of this website is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed, and no warranty of accuracy or reliability is given or implied. Therefore, no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Essential Wealth and Retirement Pty Ltd or GPS Wealth Ltd or any officer, agent or employee of Essential Wealth and Retirement Pty Ltd or GPS Wealth Ltd.

For some of us, in terms of estate planning and the management of our affairs, our main focus can often be on drafting a will-and putting arrangements in place for assets (e.g. super) that may not be covered by our will. These matters primarily centre on how we would like our affairs managed in the event of our passing. Importantly, thought should also be given to the management of our affairs while we are still alive. With this in mind, below is a brief overview of powers of attorney, and the different types that may be available and their benefits. Please note: Laws governing powers of attorney may vary in each state and territory. Please consider seeking professional advice to better understand how they may relate to your personal circumstances. Powers of Attorney overview In broad terms, a power of attorney is a legal document that gives authority for someone or a number of people (the attorney/s) that you (the donor or principal) appoint to act on your behalf regarding the management of your affairs. To make a power of attorney, you must have mental capacity-meaning you're deemed capable of understanding the nature, significance and effect of making a power of attorney when you sign the legal document. Appointing an attorney can be beneficial in the event you find yourself unable to manage your affairs, for whatever reason, either now or in the future. For example, if you suffer ill health, become confined to hospital, travel overseas, or are unable to attend a financial institution or real estate agency, or government office. An attorney can be a family member or a friend or someone else that you trust. However, in general, they must: be at least 18 years old, not be bankrupt or insolvent under administration, and not be your paid carer, health provider, or accommodation provider. This authority generally centres on financial matters (including related legal matters) and may include, for example, buying/selling shares, managing an investment property or operating a bank account. As an example, a recent report* estimates that in Australia there are several hundred thousand bank accounts being operated under a substitute decision-making arrangement, such as a power of attorney. Power of Attorney types When it comes to powers of attorney, the two main types are: A general power of attorney, which gives authority for someone to act on your behalf on financial matters, either broad or more specific (e.g. only managing your investment property or making all of your financial decisions for the time you're on holidays). This type of authority may commence as soon as it's signed by you and accepted by the person you appoint as your attorney-alternatively you may wish to state when you would like this type of authority to commence. Furthermore, this type of authority remains valid until one of the following occurs: it reaches its expiration date, it's revoked by you, it's cancelled or suspended by a relevant court or tribunal, you pass away or you lose your decision-making capacity. An enduring power of attorney is similar to a general power of attorney, however, this type of authority continues even if you lose your decision-making capacity. This type of authority may be of great assistance, should you lose the capacity to manage your affairs through illness, accident or advancing age. Please note: A medical power of attorney may also be possible-depending on your state or territory-and gives authority for someone to act on your behalf on medical matters. This can often be included in an enduring guardianship or enduring power of attorney. Considerations It's important to understand that giving someone the authority to act on your behalf is a serious decision. They should be someone that you trust will act in your best interests-and they should have the capacity and ability to make the required decisions should the event arise. It's important to consider making a power of attorney before you need it. This can be particularly true when it comes to an enduring power of attorney. As previously mentioned above, once you have lost mental capacity, you can't make a power of attorney. It's important to consider having a conversation with those you wish to appoint-as well as seek the advice of an estate planning professional to understand your options, the possible outcomes of your decisions, and make sure they align with your goals and objectives. Collins Hume together with Essential Wealth and Retirement is always ready to help, so please contact us on 02 6686 3000 if we can be of any further assistance. Source: The different types of powers of attorney. (2020). Retrieved from https://ewar.financialknowledgecentre.com.au/kcarticles.php?id=2895. The information contained on this website has been provided as general advice only. The contents have been prepared without taking account of your objectives, financial situation or needs. You should, before you make any decision regarding any information, strategies or products mentioned on this website, consult your own financial adviser to consider whether that is appropriate having regard to your own objectives, financial situation and needs. Whilst Essential Wealth and Retirement Pty Ltd is of the view the content of this website is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed, and no warranty of accuracy or reliability is given or implied. Therefore, no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Essential Wealth and Retirement Pty Ltd or GPS Wealth Ltd or any officer, agent or employee of Essential Wealth and Retirement Pty Ltd or GPS Wealth Ltd. *Australian Government, Attorney-General's Department. (2020). Enhancing protections relating to the use of Enduring Power of Attorney instruments. Consultation Regulation Impact Statement February 2020.

However, when it comes to retirement and retirement intentions, there can be common threads. For example, according to 2018-2019 ATO data*: The average age of retirement was 55.4 years. The top three reasons retirees left their last job included: they reached retirement age or became eligible for super; they experienced sickness, injury or disability; or they were retrenched, dismissed or no work was available for them. The main factor influencing a person's decision about when to retire was financial security. For people who were intending to retire, the average age they planned to retire was 65.5 years. The Government's Age Pension remains the main source of income for most retirees, followed by super. In terms of income from super, depending on your personal circumstances, there may be a number of options available. For example, income via a super retirement income stream, such as a: lifetime income stream; fixed-term income stream; account-based income stream; or non-commutable income stream. Importantly, a non-commutable income stream or transition to retirement income stream (TRIS) may be of benefit if you are still working, but nearing retirement, and looking to either: receive additional income; boost your super savings and reduce your tax; or reduce your work hours, whilst maintaining your income level. Below is an overview of the main points about a TRIS, inclusive of the two types of TRIS: accumulation phase and retirement phase. Accumulation phase TRIS To be eligible to commence a TRIS, you must meet a condition of release, namely, reached preservation age (determined by your date of birth, see below): To commence a TRIS, you need to transfer some or all of your super benefits to a pension account. No limit applies to the amount of super benefits that you can transfer to support a TRIS-referred to as the transfer balance cap (for more information, see below). The value of the assets supporting a TRIS form part of your total super balance. Upon commencing a TRIS, you can elect to have the TRIS (and income payments) transferred to an eligible dependant following your passing-referred to as a reversionary beneficiary nomination. Rollovers or contributions can't be made to a TRIS once it has been commenced. To receive rollovers or contributions (Super Guarantee and personal), you need to keep an accumulation account open. Earnings (investment income and capital gains) from the assets supporting a TRIS are generally taxed at a maximum rate of 15%. Lump-sum withdrawals can't be made from a TRIS with the exception of, for example, unrestricted non-preserved benefits, family law splits, or commutations/'rollbacks' to an accumulation account. Income payments from a TRIS must be between 4% and 10% of the account balance each year. Please note: The minimum drawdown requirements for retirement income streams, such as a TRIS, has been reduced by 50% for the 2019-20 and 2020-21 financial years. Income payments from a TRIS must be received at least once per financial year (except for the first financial year if you commence the TRIS in June). Please note: You can elect to receive income payments from a TRIS either fortnightly, monthly, quarterly, half-yearly, or yearly. The taxable component of income payments from a TRIS attract a 15% tax offset if you are between preservation age and 59. All income payments are generally tax-free if you are aged 60 or over. Insurance can't be held in a TRIS. To hold insurance, you need to keep an accumulation account open. Retirement phase TRIS An accumulation phase TRIS moves to a retirement phase TRIS when you meet a condition of release with a 'nil cashing restriction', such as permanent retirement, attaining age 65, permanent incapacity, or terminal illness. Please note: Aside from attaining age 65, you generally need to notify your super trustee that you have met one of the conditions of release listed above for the TRIS to move to a retirement phase TRIS-alternatively, you may have the option to commute your accumulation phase TRIS and commence an account-based pension. Importantly, when this move occurs, and with regards to what has been covered above, the following applies: A limit applies to the amount of super benefits that can support a TRIS-referred to as the transfer balance cap, which is currently set at $1.6 million (indexed) per person. Please note: If you only use a portion of the transfer balance cap, the unused portion will be indexed. The transfer balance cap does not apply to any subsequent growth or losses. Earnings from the assets supporting a TRIS are generally exempt from taxation. Lump-sum withdrawals can be made from a TRIS, and paid to you tax-free if you are aged 60 or over. Income payments from a TRIS are no longer subject to the '10% of the account balance each year' limit. However, income payments are subject to the minimum drawdown requirements (see the below table): Please note: The minimum drawndown requirements for retirement income streams, such as a TRIS, has been reduced by 50% for the 2019-20 and 2020-21 financial years. Important considerations By commencing a TRIS, you may be drawing down on your super earlier than expected. This may have long term consequences, such as reducing your balance earlier than anticipated in retirement. Depending on your financial situation, goals and objectives, a TRIS may or may not be appropriate for you. Therefore, it's important to consider seeking professional advice prior to commencing a TRIS. Collins Hume together with Essential Wealth and Retirement is always ready to help, so please contact us on 02 6686 3000 if we can be of any further assistance. Source: Transition to retirement income streams (TRIS). (2020). Retrieved from https://ewar.financialknowledgecentre.com.au/kcarticles.php?id=2856. The information contained on this website has been provided as general advice only. The contents have been prepared without taking account of your objectives, financial situation or needs. You should, before you make any decision regarding any information, strategies or products mentioned on this website, consult your own financial adviser to consider whether that is appropriate having regard to your own objectives, financial situation and needs. Whilst Essential Wealth and Retirement Pty Ltd is of the view the content of this website is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed, and no warranty of accuracy or reliability is given or implied. Therefore, no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Essential Wealth and Retirement Pty Ltd or GPS Wealth Ltd or any officer, agent or employee of Essential Wealth and Retirement Pty Ltd or GPS Wealth Ltd. *Australian Government, Australian Bureau of Statistics. (2020). 6238.0 - Retirement and Retirement Intentions, Australia, 2018-19.

Pssst; want to save some serious money? How long have you had your home loan? When was the last time that you checked the interest rate that you are being charged? Never thought about refinancing, here's why you should. A standard variable rate home loan is being charged 4.39% (comparison rate 4.49%). With a 3-year fixed rate loan available at 2.19% (comparison rate 3.15%) with full offset, how much could making the switch save you? Existing loan: Using a new loan: You save $109,848.96 OR keep the payments the same and you save 7 years and 1 month of repayments.Of course, there may be some costs in refinancing, but many lenders offer a rebate to cover these. Other things to consider: Are you eligible for the 2.19% offer? Will the rate difference remain the same over the life of the loan? Are you looking to sell and buy a new property in the future? Invest some time with a professional mortgage specialist who will work through these questions and others to check if your existing loan is suitable and is best for you. They will also advise you on the best refinance options if a change is in your interests. For full details, call David Seymour Regional Financial Solutions 0418 785 747. The above is general in nature and does not take into account your personal circumstances and position. Authorised Credit Representative 47331. Australian Credit Licence 484980. This is for general use and is indicative only depending on your personal circumstances.

We work to live, we don’t live to work Peter helps transform businesses with astute commercial advice innovation and growth initiatives that help them to thrive. Business constantly evolves and it can be challenging to keep up to date with every change, but Peter sees this as a positive. He loves helping people — personally and financially — to create the life they want and take control. That looks different to everyone so his motto is “Business by design, not by default”. The multi-award-winning accountant and advisor also helps fast-track business success and personally mentors business owners and Boards. Peter is a champion of work/life balance making sure that each client remembers this in their businesses. He is a great believer in working hard, working smart and keeping things in perspective. Peter encourages his clients to take their lifestyle as seriously as they take their business. Peter has been recognised as one of Australia’s business leaders. He also spearheads numerous activities that support local and global charitable causes. “I enjoy the diversity of industry and my interaction with each client,” says Peter. “My approach is to see the greater business picture and then devise long-term strategies to achieve goals.” “Whilst my perspective does not always follow a traditional path, I do consider issues from all angles in order to develop the best solutions.” Peter Fowler MBA CPA B Accounting SSA JP SA Fin Peter Fowler is a highly accomplished professional with a diverse skill set that spans the realms of finance, accounting, and business management. Holding a Master of Business Administration (MBA) and designation as a Certified Public Accountant (CPA), Peter brings a wealth of expertise to the table. Peter is also a Justice of the Peace (JP) and holds designations of SSA and SA Fin. These additional credentials underscore his commitment to upholding the highest standards of professionalism and ethical conduct. Peruse Collins Hume’s Welcome Booklet here »