The
Australian Bureau of Statistics reported that over 2 million Australians
(18%) of those who worked at some time during the year had ceased a
job during 2008. This figure includes people who have resigned, been
made redundant or those who retired from the workforce.
70% of these people ceased employment voluntarily while 30% lost their
job involuntarily.
It is expected that in the current volatile job market that the number
of involuntary job losses will increase during 2009.
HOW WOULD CEASING YOUR JOB AFFECT YOUR SUPERANNUATION?
The critical issues that must be faced and managed on changing jobs
include:
Consolidating your Superannuation
Changing your job offers an opportunity to consolidate and rationalise
your superannuation if you have more than one fund.
By consolidating a number of superannuation funds you may make considerable
savings on fees paid to a number of fund managers. This may result in
a larger balance in your super when you retire.
Dealing with Redundancy
Redundancy can be a stressful and confusing experience for most people.
It is essential that you are aware of the choices and opportunities
that are available for lump sum payments. Lump sum payments can be used
for debt reduction and for future financial planning strategies.
It may be possible for some people to contribute the proceeds of termination
payments to their superannuation as an after tax contribution.
Maintaining Appropriate Life Insurance and Income Protection Cover
When you leave your job you are not usually covered by the death and
disability policy of your previous employer.
With a mortgage to pay, education expenses and increasing living costs
it is essential to maintain adequate insurances to protect you and your
family against unforseen illness and your ability to earn an income.
Most superannuation funds provide insurance cover for members that may
include income protection, total and permanent disablement (TPD) and
death cover, and it is essential that you investigate these options.
Ensuring That Your Wealth Accumulation and Retirement Plans Stay
On Track
While losing a job is an extremely unpleasant experience, it can offer
an opportunity to restructure your financial planning and wealth management
strategies to ensure that your wealth management and retirement strategies
remain on track.
WHAT HAPPENS WHEN I CHANGE JOBS?
It is important that you don’t become a ‘lost member’; this is where
your previous employer rolls your superannuation into a default fund
where you will not have a say in your investment choice and you could
end up paying excessive fees.
Your iPlan adviser is able to assist with all of these issues and help
you take the necessary steps to protect your financial situation should
your employment and superannuation circumstances change.
MANAGING YOUR CREDIT CARD DEBT
Credit cards offer
us a convenient, flexible and secure way to purchase goods and services
that we want now, but pay for at a later date. Unfortunately they can
get out of control, resulting in overspending and debt management problems.
There are a number of useful strategies which will enable you to manage
your credit card debt more effectively and responsibly.
Your iPlan adviser can provide you with a range of strategies that
can help you manage your credit card debt as well as provide you with
an holistic debt management plan.
Market Update - May 2009
Economic News
No Recession! The technical definition of a recession is two consecutive
quarters of negative growth. In the December quarter Australia recorded
negative growth of 0.5%, however the domestic economy recorded growth
in the March quarter with the ABS reporting that the Gross Domestic
Product (GDP) expanded by 0.40%, seasonally adjusted. Economic indicators
released in May were broadly stronger, the Australian Bureau of Statistics
(ABS) announced that the unemployment rate had defied expectations and
had fallen (not risen, fallen to 5.40% - seasonally adjusted) for April
down 0.30% from March, with full time employment increasing by 49,100.
The US unemployment rate has risen to 8.90% in April, a 26 year high,
but there were fewer job losses observed in May, 539,000, the lowest
amount since October 2008. A total of 5.7 million American jobs have
been lost since December 2007.
Australian shares
The Australian sharemarket rose for the third consecutive month in
May. This is the first three-month consecutive gain since August, September
and October 2007 when the sharemarket reached its peak.
The pace of contraction in the global economy has started to ease in
recent months. It appears that economic conditions were at their worst
in the last quarter of 2008 and the first quarter of 2009. The global
policy response has gained traction in recent months. While economic
conditions remain weak there are some economic indicators that are improving.
The mood in the sharemarket remains optimistic. While it is positive
that the market has rallied off its low, the question is what type of
economic recovery has been priced in by the markets. With weaker economic
news ahead, the global and Australian economies have some way to go
before a permanent resumption of economic growth. Once growth starts,
a slow and gradual recovery (sometimes called “U” shaped) is more likely
than a fast paced recovery (called “V” shaped). The hope is that the
sharemarket has factored in a dose of realism in its expectations.
Global shares
The major global equity markets continued to rise in May on better
than expected stress test results and improving economic data. The unprecedented
policy response is beginning to gain traction as the banking system
improves and prices less risk aversion into short term interest rates.
Fixed interest
The Reserve Bank of Australia (RBA) left official interest rates on
hold in May at 3.00%. In leaving interest rates on hold, the RBA noted
that there had been considerable economic policy stimulus which should
help contain the downturn and support an eventual recovery. The Board
believes that should inflation continue to decline over the medium term
that this may present some scope to further ease monetary policy.
Internationally, the focus moved from central bank action to government
debt issues in May as a number of countries released their Budgets.
The highlights are the rising issuance of government debt over the coming
years and the consequent implications for longer term bond yields.
Listed property
The listed property sector continued to show signs of stabilisation,
finishing the month up 3.8%. Out of the 16 stocks in the index, only
three fell in May. The sector has now recorded two consecutive monthly
gains, although it remains down 50.8% over 12 months.
Global property markets also rose in May, although major markets demonstrated
mixed results. Markets in Europe and Asia performed well, particularly
Italy and China. The UK and US property markets were weaker.
Australian Dollar
The Australian Dollar (AUD) appreciated during the month, rising 8.91%
against the US Dollar and finishing the month at US$0.7912. The AUD
was also up against the Japanese Yen (8.00%), the Euro (3.44%), and
the British Pound (0.84%).
(Source documents: Lonsec Research and Colonial First State)
Your Question's Answered
Got a question you would like answered?
Please email your questions
to info@iplan.net.au, or why
not phone one of our financial advisers directly on 13000 IPLAN
(1300 047 526).
iPlan
Financial Services Australia Pty Ltd ACN: 106 591 833 as trustee for
the iPlan Australia Trust ABN: 58 928 175 252 is a Corporate Authorised
Representative of iPlan Financial Services P/L ABN 70 122 979 140 AFS
Licence No. 311824
