It’s the season for gifts, sharing meals and spreading cheer. But what if your festive generosity could do more? What if it could ripple through generations, perhaps shaping futures and maybe reduce your tax bill?

Giving isn’t just an act of kindness; it can also be a smart financial move. From helping loved ones today to creating a legacy for future generations, strategic gifting can align with your broader financial goals.

After all, Australians are generous. We consistently rank among the most charitable in the world with a study showing that, in the past year, 56 per cent of Australians have donated money and 31 per cent have donated their time.ⁱ

Australia, as a wealthy but ageing nation, is well-placed to grow charitable bequests, but the reality is less encouraging. The number of people leaving bequests to charities is low and the size of the bequests also “falls far short of international peers”, according to The Bequest Report by JBWere.ⁱⁱ

Why planned giving matters

Often, giving is reactive rather than planned. We might respond to a donation drive, an emotional TV ad, a friend’s fundraiser or gift property or shares to a family member.

But giving can also be intentional. Some people choose to set aside a portion of their annual income, commit to monthly donations or include charities in their wills. Others join workplace giving programs or support causes that reflect their values. In this way, generosity becomes less about impulse and more of a conscious decision.

There may be advantages in taking a more strategic approach. It can amplify your impact, build your reputation, open doors to new networks and potentially deliver tax benefits. Donations to organisations with deductible gift recipient (DGR) status can help to manage your tax position by reducing taxable income. If you give more than $2 to an organisation with DGR status, you can claim a 100 per cent tax deduction for your donation.ⁱⁱⁱ

Planned giving can help to create a lasting impact, building a legacy for family and community. It integrates generosity into financial planning, ensuring investments reflect personal or family values. In this way, it becomes a tool for involving younger generations in financial governance, teaching responsibility and shared purpose.

Strategic gifting can include early inheritance, education funding or contributions to a family trust. These approaches can reduce future taxes on your estate.

Structured giving options for lasting impact

For those looking to make a lasting impact on their communities, structured giving vehicles offer flexibility and control.

It can create long-term financial stability to favourite causes, providing predictable funding for charities. It can potentially reduce complexity in estate planning and ensure your wishes are carried out; and donating assets may offset capital gains tax liabilities.

Unlike mass market or other forms of giving, such as direct donations to charities, crowd funding and volunteering, structured giving involves using a vehicle designed to enable giving such as:

• Private Ancillary Funds – often used by families and individuals able to make a minimum initial contribution of $500,000 with a plan to grow the fund beyond $1 million.
• Public Ancillary Funds – suitable for those with a lower entry point of $20,000
• Community foundations or giving circles – enable donors to pool resources for local impact. Entry levels can be as low as $2,000.
• Donor Advised Funds or sub funds – a simpler, more flexible structure allowing donors to distribute funds over time. They can be established relatively quickly with some recommending an initial donation of a minimum $20,000.

Structured giving can also occur without using a dedicated vehicle through, for example, corporate cash donations or larger scale and planned contributions from individuals and families.

Giving isn’t just about generosity, it’s about creating a lasting impact.

We can help to create a giving strategy that supports your family and backs the causes you care about.

i World Giving Index | CAF

ii Bequest Report | JBWere

iii Inquiry Report – Future Foundations for giving | Productivity Commission

Many investors breathed a sigh of relief at having survived (and even thrived) the turbulent economic and political events of 2025.

Super funds posted strong double-digit returns for the 2024-2025 financial year. Australia recorded modest economic growth, while inflation cooled a little throughout the year – albeit with a slight uptick at year’s end – and house prices surged before hitting the brakes in December. Share markets reported respectable gains locally and some surging profits globally.

The big picture

Markets and economies around the world have danced to the tune of the Trump Administration’s second term in office and reacted to wars and unrest in the Middle East and Ukraine.

The US President’s often surprising policy twists and turns, particularly a punishing new tariff regime, saw markets falter and exporters of goods and services to the US plunged into uncertainty.

The Australian dollar reflected the choppy conditions, hitting lows just under 0.60 US cents in April before recovering slightly by year ‑end at just under 0.67 US cents, this was buoyed by our strong iron ore exports and the growing demand for lithium, copper and rare earths.ⁱ

The artificial intelligence revolution was another feature of the year, driving US share markets ever higher with some fearing the bubble is overdue to burst. 

Economy

Inflation’s stubborn resistance to the Reserve Bank’s measures to bring it down could lead to further interest rate rises in 2026.

The Consumer Price Index in January recorded an annual rate of 3.4 per cent, down 0.4 per cent on the previous month. The RBA’s flexible inflation target aims to keep the cost of living increases between two and three per cent.

The cash rate began 2025 at 4.35 per cent but after three cuts during the year, it was down to 3.6 per cent in December. The RBA is due to meet in February to consider its next move.

In the US, the Federal Reserve also cut rates three times, putting the interest rate to a range of 3.5 – 3.75 per cent.

The Australian economy grew 2.1 per cent in the year to September in a massive improvement on the previous year’s growth of 0.8 per cent.

Property

After two uneven years, home values surged again in 2025 by 8.6 per cent, adding about $71,500 to the national median.ⁱⁱ

It’s the strongest calendar year performance since the remarkable 24.5 per cent increase in 2021.

However, values softened in December, recording the smallest monthly increase in five months.

Darwin delivered the best performance with an 18.9 per cent gain in values during the year while Melbourne took the wooden spoon with a 4.8 per cent increase.ⁱⁱⁱ

Share markets

Global equity markets proved that they could thrive, even in a higher-interest rate environment, and the AI revolution moved from the hype phase of the previous year to serious players in 2025.

While ‘The Magnificent Seven’ tech stocks have long ruled the S&P 500, in 2025 just two outperformed the index with a gain of 64.8 per cent for Alphabet and 38.9 per cent for Nvidia.^iv

It was a slower pace for Australian markets with the S&P/ASX 200 delivering a solid total return of 6.8 per cent. While the big banks faced some pressure on margins as interest rates peaked, the materials sector was supported by the global energy transition. Dividend yields remained attractive, continuing Australia’s tradition of providing reliable income for retirees and SMSFs.

Commodities

Precious metals drove commodity values in the past year with investors looking for security amid interest rate movements and geopolitical tensions.

Silver was up by an astonishing 182 per cent during the year, but a sell-off in December saw the price finish the year with a 147 per cent gain.^v

Meanwhile, gold’s safe haven status during times of uncertainty saw it jump by 65 per cent during the year.

Looking ahead

It seems likely the issues that dominated the financial markets in 2025 will continue to shape performance and returns this year.

Global politics and war are likely to move commodity prices and equity markets while the contrariness of US foreign policy will both spook and buoy investors.

In Australia, all eyes will be on the RBA, with high levels of speculation as to where interest rates will be heading in 2026.

i Australian Dollar | Trading Economics

ii Home Value Index: Softer landing after strong 2025

iii Home Value Index: Softer landing after strong 2025

iv Which Magnificent 7 Stock Had the Best Year in 2025? | Investing.com

Ageing is a natural part of life, and with it often comes a reduced ability to manage everyday tasks, especially at night. The same is true for people living with disabilities who may need extra support with mobility, safety or personal care. While daytime assistance is valuable, nighttime brings its own challenges and risks.

Overnight home care gives families peace of mind. Whether it’s part of 24-hour care, short-term support or live-in services, overnight care offers safety, comfort and dignity during the hours when people are most vulnerable.

This article explores why families across Australia value overnight care, the benefits it brings, and how to decide whether it’s the right option for your loved one.

When should you consider overnight care?

Choosing overnight care requires careful thought. It starts with understanding your loved one’s needs:

• Do they struggle to move safely around the home at night?
• Do they wake frequently, feel anxious or experience disorientation?
• Do they feel lonely or isolated during the day or evening?
• Are you, as their carer, finding it difficult to get proper rest?

Once you understand their needs, speaking with a trusted home care provider can help you explore your options. A good provider will guide you through available services, explain funding options, and work with you to create a personalised care plan.

Overnight care isn’t just practical, it’s an act of care, offering safety, comfort and dignity when it matters most.

Key benefits of overnight care for seniors and people living with disabilities

1. Relief for family carers

Providing care for a loved one can be demanding, especially when it affects your sleep and wellbeing. Overnight care gives family members the chance to rest, recharge and maintain a healthy routine. Whether used occasionally or full-time, the support is often life-changing for carers.

2. Access to support funding

Many families worry about the cost of care, but there are several funding options available in Australia. Programs such as Government-Funded Support at Home Program can help cover overnight care, 24-hour home care and other essential services.

A reputable care provider can help navigate funding applications, explain subsidies, and clarify private care costs so you always know what to expect.

3. Safety and comfort throughout the night

Nighttime is when falls, confusion and health complications are most likely to occur, particularly for those with mobility issues, dementia or chronic illnesses.

Overnight care provides active support with:

• toileting
• repositioning
• mobility around the home
• medication needs
• wound or post-surgery care (with registered nurses where required)

Having trained professionals on hand helps prevent accidents and ensures your loved one feels safe and supported.

4. Peace of mind for families

Knowing that a trained professional is caring for your loved one at night allows families to sleep soundly. It also gives carers time for respite, helping them maintain their own health and balance their responsibilities.

5. Emotional wellbeing and companionship

Ageing and disability can lead to feelings of loneliness and isolation. A compassionate in-home care support worker can make an enormous difference, providing conversation, reassurance and emotional connection.

Many families find that overnight carers become trusted companions, offering both practical help and genuine human connection.

6. Supporting independence

Contrary to common belief, overnight care can actually enhance independence. With the right support in place, people can continue living at home safely instead of moving into residential aged care.

Overnight care bridges the gap between full independence and more intensive care services, helping individuals maintain choice and control.

Additional benefits of overnight home care

• continuity of care that improves long-term health outcomes
• flexible services tailored to personal needs
• dementia-friendly support programs
• transparent costs and quality assurance
• comprehensive support throughout the night

Overnight home care is not the same as full 24-hour support, but it plays a vital role in ensuring safety, comfort and wellbeing throughout the night. The right overnight care service can transform the experience for both clients and families, making nights calmer and more secure.

Before making a decision, discuss your needs with a trusted provider, explore available funding options, and determine whether programs like the Support at Home Program may help.

Thoughtful planning and the right support can bring lasting peace of mind for your entire family.

Source:
This article was originally published on https://www.agedcareguide.com.au/talking-aged-care/why-overnight-home-care-matters-for-seniors-and-their-families. Reproduced with permission of DPS Publishing.
Important:
This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.
Any information provided by the author detailed above is separate and external to our business. Our business does not take any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

In a world of constant financial noise, from market updates and interest rate speculation to economic forecasts, it’s easy to feel overwhelmed and choose to do nothing.

But inaction can be costly when it comes to building long-term wealth. Whether it’s leaving money in cash, delaying investment decisions or ignoring the power of regular contributions, the financial consequences of sitting still can quietly erode your future goals.

Inflation is a wealth killer

One of the most overlooked risks of doing nothing is inflation. While your money might feel ‘safe’ sitting in a savings account or term deposit, its purchasing power is shrinking every year.

For example, if you’d tucked $10,000 under the mattress in 2014, ten years later in 2024 it was worth just $6926.70 in real terms, thanks to the average annual inflation rate of 2.7 per cent. That’s a 30.7 per cent loss in value without spending a cent.ⁱ

Even in low-inflation environments, the real return on cash is often negative once you factor in tax and inflation.

The ‘cost’ of cash

Holding too much cash for too long can be a drag on your portfolio’s performance. While cash plays an important role, it’s not designed for long-term growth.

Consider this:

• Over the past 30 years, Australian shares have returned an average of 9.3 per cent per year, while cash has returned 4.1 per cent annually.ⁱⁱ
• That difference compounds significantly over time. Based on those rates, $100,000 invested in shares could grow to approximately $1.4 million in 30 years, while the same amount in cash might only reach around $330,000.

By staying in cash, investors miss out on the growth potential of other asset classes.

The perils of ‘set and forget’

Many investors start out with good intentions. They set up a portfolio, make an initial contribution and then leave it untouched for years.

While long-term investing is a sound strategy, neglecting your portfolio entirely can lead to missed opportunities.

Here’s what you need to be aware of:

• Asset allocation changes – Market movements over time can affect your portfolio’s intended risk profile.
• Dividends – If dividends are paid out and not reinvested, you lose the benefit of the compounding effect.
• Changing goals – Your financial needs are likely to change as you age, but your portfolio won’t reflect that unless it’s reviewed.

Annual check-ups can help ensure your investments are still working for you.

Missed opportunities

Compound interest is one of the most powerful tools in wealth creation. But compounding works best if you’re consistently contributing and reinvesting.

Consider two hypothetical investors who both invest $10,000 earning an average 7 per cent per annum:

• Investor A contributes an extra $5,000 each year
• Investor B contributes nothing after the initial $10,000 investment

After 30 years (and not accounting for fees and other costs):

• Investor A may end up with more than $500,000
• Investor B may end up with around $76,000

The difference? Regular contributions and the magic of compounding.

You can do your own calculations with ASIC’s MoneySmart calculator.

From passive wealth to active growth

The cost of doing nothing can be even more pronounced for high-net-worth investors. With larger sums at play, the opportunity cost of holding excess cash or delaying strategic investment decisions can translate into millions of dollars in missed growth over time.

While capital preservation is important, so is capital productivity. Allocating funds across diversified asset classes can help balance risk while enhancing long-term returns.

Inaction, especially in times of market uncertainty, may feel prudent, but it often results in underutilised capital that fails to keep pace with inflation or evolving financial goals.

After all, your financial plan should evolve with you. A portfolio designed five years ago may no longer suit your goals, risk tolerance or tax situation. Life changes – marriage, children, career shifts, retirement planning – and your investments should reflect those changes.

The bottom line

Doing nothing might feel safe but it’s often the riskiest choice of all. Inflation erodes your savings; cash underperforms over time and missed opportunities can delay or derail your financial goals.

By taking small, consistent steps such as contributing regularly, reinvesting earnings and reviewing your plan regularly, you can build a strong foundation for long-term financial success.

We’re here to help you take control and make your money work harder for your future.

i Inflation Calculator | RBA

ii Vanguard index chart 2025

What role will an inheritance play in your long-term wealth strategy?

If the ballpark numbers are at least remotely close, the amount of assets set to be transferred from one generation to the next in Australia over the coming decades will amount to trillions of dollars.

According to estimates within a 2021 Productivity Commission report, Australians aged 60 and over will transfer $3.5 trillion or an average of about $175 billion per year in wealth in the next two decades. A 2024 report by JBWere Australia had an even higher estimate of $5.4 trillion for likely wealth transfers in Australia over the next 20 years.

The largest part of this great wealth transfer will be between members of the “Baby Boomer” generation (people born just after the end of World War II through to 1964) and their children and other heirs.

It will include family homes, investment properties, superannuation money, direct shares and a wide range of other financial and non-financial assets.

The value of inheritances is not only likely to grow dramatically as wealth levels increase but it will be an increasingly important source of future income and assets for younger generations.

Show me the money

Vanguard’s 2025 How Australia Retires research found that 21% of working-age Australians and 8% of retirees expect to use an inheritance as a source of their retirement income.

Furthermore, 13% of working-age Australians and retirees said the family home would become an inheritance for their beneficiaries or children and they planned to keep it within the family when they died.

The conversation around inheritances interweaves with Australian government research that many Australians are not exhausting their superannuation savings before they die.

The 2023 Intergenerational Report found that most retirees draw down at the legislated minimum drawdown rates.

“This results in many retirees leaving a significant proportion of their balance unspent, for example, a single retiree drawing down at the minimum rates would be expected to still have a quarter of their retirement assets at death,” the report noted.

Treasury estimates in the 2020 Retirement Income Review included projections from Treasury that outstanding superannuation death benefits could increase to just under $130 billion in 2059, assuming there’s no change in how retirees draw down their superannuation balances.

A touchy subject

Australians collectively had around $17.7 trillion in household wealth at 30 June 2025 according to Australian Bureau of Statistics data, including property and other investments, cash deposits, and superannuation.

Meanwhile, the 2025 UBS Global Wealth Report showed we ranked second in the world for median wealth per adult at US$268,424, and fifth for average wealth per adult at US$516,640.

There’s potentially a lot of household money to go around, and a lot to be inherited.

But inheritance planning, unlike succession planning within a business, is an area that’s rarely discussed at the family level.

Most families regard subjects such as death and the future division of wealth as unpleasant, and potentially sensitive when multiple heirs are involved.

But there’s a lot to be said for having open discussions within your family about the intended treatment of assets and future inheritances.

Creating a valid will, and specifically documenting how you want your assets to be managed and divided after your death, should be a key step in the inheritance planning process.

Residential real estate and superannuation, which combined make up more than three quarters of total household assets, are the largest components of most inheritances.

Ensuring that any superannuation you have left over at the time of your death is distributed according to your wishes requires you to complete a binding death benefit nomination form provided by your super fund.

Seek professional advice

It’s important to be aware of any potential tax implications. For example, while superannuation distributed to a surviving spouse or dependent children is generally tax free, non-dependents (including adult children) may be required to pay tax on amounts they receive.

Those inheriting assets such as property and financial securities may also face tax issues.

Estate planning can be complex. Consulting a licensed financial adviser to help you and your intended beneficiaries map out an inheritance framework that also identifies issues such as potential tax liabilities is a prudent step.

Source: Vanguard November 2025

This article has been reprinted with the permission of Vanguard Investments Australia Ltd. Copyright Smart Investing

GENERAL ADVICE WARNING
Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) (VIA) is the product issuer and operator of Vanguard Personal Investor. Vanguard Super Pty Ltd (ABN 73 643 614 386 / AFS Licence 526270) (the Trustee) is the trustee and product issuer of Vanguard Super (ABN 27 923 449 966).
The Trustee has contracted with VIA to provide some services for Vanguard Super. Any general advice is provided by VIA. The Trustee and VIA are both wholly owned subsidiaries of The Vanguard Group, Inc (collectively, “Vanguard”).
We have not taken your or your clients’ objectives, financial situation or needs into account when preparing our website content so it may not be applicable to the particular situation you are considering. You should consider your objectives, financial situation or needs, and the disclosure documents for the product before making any investment decision. Before you make any financial decision regarding the product, you should seek professional advice from a suitably qualified adviser. A copy of the Target Market Determinations (TMD) for Vanguard’s financial products can be obtained on our website free of charge, which includes a description of who the financial product is appropriate for. You should refer to the TMD of the product before making any investment decisions. You can access our Investor Directed Portfolio Service (IDPS) Guide, Product Disclosure Statements (PDS), Prospectus and TMD at vanguard.com.au and Vanguard Super SaveSmart and TMD at vanguard.com.au/super or by calling 1300 655 101. Past performance information is given for illustrative purposes only and should not be relied upon as, and is not, an indication of future performance. This website was prepared in good faith and we accept no liability for any errors or omissions.
Important Legal Notice – Offer not to persons outside Australia
The PDS, IDPS Guide or Prospectus does not constitute an offer or invitation in any jurisdiction other than in Australia. Applications from outside Australia will not be accepted. For the avoidance of doubt, these products are not intended to be sold to US Persons as defined under Regulation S of the US federal securities laws.
© 2025 Vanguard Investments Australia Ltd. All rights reserved.

Ready to retire… but not quite yet? We break down three reasons why a TTR pension might be worth considering.

Retirement isn’t a switch you flick — it’s a journey. And if you’ve reached 60 and you’re not quite ready for retirement, a Transition to Retirement (TTR) pension could be your secret weapon for making that journey smoother, and more financially flexible.

What is a TTR pension?

A TTR pension is a way to access some of your super while you’re still working, and before you’ve met one of the ‘conditions of release’ that qualify you for entire access to your retirement savings. It’s designed for people who want more flexibility with their finances and lifestyle as they approach retirement.

Here are three reasons why it might be worth considering:

1. You can ease into retirement without easing off your current lifestyle

Let’s be honest — going from full-time work to full-time leisure can feel like a big leap. A TTR pension lets you take it slow. You can reduce your working hours and use your super to top up your income, so you’re not sacrificing your lifestyle while you gain back some time.
Think of it as a financial cushion that supports your transition — whether that means working three days a week, spending more time with grandkids, or finally starting that pottery class.

2. Boost your take-home pay and grow your super – all at once

Still working full-time and not ready to slow down? A TTR strategy could help you do both: increase your take-home pay now and grow your super for later. By combining a TTR pension with salary sacrifice, you might reduce the tax you pay — since contributions are taxed at just 15% — and use your pension income to balance your budget. It’s a smart way to make the most of your final working years without feeling the pinch in your day-to-day finances.

Just keep in mind: this can be a complex strategy, and it might not suit everyone. It’s a good idea to speak with us to make sure it’s right for your situation.

3. You stay in control of your retirement journey

One of the best things about a TTR pension? Flexibility. You can adjust your payments (within the minimum and maximum limits), pause or restart the pension, or convert it to a full retirement pension when you’re ready. It’s not a one-size-fits-all solution — it’s a tool you can tailor to your lifestyle, your goals, and your timeline

A TTR pension and a retirement phase pension are both types of income streams from your super, but they serve different purposes and have different rules.

Want to make sure your super is set up for your stage of life? Explore this article for practical tips and insights to help you get started.

Important things to consider

Before jumping into a TTR pension, here are a few practical things to keep in mind:

• Keep your super account open
  You’ll still need a regular super account to receive employer contributions (or any other contributions), as these can’t go directly into a pension account.
• Check your insurance cover
  If you have personal cover linked to your super accumulation account, you may want to keep that account active to maintain it. Talk to your super provider, or contact us about your insurance options before starting your pension.
• Know when your TTR pension enters retirement phase
  Your TTR pension will automatically move into retirement phase when certain conditions are met — like fully retiring or turning 65. When that happens, your pension balance will count towards your transfer balance cap, which limits how much you can move into tax-free retirement income streams.
• Minimum and maximum withdrawals
  When you start a TTR pension, you’re required to withdraw an income within set limits each financial year – even if the pension starts part-way through the year.

  – Minimum withdrawal: 4% of your TTR pension balance
  – Maximum withdrawal: 10% of your TTR pension balance

  These percentages are based on your account balance as at 1 July each financial year and apply for the full year.

  – Pro-rata calculation: if starting a TTR pension part-way through a financial year, the 4% and 10% calculations are pro-rata based on the number of days remaining in the year.

These limits are set to ensure that retirement savings are used to fund your retirement, not left indefinitely in tax-free environments. It is essential to understand these limits to ensure compliance with tax obligations and to manage retirement income effectively.

So, is a TTR pension right for you?

Everyone’s situation is different, and while a TTR pension can be a smart move, it may not be the right fit for everyone. That’s why it’s a good idea to speak with a financial adviser before making any changes. They can help you understand how a TTR strategy can work with your broader retirement plan.

Need help?

We can answer your super questions and set you on your path to achieve your retirement goals.

The information in this article is current as at November 2025 and may be subject to change.
This article has been prepared by NULIS Nominees (Australia) Limited ABN 80 008 515 633 AFSL 236465 (NULIS) as trustee of the MLC Super Fund ABN 70 732 426 024 (Fund). NULIS is part of the Insignia Financial group of companies comprising Insignia Financial Ltd ABN 49 100 103 722 and its related bodies corporate (‘Insignia Financial Group’). This information may constitute general advice. The information in this article is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider obtaining independent advice before making any financial decisions based on this information. It is recommended that you consider the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD) before you make any decisions about your superannuation. You can obtain the latest copy of the PDS (or other disclosure documents) and TMD by calling us on 132 652 or by searching for the applicable product at mlc.com.au. You should not rely on this article to determine your personal tax obligations. Please consult a registered tax agent for this purpose. Opinions constitute our judgement at the time of issue. The case study examples (if any) provided in this article have been included for illustrative purposes only and should not be relied upon for decision making. Subject to terms implied by law and which cannot be excluded, neither NULIS nor any member of the Insignia Financial Group accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in the information in this communication.

Few investment sectors combine geopolitical intrigue, technological innovation and long-term growth potential quite like rare earth elements (REEs).

For Australians, the recent deal with the United States to supply rare earths to seed US$8.5 billion worth of new projects, has thrust the sector into the spotlight.ⁱ

What are rare earths?

Rare earth elements are a group of 17 metallic elements that, despite the name, are not particularly rare but are difficult and costly to refine. Their unique properties are essential in the powerful magnets that drive electronic devices such as headphones, speakers and computers, wind turbine generators, electric vehicles and medical technology such as magnetic resonance imaging (MRI).ⁱⁱ

Almost half of the world’s known reserves of rare earths are in China. It’s estimated 44 million metric tonnes dwarf our 5.7 million and the 1.9 million in the United States. Brazil has about 21 million metric tonnes.ⁱⁱⁱ

Production and processing

Reserves are one thing but production and processing is what makes the difference for investors.

China is leading the field by a wide margin. It extracted and processed some 270,000 tonnes in 2024. The US was next with 45,000 tonnes, followed by Myanmar (31,000) and Australia, Nigeria and Thailand, each on 13,000 tonnes.^iv

Australia’s strategic position

The deal recently signed in Washington – the US-Australia Framework for Securing Supply of Critical Minerals and Rare Earths – commits both countries to investing at least US$1 billion each over the next six months to accelerate mining, processing and supply chain development for critical minerals.

Two of the projects were announced by Prime Minister Albanese after his recent meeting with US President Trump.

One project, the Alcoa-Sojitz Gallium Recovery project in Western Australia, will provide up to 10 per cent of total global supply of gallium, essential for defence and semiconductor manufacturing.

The second, the Arafura Nolans project in the Northern Territory, aims to supply 5 per cent of global rare earth demand by 2029.^v

A recently announced third project, Astron Corporation’s Donald Rare Earth and Mineral Sands project in western Victoria, is expected to become the fourth-largest rare earth mine in the world outside China.^vi

The landmark Australia-US deal is a response to China’s dominance in the rare earths market and Beijing’s recent export restrictions on rare earths, which have left many nervous about vulnerabilities in the supply chains for defence and high-tech industries.

Investment opportunities and risks

For some investors, rare earths may be seen as a long-term opportunity given a prediction by the International Energy Agency that demand could double by 2040.^vii

There are several ways to invest including:

• Directly in ASX-listed companies such as Lynas Rare Earths (LYC), Arafura Rare Earths (ARU) or Iluka Resources (ILO)
• Through exchange traded funds (ETFs) or managed funds that offer exposure to rare earths miners and processors
• In private equity and venture capital. For high-net-worth investors, early stage mining and processing ventures may offer high risk, high reward potential

Of course, there are risks worth considering including geopolitical volatility, growing environmental concerns over the high water and energy demands, and China’s ability to flood the market or further restrict exports, which could cause price volatility.

In any case, patience will be required. Mines can take as long as seven years to become operational.^viii

The bottom line for investors is while rare earths are a sector still maturing, they are critical to a range of industries and expected to increase in value over the next decade. However, their share prices are sensitive to global headlines, politics and policy changes, so volatility is to be expected – particularly in the current environment.

As always, there is a lot to consider when weighing up investment opportunities and we are here to discuss any aspect of your investment strategy.

i Historic critical minerals framework| Prime Minister of Australia

ii What Are Rare Earth Minerals Used For? | The Institute for Environmental Research and Education

iii, iv Mapping rare earth supplies | ABC News

v Historic critical minerals framework| Prime Minister of Australia

vi Donald rare earth mine given major project status | ABC News

vii Outlook for key minerals | IEA

vii Many details remain buried in Australia-US rare earths deal | Crikey

A sudden death can place financial stress on those who depend on you. If this happens, life cover can help them pay the bills and other living expenses.

What is life cover

Life cover is also called ‘term life insurance’ or ‘death cover’. It pays a lump sum amount of money when you die. The money goes to the people you nominate as beneficiaries on the policy. If you haven’t named a beneficiary, the super trustee or your estate decides where the money goes.

Life cover may also come with terminal illness cover. This pays a lump sum if you’re diagnosed with a terminal illness with a limited life expectancy.

Important: Accidental death insurance is different from life cover. It will only pay out if you die from an accident. It will not provide cover if you die from an illness, disease or suicide. This type of cover often has a lot of exclusions.

To understand what’s covered under a policy and the exclusions, read the product disclosure statement (PDS).

Decide if you need life cover

If you have a partner or dependents, life insurance can help repay debt and cover living costs if you die.

If you don’t have a partner, or people who depend on you financially, you may not need life cover. But consider getting trauma insurance, income protection insurance or total and permanent disability (TPD) insurance in case you get sick or injured.

How much life cover you might need

To decide how much life cover to get, consider how much money you or your family would:

• need — to pay the mortgage, credit cards and any other debts, child care, school fees and ongoing living expenses
• receive — from super, savings, the sale of any investments, your paid leave balance, and support from your extended family

The difference between these is the amount of cover you should get.

If you need help deciding if you need life cover, and how much, speak to us.

How to buy life cover

Check if you already hold life insurance through super. Most super funds offer default life cover that’s cheaper than buying it directly. You can increase your level of cover through your super fund if you need to.

You can also buy life cover from:

• a financial adviser
• an insurance broker
• an insurance company

Life cover can be bought on its own or packaged with trauma, TPD or income protection insurance. If it’s packaged, your life cover may be reduced by any amount paid on other claims in the package. Check the PDS or ask your insurer.

Life cover premiums

You can generally choose to pay for life cover with either:

• variable age-stepped premiums (previously known as ‘stepped premiums’) — are based on your age and recalculated at each policy renewal. Generally, this means that the cost of your cover will increase as you get older because there is a higher chance of making a claim as you age.
• variable premiums (previously known as ‘level premiums’)— charge a higher premium at the start of the policy, but changes to the cost aren’t based on your age, so increases generally happen more slowly over time.

Your choice of variable age-stepped or variable premiums has an impact on how much your premiums will cost now and in the future.

Regardless of which way you choose to pay for your cover, premiums are not guaranteed and may change annually. Speak to your insurer or read the PDS for more information.

Compare life cover

Once you know how much life cover you need, shop around and compare:

• benefits and policy features
• exclusions
• waiting periods before you can claim
• limits on cover
• the cost of the premiums — now and in the future

A cheaper policy may have more exclusions, or it may become more expensive in the future. You can find information about the policy on the insurer’s website or in the product disclosure statement (PDS).

What you need to tell your insurer

An insurer will ask you questions when you apply for or change your insurance. These questions may be about your:

• age
• job
• medical history
• family history, such as a history of disease
• lifestyle (for example, if you’re a smoker)
• high-risk sports or hobbies (such as skydiving)

If an insurer doesn’t ask for your medical history, it may mean that the policy has more exclusions or narrower policy definitions.

The information you provide will help the insurer to decide:

• if they should insure you
• how much your premiums will be
• terms and conditions for your policy

It is important that you answer the questions honestly. Providing misleading or incomplete answers could lead an insurer to cancel or vary your cover, or decline a claim you make.

Making a life cover claim

If someone close to you dies and you need to make a claim, or if you need to make a terminal illness claim, see how to make a life insurance claim.

Source:
Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at https://moneysmart.gov.au/how-life-insurance-works/life-cover
Important note: This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.  Past performance is not a reliable guide to future returns.
Important
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.