Find Maroondah - February 2026 Edition by Find

MAROONDAH

By Joe Lam

COLUMNIST CONTRIBUTORS

COPYWRITER / ACRREDITED EDITOR

Are you our next Copywriter? ?

Are you our next Wedding Planner? ? ?

Are you our next Life Coach?

Are you our next Bookkeeper? ?

CLUB SPONSORS

joanna srtybosch

erryn langley

About the Find Maroondah

By Warren Strybosch

The Find Maroondah is a community paper that aims to support all things Maroondah. We want to provide a place where all Not-For-Profits (NFP), schools, sporting groups and other like organisations can share their news in one place. For instance, submitting up-andcoming events in the Find Maroondah for Free.

We do not proclaim to be another newspaper and we will not be aiming to compete with other news outlets. You can obtain your news from other sources. We feel you get enough of this already. We will keep our news topics to a minimum and only provide what we feel is most relevant topics to you each month.

We invite local council and the current council members to participate by submitting information each month so as to keep us informed of any changes that may be of relevance to us, their local constituents.

We will also try and showcase different organisations throughout the year so you, the reader, can learn more about what is on offer in your local area.

To help support the paper, we invite local business owners to sponsor the paper and in return we will provide exclusive advertising and opportunities to submit articles about their businesses. As a community we encourage you to support these businesses/columnists. Without their support, we would not be able to provide this community paper to you.

Lastly, we want to ask you, the local community, to support the fundraising initiatives that we will be developing

The

and rolling out over the coming years. Our aim is to help as many NFP and other like organisations to raise much needed funds to help them to keep operating. Our fundraising initiatives will never simply ask for money from you. We will also aim to provide something of worth to you before you part with your hard-earned money. The first initiative is the Find Cards and Find Coupons – similar to the Entertainment Book but cheaper and more localised. Any NFP and similar organisations e.g., schools, sporting clubs, can participate.

We value your support,

The Find Maroondah Team.

Maroondah

EDITORIAL ENQUIRES: Warren Strybosch | 1300 88 38 30 editor@findmaroondah.com.au

PUBLISHER: Issuu Pty Ltd

POSTAL ADDRESS: 248 Wonga Road, Warranwood VIC 3134

ADVERTISING AND ACCOUNTS: editor@findmaroondah.com.au

GENERAL ENQUIRIES: 1300 88 38 30

EMAIL SUPPORT: editor@findmaroondah.com.au

WEBSITE: www.findmaroondah.com.au

OUR NEWSPAPER

The Find Maroondah was established in 2019 and is owned by the Find Foundation, a Not-For-Profit organisation with a core focus of helping other Not-For-Profits, schools, clubs and other similar organisations in the local community - to bring everyone together in one place and to support each other. We provide the above organisations FREE advertising in the community paper to promote themselves as well as to make the community more aware of the services these organisations can offer. The Find Maroondah has a strong editorial focus and is supported via local grants and financed predominantly by local business owners.

ALL THINGS MAROONDAH

The City of Maroondah is a local government area in Victoria, Australia, in the eastern suburbs of Melbourne. Maroondah had a population of approximately 118,000 as of the 2019 report, comprising 9,000 businesses and nearly 46,000 households. The City of Maroondah was created through the amalgamation of the former cities of Ringwood and Croydon in December 1994.

ACKNOWLEDGEMENT

The Find Maroondah acknowledge the Traditional Owners of the lands where Maroondah now stands, the Wurundjeri people of the Kulin nation, and pays respect to their Elders - past, present and emerging - and acknowledges the important role Aboriginal and Torres Strait Islander people continue to play within our community.

DISCLAIMER

Readers are advised that the Find Maroondah accepts no responsibility for financial, health or other claims

Melbourne Welcomes the Lunar New Year, A Vibrant Start to 2026!

By Joe Lam

As February arrives, Melbourne is ready to burst into colour, culture, and celebration for the 2026 Chinese Lunar New Year. The city comes alive, from 17 to 20 February, with lively lion dances, festive markets, and cultural performances. Locals and visitors alike will have the perfect opportunity to connect, celebrate, and embrace the diversity that makes Melbourne unique.

Melbourne’s Chinatown, The Heart of the Festivities

The centre of Melbourne’s Lunar New Year celebrations is Chinatown along Little Bourke Street. Organisers, including the City of Melbourne, local cultural groups, and community volunteers, work hard to bring this annual event to life. Visitors can enjoy dragon and lion dances, live music, lantern displays, and family-friendly workshops that immerse everyone in Chinese traditions.

These celebrations have a significant impact. They draw thousands of people from across Victoria and beyond, boosting local businesses, promoting cultural understanding, and creating a joyful atmosphere that reflects Melbourne’s multicultural spirit. Families, tourists, and locals come together to experience the excitement and warmth of the Lunar New Year.

Getting Around During the Celebrations

With streets in and around Chinatown often closed to traffic during the main events, including Little Bourke Street, Swanston Street near Chinatown, and nearby laneways, visitors should

plan accordingly. Public transport is highly recommended. Flinders Street Station, Melbourne Central, and Flagstaff train stations provide easy access. Pedestrian access to most areas remains open, and event signage helps guide visitors safely.

Where to Stay and Dine in Melbourne

For those staying in the city to enjoy the festivities, CBD hotels near Flinders Lane or the Docklands offer easy access to Chinatown, cultural landmarks, and family-friendly attractions.

Melbourne is known for its food, and the Lunar New Year period is no exception. Chinatown restaurants serve festive specials alongside traditional favourites. Nearby laneways feature cafés, dumpling houses, and Asian fusion eateries that are perfect for family gatherings or a special night out. For a casual bite, Queen Victoria Market and the surrounding streets have food stalls and pop-ups celebrating the season.

A Bright Start to the Year

The 2026 Chinese Lunar New Year in Melbourne is more than a cultural festival; it’s a celebration of community, diversity, and togetherness. Whether you’re watching a dragon dance, sampling delicious food, or wandering through lantern-lit streets, the event offers a chance to connect, reflect, and look forward to a year filled with energy and opportunity.

Here’s to a joyful, prosperous Year of the Horse; may it bring happiness, growth, and shared celebration to every corner of Melbourne!

Peace of Mind When Travelling

NATUROPATHY

By Kathryn Messenger

If you’re like me, you probably take herbs and supplements regularly, if not daily. When it’s time to go on a holiday, it can be difficult to choose what to take. Do I take them all? Do I leave them all at home, or something in between?

When I travel, I want to be ready for common issues that might happen outside, like injuries, bites, and stings. I also want to prepare for specific illnesses, such as travel sickness and stomach bugs. Additionally, I want to be prepared for more typical problems like headaches, nausea, and colds or flu.

Usually, I just take my homeopathic first-aid kit; it is a kit of 20 remedies that have multiple actions, meaning they are helpful for more than one ailment. This kit has remedies to improve travel sickness, injuries, bites/stings, digestive issues, colds/flu and so much more. The instructions are very easy to follow, allowing you to select the best remedy based on your symptoms.

I also have a smaller travel homeopathic kit with just 7 remedies, which still covers a wide range of ailments. I formulated it specifically thinking about what health issues may crop up when travelling or on holidays.

Homeopathy is a gentle system of medicine that originated in Germany, and gently stimulates your body to heal, but just because it’s gentle, it doesn’t mean it’s not powerful! On multiple occasions, I have seen injuries that were in the early stages of very severe bruising turn to almost nothing after a few doses of homeopathic arnica. I also have many patients who use homeopathy for mental and emotional issues, and tell me that it has changed their lives.

The selection of a remedy is based on the presenting symptoms, and the nuances between the symptoms will determine the best choice. You will know you have selected the correct remedy if the symptoms start to reduce. If there has been no change at all after a few hours, you can go back to the instructions and try a different remedy.

Homeopathy is decreasing in popularity in the Western world, not because it is ineffective, but because it is cheap to make and can’t be patented. This means that no one can make their fortune off of it, which leads to very little money available for research and promotion. However, homeopathy is thriving in India, a country where the government doesn’t have the money to subsidise expensive medications, and is looking for a safe, cheap and effective option. Many medical doctors in India treat only with homeopathy and there are homeopathic hospitals set up to treat people with this modality.

If you’ve never tried homeopathy before, I would recommend starting with something like arnica, which is used for bruising, and once you’ve seen the results, there’s no turning back!

If you’re interested in purchasing a homeopathic first, aid kit, you can do so here or send me an email

ACCOUNTANT

By Warren Strybosch

What the ATO are targeting and how to avoid them.

Over 25 years ago, I got into financial planning because someone was promoting a scheme in the area where I lived. The scheme was closed down but unfortunately for many investors that damage had already been done. The result was that many people lost their money and their homes, and some couples ended up divorcing over the whole affair. Everyone involved went through a very stressful time, and I believe some of them still experience trauma or residual stress today.

From that day on, I made it my mission to be proactive in helping ATO and ASIC whenever I identified someone who was committing fraud, running a scheme or simply just flagrantly breaking the law.

With changes in the law, accountants and financial planners are required to basically ‘dob’ in someone whom they suspect of breaching the law or their respective code of conduct. Unfortunately, this has not stopped people from continuing to find ways to take advantage of others.

People have previously questioned why I bother. My response is that everyone should be bothered because we all should be actively trying to protect consumers, especially when it comes to dealing with people’s money.

I won't ignore a promoter's actions if I think they're exploiting people, even if it means losing friends or family over it simply because they do not or do not want to understand.

In November 2025, the ATO issued repeated warnings about "tax and super schemes" being promoted by advisers, accountants, solicitors, mortgage brokers, and other intermediaries ranging from mass-market advertisements to boutique arrangements tailored for wealthy individuals or companies. These schemes often promise significant tax savings, such as reducing taxable income, increasing deductions or offsets, inflating refunds, or even allowing early access to superannuation benefits.

These schemes often rely on complex or contrived financial or legal structures, designed not to reflect genuine economic activity but to distort how funds flow — purely for tax benefit.

The ATO’s position is clear: such arrangements are risky, often unlawful, and subject to cancellation, penalties, and even criminal prosecution.

Below we outline in more detail how such schemes tend to operate, with a focus on the ESIC context, why the ATO is cracking down, and what taxpayers or advisers should do to avoid falling foul.

What ATO Is Targeting for 2026:

1.Artificial “Tax-Avoidance” and “Super-Access” Schemes

Schemes that claim to provide benefits may be promoted.

• Reduce a participant’s taxable income;

• Increase deductions against income;

• Inflate offsets or refunds;

• Provide early or unlawful access to superannuation benefits;

• Completely avoid tax or other obligations.

Such schemes might use complex transactions or unusual fund flows to create a semblance of legitimacy when, economically, nothing substantial has changed.

Often these schemes are aggressively marketed via online ads, social media, or promotions by advisers guaranteeing “big tax savings” with apparently little risk.

2. Abusive Use of the ESIC / Early-Stage Investor Tax Offset Regime

One of the specifically flagged areas is misuse of the ESIC/early-stage investor tax offset regime. The Early Stage Investor Tax Offset was introduced to encourage genuine investment in early-stage, innovative companies. Under this regime, investors who purchase new shares in a qualifying ESIC may — if all conditions are met — access:

• A non-refundable carry-forward tax offset equal to 20% of the amount invested (subject to caps).

• Special capital gains tax (CGT) treatment: capital gains on qualifying shares held between 12 months and up to 10 years may be disregarded; conversely, capital losses may also be disregarded under certain conditions.

That’s a legitimate scheme — but what the ATO is targeting are artificial or circular financing arrangements structured solely to claim those tax benefits — with little or no genuine economic risk or business substance behind them.

A typical abusive structure might involve:

1. An adviser or intermediary promoting a start-up (allegedly an ESIC) to potential investors.

2. The investor subscribing for shares — often funded by a loan or financing facility, with only a nominal deposit paid.

3. Immediately after share issue, the funds are placed under control of the financier or intermediary (not genuinely used by the start-up for innovation or business growth).

4. The investor claims the 20% tax offset, lowers their tax liability, and receives a refund. The refund (or part of it) is used to repay the financing.

5. The start-up may execute a share buy-back or other disposal so that the investor retains little or no real economic interest — yet enjoys the tax benefit with minimal actual risk.

In effect, the investor incurs nearly no real economic cost or risk, yet claims substantial tax benefits. The ATO considers such arrangements to be artificial, exploitative, and a misuse of the ESIC regime.

Because the law governing general anti-avoidance (Part IVA of the Income Tax Assessment Act) applies, the ATO is revoking benefits in such cases, disallowing the tax offset and deductions, and potentially denying CGT relief.

Why the ATO Is Cracking Down

The ATO has declared that participation in, or promotion of, unlawful tax schemes is not a victimless act. Both participants and promoters are liable:

• For the reversal of tax benefits (offsets, deductions, CGT relief).

• For hefty penalties — often ranging from 10% to 90% of the tax avoided, plus interest.

• In serious cases, potential criminal charges and prosecution (particularly for promoters).

The ATO also emphasises that these schemes mislead taxpayers and erode the integrity and fairness of the tax system.

They warn that “honest folk” — not necessarily sophisticated investors — are being drawn in by misleading promises.

Given Australia’s increasing focus on treating financial crime and tax avoidance seriously (including through joint taskforces), the risk to participants is not just financial, but reputational and legal.

How to Avoid Falling Into These Traps — Practical Advice

As a professional in accounting and financial advice (as you are), you play a critical role in helping clients avoid pitfalls. Here are practical recommendations:

• Be skeptical of offers that sound “too good to be true”: Low-risk, high-return, guaranteed tax savings — especially if offered by promoters or intermediaries — should trigger red flags.

• Perform proper due diligence: If advise clients to invest in a purported ESIC, confirm the company meets all the ESIC qualifying criteria immediately after share issue (earlystage test + either the 100-point innovation test or principles-based test).

• Ask for a ruling or documentation where there is doubt: Where eligibility is unclear (especially under principles-based innovation test), encourage clients or the company to request a private binding ruling from the ATO.

• Avoid circular financing or loanback structures: Warn clients that financing arrangements where the subscription money is not genuinely at risk — but is controlled or returned via buy-backs — may be treated as artificial by ATO and can lead to cancellation of benefits under Part IVA.

• Keep thorough records: If the investment is genuine, it is essential to maintain documentation that supports the company’s innovation credentials, business plan, commercialisation strategy, and actual use of funds.

• Seek independent, credible advice: If you're unsure about a scheme or structure, get advice from a reputable tax professional or adviser — ideally not the party promoting the scheme.

• Err on the side of caution: If something seems ambiguous or

borderline, consider declining participation or requesting a ruling/ clarification first.

What to Do If You Suspect or Discover a Scheme — Reporting & Hotline

The ATO encourages taxpayers and advisers to act proactively if they suspect an unlawful scheme. You can:

• Submit a tip-off form on the ATO website.

• Phone the ATO’s confidential “tip-off” hotline on 1800 060 062.

• If you believe you’ve inadvertently become involved in a scheme, contact the ATO immediately — voluntary disclosure may reduce penalties and limit consequences.

As a professional adviser, if a client approaches with a suspicious scheme — particularly around ESIC or other aggressive tax strategies — your ethical and regulatory responsibility may well be to advise them to steer clear, or report it if warranted.

Integrity Over Short-Term Gains

The tax-incentive regimes administered by the ATO — such as the ESIC earlystage investor offsets — were introduced with genuine policy goals: to encourage investment in innovation, support entrepreneurship, and share risks and rewards fairly.

However, where these regimes are manipulated via artificial, circular or contrived arrangements — seeking tax benefits without any real economic substance — they become abuse. The ATO has signaled it is watching, investigating, and willing to apply antiavoidance provisions, revoke illicit benefits, and penalise both promoters and participants.

For advisers and practitioners in the accounting or financial advice community — including you — there is an essential role in educating, screening, advising, and where necessary, sounding the alarm. Ethical professional conduct, due diligence, and caution are crucial.

Ultimately, long-term integrity of the tax system and investor trust outweigh the lure of short-term scheme-driven gains. If you believe you have been caught up in sheme, please either call the ATO tip-off line or ring your accountant or financial advisor to discuss the matter with them.

You can read more about the ATO’s report on tax schemes here.

Drawings vs Owner Contributions vs Owner’s Equity

BOOKKEEPING

By JODIE MOORE

How they differ, how to reconcile them, and best practice in Xero

When business owners move money in and out of their business, confusion often arises around Drawings, Owner Contributions, and Owner’s Equity.

In accounting software like Xero, understanding the difference between these concepts is essential for clean reconciliations, accurate reports, and stress-free BAS and year-end work.

This article explains:

• What each term actually means

• How to reconcile them correctly

• Best practice for keeping things tidy and audit-ready

1. What is Owner’s Equity?

Owner’s Equity is the overall value of the owner’s interest in the business.

In simple terms:

Owner’s Equity = Assets – Liabilities

It is not a transaction account you usually post to day-to-day.

Instead, it is a section of the Balance Sheet that includes things like:

• Capital introduced

• Retained profits or losses

• Drawings taken by the owner

Key point:

Owner’s Equity is the result, not the process.

2. What are Owner Contributions (Capital Introduced)?

Owner Contributions (also called Capital Introduced) are amounts the owner puts into the business for business use.

Examples:

• Owner transfers personal cash into the business bank account

• Owner pays a business expense from their personal account

• Initial funds used to start the business

These transactions increase Owner’s Equity.

How Owner Contributions should be recorded

Best practice:

• Allocate these transactions to an Equity account such as:

º “Owner Contributions”

º “Capital Introduced”

º “Shareholder Funds” (for companies)

Common mistake:

Coding owner contributions to “Other Income” — this inflates profit and causes tax issues.

3. What are Drawings?

Drawings are amounts the owner takes out of the business for personal use.

Examples:

• Owner transfers money from the business bank account to their personal account

• Owner pays a personal expense using the business debit card

These transactions reduce Owner’s Equity.

How Drawings should be recorded

Best practice:

• Allocate to a dedicated Drawings account under Equity

• Keep drawings separate from business expenses

Important:

Drawings are not tax-deductible expenses.

4. How these accounts work together

Think of it like a running balance:

• Owner Contributions ---> increase equity

• Business profit ---> increases equity

• Drawings ---> decrease equity

All three ultimately roll up into Owner’s Equity on the Balance Sheet.

You usually won’t reconcile directly to “Owner’s Equity” — instead, you reconcile to:

• Owner Contributions

• Drawings

• (Sometimes) Share Capital or Loan Accounts

5. Sole traders vs companies (important distinction)

Sole Traders

• Drawings are common and expected

• Owner does not receive wages

• Profit belongs to the owner regardless of drawings

Companies

• Owners are usually paid via:

º Wages

º Dividends

º Loans (Director’s Loan Account)

In companies:

• Drawings should generally be avoided

• Use a Director’s Loan Account instead

6. Best practice for clean records

Reconcile regularly

Leaving drawings unreconciled leads to:

• Messy year-end adjustments

• Confusion about how much the owner has taken

Talk to your accountant early

Especially if:

• The business is growing

• There are frequent owner transactions

• You’re moving from sole trader to company

7. Why this matters

Incorrect treatment of drawings and contributions can lead to:

• Overstated profit

• Incorrect tax reporting

• Confusing equity balances

• Extra accounting fees at year-end

Getting it right keeps:

• Your Balance Sheet accurate

• Your accountant happy

• Your stress levels low

Final takeaway

• Owner Contributions = money in ---->. Equity

• Drawings = money out ---> Equity

• Owner’s Equity = the net result on the Balance Sheet

Treat owner transactions as equity movements, not income or expenses, and your reconciliations will stay clean, compliant, and easy to understand.

GENERAL INSURANCE

By Craig Anderson

Defamation: A Risk Small Businesses Can Avoid

Running a small to medium enterprise inevitably comes with unexpected challenges. While some risks are unavoidable, others are far more predictable, and preventable. Defamation is one such risk that often arises from well-intentioned but poorly framed conversations with clients.

Promoting your business by highlighting your strengths is perfectly acceptable. However, problems can arise when those conversations turn into commentary about a competitor’s shortcomings. For example, it may be reasonable to say, “To the best of my knowledge, they don’t offer that service,” if it is factually correct. On the other hand, statements such as “They wouldn’t have the capability to help you,” or worse, “They wouldn’t know how to do that,” can quickly expose your business to allegations of defamation.

Managing the Risk

As a business owner, one effective way to manage this risk is to guide staff with clear, natural-sounding responses that keep the focus on your own offering. Phrases such as “We provide a full suite of services” or “We offer a complete turnkey solution” allow your team to communicate value without referencing competitors at all.

If clients ask for direct comparisons, staff can respond with statements like,

“We focus on delivering the best service we can for the price,” and avoid commenting on how others operate.

This approach protects your business while keeping conversations professional and positive.

Why Insurance Matters

Criticising another business, intentionally or not, can open the door to a defamation claim. Without appropriate insurance, defending such a claim or settling a civil action could come directly out of your business’s pocket.

Professional Indemnity Insurance can provide important protection, provided the defamation was not deliberate. For example, a typical policy wording may include:

Defamation

We agree to pay to or on behalf of the insured all loss and defence costs arising from any claim for civil liability for defamationcommittedintheconductof the policyholder’s professional business, provided that the insured did not intend to defame.

Emphasis is given to the intent behind the communications which can be hard to characterise, so staff need clear guidelines to avoid such situations.

Choosing the Right Cover

If your business provides advice for a fee, Professional Indemnity Insurance is essential. However, policies vary significantly depending on the profession.

A policy designed for an accountant may not suit an engineer, consultant, or other specialist business.

Working with an insurance broker can remove the guesswork. A broker can help identify the right policy for your specific risks and give you the confidence to operate your business effectively and securely.

There’s no better time than now to review whether your current insurance is still right for your business.

For a health check of your business insurance, contact Small Business Insurance Brokers via email at sales@ smallbusinessinsurancebrokers.com.au.

Any advice in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on the information above, you should consider its appropriateness having regard to your objectives, financial situation and needs

Preparing for Retirement: The Top 4 Questions Australians Ask Their Financial Planner

Financial Planner

By Erryn Langley

For many Australians, retirement is one of the biggest financial transitions of their lives. It’s exciting, but it can also feel overwhelming.

As a financial planner, I hear a lot of the same questions from clients who are approaching this important milestone. Here are the four most common questions asked, and why the answers matter when helping to shape successful and stress free retirement.

1. “How much do I actually need to retire comfortably?”

This is by far the number one question. Most people want to retire with confidence, not guesswork.

There’s no universal figure, because your lifestyle, health, spending habits, and retirement goals are unique to you. However, the Association of Superannuation Funds of Australia (ASFA) provides a helpful benchmark each year. Their "Comfortable Retirement Standard" outlines the amount needed for a modest versus comfortable lifestyle.

More information can be found on their website https://www.superannuation.asn.au/consumers/retirementstandard/

As a general guide:

• Singles and couples wanting a more comfortable lifestyle typically aim for higher super balances, while those with simpler lifestyles may need less.

• Your spending also tends to change throughout retirement, often higher in early active years, lower in mid retirement, and potentially higher again with increased medical needs as you age.

A personalised retirement plan can turn this question from guesswork into clarity.

2. “When can I afford to retire? or Can I stop working yet?”

Determining your retirement date depends on several factors:

• Your superannuation balance and how long it is likely to last

• Access to government benefits such as the Age Pension, including means testing rules

• Whether you plan to fully retire or ease into retirement with part time work

• Market conditions and investment risk

• Your debt position, especially mortgages

• Your expected lifestyle and spending needs

Many Australians discover they can retire earlier than they thought, while others may benefit from working a little longer to strengthen their super and reduce longevity risk. A tailored projection gives clarity and confidence.

3. “How do I structure my income in retirement?”

Retirement is no longer about simply ‘living off your super’. It’s about designing an income strategy that provides stability, flexibility, and tax efficiency.

Australians commonly ask:

• Should I use an Account-Based Pension, a lifetime annuity, or a mix?

• How much can I withdraw without running out of money?

• What happens to my income during market downturns?

A well designed strategy will usually blend different income sources, such as super pensions, a lifetime income stream such as an annuity, savings, and potentially the Age Pension. To ensure your money lasts as long as you do.

4. “Will I be eligible for the Age Pension, and how does it interact with my super?”

Many Australians are surprised to learn that even with a healthy level of superannuation, they may still qualify for a full or part Age Pension at some point, currently the eligibility age is 67.

As a financial adviser I often help clients understand and ultimately apply for Age Pension when they reach eligibility. Common queries include:

• “Am I eligible under the assets and income tests?”

• “If I’m not eligible now, might I qualify later?”

• “How does my spouse’s income or super affect this?”

• “Will drawing down my super increase my Age Pension entitlement?”

• “Should I restructure assets to improve my position?”

The Age Pension is a cornerstone of retirement income planning in Australia and understanding how it complements your super can unlock opportunities to extend the life of your retirement savings.

Final Thoughts

Preparing for retirement is not just about numbers, it’s about designing a lifestyle that feels secure, enjoyable, and aligned with your values. The earlier you start planning, the more options and flexibility you have.

A financial planner can help you:

• Clarify your retirement goals

• Model different retirement plans

• Build a suitable retirement income strategy

• Navigate superannuation rules and tax considerations

• Maximise potential Age Pension entitlements

Whether retirement is five years away or just around the corner, a personalised plan can give you peace of mind and confidence for the road ahead. We welcome speaking to new clients to discuss their retirement planning needs.

Erryn Langley

T:1300 557 144 Email: erryn@cherrywealth.com.au

Website: www.cherrywealth.com.au

Office Address: Suite 4 / 4 - 6 Croydon Road, Croydon 3136

Postal Address: PO Box 657, Croydon VIC 3136

Future‑ready Not‑for‑Profits: 2026 Digital Marketing Trends

DIGITAL MARKETING

By ETHAN STRYBOSCH

In the everyday hustle of running a not-for-profit, it’s easy to look back and think, “We should’ve….” — should’ve had clearer messaging, should’ve reached more volunteers online, should’ve had stronger donor engagement. In Victoria and beyond, many foundations and charities have poured passion into their causes, only to struggle with limited budgets, fragmented communication channels, or outdated digital approaches. Those frustrations are very real — but 2026 brings a fresh wave of tools and trends that can help NFPs work smarter, not harder.

Let’s take a quick look at how digital marketing challenges of the past — such as low engagement, weak donor targeting, and unclear online impact — can be transformed this year through purpose - driven digital strategies. Then we’ll explore the top trends shaping the future of digital engagement for not-for-profits.

Turning Old Challenges into New Opportunities

Traditionally, many not-for-profits relied on print newsletters, events, or basic social posts to connect with supporters. These efforts often lacked data insights, and it was tough to track who was actually engaging or why donations fluctuated. But now:

• Data is no longer just for big businesses. With affordable analytics and simple dashboards, small teams can now understand supporter behaviour and tailor outreach.

• Storytelling can be more dynamic. Short videos and community-led content let real voices — beneficiaries, volunteers, supporters — share impact in compelling ways.

• Automation isn’t intimidating; it’s a way to do more with less, nurturing relationships without burning out your team.

Now let’s dive into the key digital trends that NFPs should consider in 2026.

1. Short-Form Video and Storytelling (Low Cost, High Impact)

Short, emotional videos on TikTok, Instagram Reels, and YouTube Shorts are exploding in popularity and

engagement. These 15–60 second clips can showcase impact stories, volunteer moments, or donation journeys in a way that text alone simply can’t.

Benefits for NFPs:

• Boosts awareness with minimal production costs

• Makes complex missions relatable and human

• Encourages sharing and organic reach

Financial Responsibility: Use free editing tools (like CapCut), and prioritise authenticity over polished production — this keeps costs low while maximising engagement.

2. Predictive Analytics & Donor Targeting (Smarter Fundraising)

AI-powered predictive analytics lets you look ahead at donor behaviour — who is likely to give again, who needs a tailored ask, and when people are most receptive.

Benefits for NFPs:

• Better targeting increases donation ROI

• Supports personalised campaigns that feel meaningful

• Helps you allocate time and funds where they count

Financial Responsibility: Though analytics tools can cost money, start with simpler CRM systems or donor platforms with built-in analytics to avoid overspending on complex systems upfront.

3. Privacy-First Data Strategy (Trust Builds Support)

By 2026, digital privacy will be non-negotiable — audiences want transparency about how their data is used and protected. Benefits for NFPs:

• Strengthens supporter trust and loyalty

• Reduces risk of data misuse or compliance issues

• Encourages people to share information willingly when they feel valued

Financial Responsibility: Invest in privacy- aware tools and clear consent practices. It may have upfront costs, but it avoids expensive legal or reputational issues down the line.

4. AI-Enhanced Content & Automation (Efficiency With Heart)

AI tools can help NFPs generate content ideas, personalise emails, and automate social posting — freeing time for mission-focused work.

Benefits for NFPs: Reduces writing and scheduling workload

• Improves the relevance of messages for different supporter segments

• Helps maintain consistent communication without expanding staff

Financial Responsibility: Choose tools that fit your budget and strategy. Avoid over- automation — the personal touch still matters most to supporters.

5. Community-First Engagement (Belonging Over Broadcast)

Audiences today want connection, not broadcasts. Shifting toward community groups (Facebook Groups, newsletters, Instagram DMs) encourages two -way dialogue and deeper loyalty.

Benefits for NFPs:

• Encourages repeat engagement from volunteers and donors

• Builds peer-to -peer advocacy and storytelling

• Creates micro - communities of passionate supporters

Financial Responsibility: Community building is low- cost but high- attention — plan regular content and volunteer moderators to sustain energy.

A Call to Action: Your Digital Future Starts Today

Victoria’s not-for-profits are spearheading incredible change — and digital marketing doesn’t have to be a barrier. Think of these trends as tools in your advocate’s toolkit: not flashy gimmicks, but bridges to deeper connections, smarter fundraising, and greater impact. Start small, experiment boldly, and always lead with your mission.

Your story deserves to be seen. Your supporters deserve to be heard. And 2026 is the year your digital strategy brings it all together.

Supporting anxious children

Are you a parent or carer of a child aged between 0 and 6 who is feeling worried, anxious or stressed? Register for our FREE ‘Supporting anxious children webinar’ to better understand your child’s worries and learn practical strategies to support them.

This session will cover:

• Strategies to support children through understanding the role of anxiety and normal childhood development.

Kindergarten Information Night

Do you have a young child and want to know more about Kindergarten in Maroondah?

Come to our information night to learn about the kindergarten options available in Maroondah.

We encourage you to visit the kindergarten page on Council’s website to learn more about kindergarten.

Event details

• Date: Tuesday 24 February 2026

• Time: 6.30pm to 8pm

• Venue: Karralyka, Mines Rd, Ringwood East

• Cost: Free

Suitable for parents and carers. We kindly request that children do not attend the event if possible.

• Ways to identify the signs and symptoms in your child.

• Relaxation and mindfulness techniques.

• Where to go for more help and support.

◊ Webinar details:

◊ Who should attend: Parents and carers of children aged 0 to 6 years

◊ Date: Wednesday 11 February

◊ Time: 7.30pm to 8.30pm

◊ Venue: Online

◊ Presenter: Anxiety Recovery Centre Victoria

◊ Cost: FREE! Bookings essential

Interested in similar sessions for older kids? We are running the following webinars tailored to different age groups:

Primary school aged children - Wednesday 18 February Secondary school aged children - Wednesday 25 February.

Find out more on our website: https://www.maroondah.vic.gov. au/Supporting-anxious-children

These sessions are presented in partnership with the City of Boroondara, Knox City Council, Maroondah City Council and Yarra Ranges Council.

Movie Night at Grayswood Reserve

This free Celebrate Maroondah event will be a night of fun for all ages, with a special viewing of the movie 'IF'.

Bring your family and friends to Grayswood Reserve for an evening of fun for all ages, featuring a special screening of the fi lm “IF” once the sun sets. Before the movie there will be kids’ crafts and activities along with roving entertainers for everyone to enjoy.

Pack your own picnic to enjoy, and if you are in the mood for a treat there will be vendors onsite to buy icecream and coffee.

Come and help us celebrate Maroondah at this wonderful community event!

Maroondah Council News FEBRUARY 2026

Bush Nomads

Bush Walking Group – Enjoy Nature & Stay Active

Discover the beauty of our local bush parks and natural areas with our friendly walking group! Each outing features scenic 8–10 km walks, led by experienced group leaders who know the best spots for fresh air and stunning views.

These walks are a fantastic way to stay active, explore new locations, and connect with like-minded people. A moderate level of fi tness is recommended to make the most of the experience.

What to bring:

• Sturdy walking shoes

• Your own lunch

• A sense of adventure!

Carpooling options are available to share transport and reduce environmental impact.

Reconnect with nature, boost your wellbeing, and make new friends on these refreshing walking adventures.

Please note: These walks are for general fi tness and wellbeing only. They are not intended to diagnose, treat, or prevent any health condition. Consult your healthcare provider before starting a new physical activity.

When

Successful Grant Writing Workshop

This workshop equips community groups and individuals with the essential skills to write strong grant applications.

Securing funding can be challenging, especially with so many grant opportunities and requirements to navigate. This workshop guides participants through gathering the right information before applying, understanding funder priorities, and aligning projects with community benefi ts.

The workshop will cover:

• Information to have on hand before you start writing your application

• Understanding what funders are looking for

• Deciding if you should apply

• Finding evidence to support your project

• Understanding eligibility criteria and guidelines

• Preparing a realistic budget

• Evaluation and acquittal

• Answers to some common grant questions

The information covered will be relevant to all grant programs, and participants will walk away with the skills and confi dence to write compelling, targeted grant applications that meet funder expectations.

Workshop details

• Date: Tuesday 17 February 2026

• Time: 6pm to 8.30pm. Doors open 5.45pm, training will start promptly at 6pm.

• Venue: Realm, Meeting Room 1&2, 179 Maroondah Highway, Ringwood 3134

• Facilitator: Non Profi t Training

• Cost: $20 per person | $10 Concession | $0 Hardship

• Open to any Maroondah-based community group, organisation or artist

• Light refreshments will be provided on arrival

• Bookings essential

Read More Read More

NOT - FOR - PROFIT

Pres:WayneMakin V/Pres:IanYoung

Sec:AlistairMcInnes Treas:DavidWatson

TheMelbourneHighlandGames&CelticFestivalisbackonSunday,29thMarch2026,from 9amto5pmat

EastfieldPark,119EastfieldRd,Croydon,Victoria.Forticketsanddetails,see: www.melbournehighlandgames.org.au

The Melbourne Highland Games and Celtic Festival has hosted this event in Melbourne for Fifty-Nine years. It is one of the highlights of the Scottish Australian calendar and is considered the number one multicultural festival in the City of Maroondah and a major event in the Greater Melbourne area.

This day-long celebration of Scottish/Celtic culture and heritage, held annually at Eastfield Park, Eastfield Rd in Croydon, Victoria, echoes the original games that took place centuries ago in Scotland during the reign of King Malcolm III.

This multicultural, inclusive event featuring wonderful music and competitions in dancing and pipe bands and worldclass athletic competitors is a must-see outing for everyone. We strive to provide the best of Celtic culture on public display.

This year’s events on Sunday, 29th March 2026, will see the return of the Victorian Highland Pipe Band Championships, featuring Bands from all over Victoria competing for the top awards, thrilling the Souls of all Scots both new arrivals and descendants of old.

Australia’s Highland Muscle will be returning after the amazing International Games in 2025. Heavy Games athletes from around Australia, displaying their prowess in the tossing of the caber and other heavy lifting events.

Another addition to this Grassroots event will be in the Opening Ceremony with a Traditional “Scottish Clan Roll Call” making this an amazing event not to be missed, showcasing the best of Scottish/Celtic Culture and Heritage, providing a history of the Clan's family-based values and the diversity of Australian society.

Our Festival is supported by locals and travellers from all over Australia, with expected increases in loyal and new spectators to this festival, hailed by some to be the third biggest event in Victoria, playing a pivotal role in preserving Scottish and Celtic traditions among the Victorian diaspora and fostering connections to ancestral roots for younger generations.

After nearly 60 consecutive years of staging these Games, we are very excited about this year building on the past, supported by our loyal followers and new Live-Streaming to reach our followers across the World.

Our Festival brings together people from all walks of life. Dignitaries include our Patron, Mr Simon Abney-Hastings, the Right Honourable 15th Earl of Loudoun, our Ambassador, The Honourable Mr Ted Baillieu AO, the annually appointed Chieftain of the Day, The Rt Hon Lord Strathspey, Sir Michael Grant of Grant Bt., 34th Chief of Clan Grant, and honoured Clan, Clan Grant, with many other dignitaries alongside the number of dedicated volunteers who work tirelessly all year long with significant sponsors like the East Ringwood & Croydon Community Bank (Bendigo)

PROFIT OF THE MONTH

for the month of february

Arrabri Occasional Child Care provides flexible, high-quality care for children aged 3 months to 6 years in a safe and welcoming environment. Whether parents are heading to work, attending appointments, or taking a well-deserved break, we are here to support families with care they can trust. Our program encourages early learning and social connections through fun, age-appropriate experiences that help children grow in confidence and curiosity. As a registered service, eligible families can access Child Care Subsidy, making quality occasional care both accessible and affordable. At Arrabri, children are supported, engaged, and encouraged to thrive every day.

Pres: Wayne Makin

V/Pres: Ian Young

Sec: Alistair McInnes

Treas: David Watson

The Melbourne Highland Games & Celtic Festival is back on Sunday, 29th March 2026, from 9am to 5pm at Eastfield Park, 119 Eastfield Rd, Croydon,Victoria. For tickets and details, see: www.melbournehighlandgames.org.au

This day-long celebration of Scottish/ Celtic culture and heritage, held annually at Eastfield Park, Eastfield Rd in Croydon, Victoria, echoes the original games that took place centuries ago in Scotland during the reign of King Malcolm III.

This multicultural, inclusive event featuring wonderful music and competitions in dancing and pipe bands and world-class athletic competitors is a must-see outing for everyone. We strive to provide the best of Celtic culture on public display.

Our Festival brings together people from all walks of life. Dignitaries include our Patron, Mr Simon AbneyHastings, the Right Honourable 15th Earl of Loudoun, our Ambassador, The Honourable Mr Ted Baillieu AO, the annually appointed Chieftain of the Day, The Rt Hon Lord Strathspey, Sir Michael Grant of Grant Bt., 34th Chief of Clan Grant, and Honoured Clan, Clan Grant, with many other dignitaries alongside the number of dedicated volunteers whowork tirelessly all year long with significant sponsors like the East Ringwood & Croydon Community Bank (Bendigo) & City of Maroondah Council, to present the best day out for all.

Tickets are available on the day or pre-purchase online through TryBooking - link to be found on our Web Site For further information; see our Web Site: https://melbournehighlandgames.org.au/whats-on/ For further information please contact Dianne Cowling

Melbourne Highland Games & Celtic Festival Inc. 0412 297 368 dianne.cowling@gmail.com

KILSYTH SCOTTISH COUNTRY DANCE GROUP INC

Kilsyth will be celebrating their 50th Anniversary and all members are looking forward to this special occasion by holding a Grand Ball later in the year.

The Group was formed in 1976 by Bobbie Malone who originally Started the class as a children’s class and then moved on to Teaching adults. Bobbie and husband Alan moved to Bendigo where she started up the St Andrew’s Group in Bendigo.

Our Logo was designed by Mr William Chalmers, Kilsyth, Scotland, after reading an article which appeared in his local Kilsyth Chronicle. The Tartan background is actually the Kilsyth Tartan. We are very proud of the Logo he designed.

We are a small non-profit Group and our aim is to teach Scottish Country Dancing to those who are interested in the community. Scottish Country Dancing is the Social Dancing or as some would say the Ballroom Dancing of Scotland. It is not only danced in Scotland but it is danced all over the world.

There are three tempos used for Scottish Country Dancing, they are: Reels, Jigs and Strathspeys Reel time is very lively, followed by jig time and Strathspey is a much slower tempo. Five basic steps are used to form a variety of formations that go into making up a dance. The dances are usually danced with 6 or 8 dancers who form a set. Sets could be in a line, square or triangle form. This is different to Highland Dancing - solo dancing, and no swords are required.

We are one of the independent groups of the RSCDS Melbourne & District Branch who are affiliated with the Royal Scottish Country Dancing Society (RSCDS), Edinburgh, Scotland.

Our class commences on Monday, March 16th with a Come and Try night for those interested in finding out what Scottish Country Dancing is all about. This will follow on with a 4 week Beginners’ Course.

Everyone welcome - partner not required!

Scottish Country Dancing is a great Physical, Mental and Social Activity

All of which optimises Brain Health

No special clothes only soft soled shoes are required

Low-cost entertainment

Contact Ruth - see details below

On the 19th April we are holding our first event for the year which is a Ceilidh. A Ceilidh is a traditional Scottish party where people come together to do some traditional dances and have a fulfilled afternoon or evening. It is being held at our class venue and commences at 3pm. The program will consist of easy dances which are danced in Scotland at Ceilidh’s, wedding, festivals, Burns Nights and on St Andrew’s Day. They are taught and danced at schools in Scotland and also appear in programs at Deb Balls and at Scottish events held here in Australia. Ceilidh Dances are called out and demonstrated to assist those who get up for the dance. As well as class members, dancers from other groups come along to assist and enjoy the afternoon. A flyer for our Ceilidh will appear in this issue and also hopefully in the next issue of Find Maroondah.

Classes are held: Monday evenings 8 pm - 10 pm (except on Public Holidays)

Venue: Croydon Senior Citizens Hall, Unit 1, 7 Civic Square, Croydon

Contact: Ruth Chancellor email: rchancel@bigpond.net.au

This is a General Class and we do encourage newer dancers to come along and learn steps and basic dance formations that go into putting a dance together. If you like the Scottish Music and your feet tap along to it, you should come along and give Scottish Country Dancing a go. You do not have to be Scottish and definitely no partner

For Retirement Planning and Aged Care: Websites to visit in Australia

RETIREMENT

By Warren Strybosch

Planning for retirement and navigating aged care decisions can feel complex and overwhelming. From understanding superannuation rules and Centrelink entitlements to comparing accommodation options and managing aged care fees, retirees and their families face a wide range of important financial decisions.

Thankfully, there are several high-quality, non-government websites in Australia that provide trusted information, education, and professional support to help people make confident choices. Below are some of the best retirement planning and aged care websites that retirees and their families should consider visiting: www.findretirement.com.au

Find Retirement is one of Australia’s leading and award-winning retirement and aged care advisory firms. Their website is designed to help retirees and families make confident decisions about retirement living, downsizing and aged care placement.

Find Retirement specialises in:

• Retirement village and aged care placement assistance

• Explaining aged care costs, including refundable accommodation deposit (RAD) and daily accommodation payment (DAP) options

• Helping families compare villages, providers and locations

• Providing independent, unbiased advice

• Offering personalised guidance during what can be an emotional transition

What truly sets Find Retirement apart is its independence The business is not owned by any retirement village or aged care provider, meaning the guidance provided is free from conflicts of interest. Its reputation as an award-winning firm reinforces the level of trust, professionalism and care it brings to families across Australia.

SuperGuide – www.superguide.com.au

SuperGuide is one of Australia’s most respected independent retirement and superannuation education websites. It has been helping Australians understand super and retirement planning for many years.

The website covers topics such as:

• Superannuation contribution limits and strategies

• Transition-to-retirement planning

• Retirement income streams and drawdown strategies

• Age Pension rules and entitlements

• Tax considerations and investment approaches in retirement

SuperGuide is commonly used by pre-retirees and retirees who want to educate themselves and make more informed decisions — either independently or before meeting with a financial adviser. The content is written in clear, accessible language and is regularly updated to reflect changes in legislation and superannuation policy.

Aged Care Steps – www.agedcaresteps.com.au

Aged Care Steps is a highly regarded specialist education platform focused exclusively on aged care financial strategies. While it is widely used by financial planners and aged care professionals, it is also a valuable resource for retirees and their families seeking to understand the financial and regulatory complexities of aged care.

The website focuses on:

• The financial impact of entering aged care

• Strategies for managing and reducing aged care costs

• How aged care and Centrelink interact

• Educational guides, videos and webinars

• Best-practice financial solutions for families

Aged Care Steps is ideal for those who want a deeper understanding of the technical and financial aspects involved in aged care decisions. It empowers families to better understand their options and engage more confidently with advisers and care providers.

The ASFA website is a leading industry resource for superannuation and retirement information in Australia. While it represents superannuation funds, it operates independently of government and provides valuable, research-based content to the public.

ASFA offers:

• Guidance on superannuation and retirement planning

• Research on the cost of retirement in Australia

• Educational articles for retirees and pre-retirees

• Insights into lifestyle costs and long-term planning

• Updates on superannuation and retirement policy changes

ASFA is best known for its “Retirement Standard”, which estimates how much money Australians need to fund a comfortable or modest lifestyle in retirement.

Final Thoughts

The transition into retirement — and in some cases aged care — is one of the most significant life changes a person can make. Accessing reliable, independent and easy-tounderstand information can make all the difference.

For Australians seeking clarity and peace of mind, these websites provide valuable support:

• Find Retirement – Award-winning support for retirement living and aged care decisions

• SuperGuide – Trusted education on superannuation and retirement income strategies

• Aged Care Steps – In-depth information on aged care financial strategies

• ASFA – Industry-backed insights into retirement standards and superannuation planning

Whether you are planning ahead or facing immediate aged care decisions, these platforms offer the guidance and confidence needed to move forward with greater certainty and control.

Here are the contact phone numbers for the organisations listed (where they are publicly available):

• Find Retirement — Phone: 1300 883 830 (to book an initial phone appt: https://calendly.com/findgroup/15minute-phone-conversation)

• SuperGuide — Phone: 1300 300 273

• Aged Care Steps — (no publicly listed single -line phone number; best to use website contact form / enquiry email)

• ASFA (Association of Superannuation Funds of Australia) — Phone: +61 2 9264 9300 or 1800 812 798 (outside Sydney)

Warren Strybosch Award winning Financial Adviser

Part of the Find Group of Companies

Financial Planning, SMSF, Super, Insurance, Pre-Retirement & Retirement Planning (Financial Planning) are offered via Find Wealth Pty Ltd ACN 140 585 075 t/a Find Wealth, Find Insurance and Find Retirement. Find Wealth Pty Ltd is a Corporate Authorised Representative (No 468091) of Alliance Wealth Pty Ltd ABN 93 161 647 007 (AFSL No. 449221). Part of the

Centrepoint Alliance group (www.centrepointalliance.com.au/fsg/aw).

Warren Strybosch

Authorised Representative (No. 468091) of Alliance Wealth Pty Ltd.

This information has been provided as general advice. We have not considered your financial circumstances, needs or objectives. You should consider the appropriateness of the advice. You should obtain and consider the relevant Product Disclosure Statement (PDS) and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication.

Whilst all care has been taken in the preparation of this material,it is based on our understanding of current regulatory requirements and laws at the publication date. As these laws are subject to change you should talk to an authorised adviser for the most up-to-date information. No warranty is given in respect of the information provided and accordingly neither Alliance Wealth nor its related entities, employees or representatives accepts responsibility for any loss suffered by any person arising from reliance on this information.

Protecting retirement income from inflation

AGED CARE

By Aaron Minney

The fall in inflation from multi-decade highs is good news for the Australian economy. Many retirees are struggling to manage their cost of living because of the cumulative impact inflation has had on their financial position. Looking forward, retirees need a portfolio that is protected from inflation risks so that they don’t experience another cost-ofliving crisis when inflation has another upturn.

Maintaining the long-term real value of investments

The key to a successful investment strategy is the ability to generate returns over the long term. Managing inflation is an important piece of the strategy. Long term investments need to be able to generate a real rate of return that provides growth in the investment value. The investments do not need to capture short-term inflation changes, but they need to offset the impact of inflation over time. Assets that are expected to do this are generally referred to as ‘growth’ assets. To demonstrate this, we can look at the historical performance of assets over the long run1.Looking at Australian investment returns between 19002023, equities provided a return higher than inflation in 81 years which was 73% of the time. The one-year success rate for bonds and bills (cash) were lower, constrained by historical limits on bond yields. Both bonds and bills provided a one-year real return only 62% of the time in the same period.

The long run probabilities are shown in Figure 1. As the investment horizon extends out, up to 25 years, the probability of equities providing a real return increases. The higher returns on the investment eventually overcome any initial shortfall. Bond and bill investments show little improvement with a longer investment horizon2. At horizons of 20 years, the probability of delivering a positive real return from nominal bonds was only 60%. Historically, all investment horizons of 16 years (and longer) have provided a positive real return for Australian equities. While history does not provide a guarantee, the increase shown in Figure 1 should provide confidence that a long-term investment in equities will provide real capital growth.

This analysis can be extended to diversified products such as a 70/30 growth fund (70% equities and 30% bonds) and a

50/50 balanced fund (50% equities and 50% bonds). These both show trend improvements over time, benefiting from the exposure to growth assets, but over longer periods. The 70/30 fund needed 20 years and the 50/50 fund 25 years historically to ensure the positive real return.

The portfolio comparison in retirement is important in the generation of income over longer periods. If income is taken as a set percentage of the balance than changes in income will directly link to market movements. Also, there are market-linked annuities available in Australia where the capital is consumed but the income, which is paid for life, will be directly linked to the performance of the specified market or underlying investments. This paper provides a historical basis to consider the inflation protection provided by these income streams. Historical investment performance is not a reliable indicator of future performance, but it is worth considering the timeframe for recovery from historical shocks.

Figure 1: Historical probability of positive real returns,

1900-2023

Source: Calculations, based on data from Morningstar, S&P, Bloomberg and ABS

1. The historical data in this paper comes from the Dimson, Marsh and Staunton dataset as provided by Morningstar.Recent data on indices relates to the S&P/ASX 200 Accumulation index, Bloomberg AusBond Composite 0+Yr Index and Bloomberg AusBond Bank Bill Index. Recent inflation data is the CPI sourced from the Australian Bureau of Statistics.

2. The majority of these periods were between 1933 and 1973 when bond yields were set by regulation.

Inflation risk in retirement

Inflation is often called out as a risk in retirement that needs to be managed differently. Longevity and sequencing risks are also noted as being different, and these are not present in the accumulation phase. One of the challenges with managing inflation risk in retirement, is that inflation risk has a different impact on a portfolio in the retirement phase. Management of inflation risk in retirement needs a different approach. It is not just that capital needs to regain its real value, but every income payment needs to keep its value to maintain the target lifestyle of the retiree.

We can examine this difference by considering the outcome for someone who started to draw an income at the start of 1973. This was one of the worst years in the historical comparison where the inflation spike meant that any investment-linked income would be falling in real terms in the first year. If a retiree’s income was linked to an investment, the real value would have declined for any of the three assets: Bills by 3.5%; Bonds by 26%

and Equities by 30.7%. What happens over time is the recovery in the level of income. Income linked to equity performance briefly exceeds the original value in 1980 but dips again before maintaining real gains from 1983. Bills provide higher real income from 1985 while bonds will take until 1992. The 19year impact on bonds highlights the exposure that nominal bonds have to inflation risks. The pattern for income linked to the different markets from 1973 can be seen in Figure 2.

Source: Calculations, based on data from Morningstar, S&P, Bloomberg and ABS

There is more at stake for retirees. The impact is not just the length of time to recover the real capital value, but the income that is lost over that period. For the nine years that the real equity-linked income is under the starting point, a retiree needs to reduce their lifestyle or run their capital down early. The shortfall is shown in Figure 3. It highlights the cumulative shortfall in income, relative to the initial lifestyle of the retiree. The starting point is where inflation risk creates an impact which might be after the start of retirement.

The shortfall highlights the extent of the impact from an inflation shock. The worst performance is from bonds, where more than 7 years of income (lifestyle) were lost over a 17-year period before a modest recovery. For equity-linked income, nearly three years of lifestyle were lost over nine years. While there was a strong recovery after, this is an average of a third of total spending that needs to be cut for an extended period. Cash investments took longer to fully recover, but the extent of the pain was not as large. The worst point is ten years after the shock, where the retiree has missed 1.7 years of real spending.

Source: Challenger calculations, based on data from Morningstar, S&P, Bloomberg and ABS

The extended pain highlights why inflation risk is an additional risk to consider in retirement. It is not just the capital recovery, but it is the lost lifestyle that happens when an income stream does not keep pace with inflation. Retirees that choose a market-linked income stream need to have the capacity to sustain a potential extended period of reduced lifestyle before they can enjoy an increased lifestyle later in retirement.

Payment profiles and income indexation

The analysis so far has highlighted how inflation shocks can impact a lifestyle based on an initial spending level. In practice, not all spending profiles are the same. The different approaches to generating income provide differing levels of starting income. There are some differences in product features that impact the payment rates, so for comparison we will look at rates for Challenger Lifetime Annuity (Liquid Lifetime) options as at 8 April 2024 where the lifetime income streams all include capital access and a death benefit in line with the maximum allowable under the Capital Access Schedule3. The differing options for indexation of an income stream include:

• CPI-linked lifetime income

• Market-linked lifetime income4

• Accelerated payments with market-linked lifetime income

A CPI-linked lifetime income stream sustains the lifestyle of the retiree by adjusting their payments with changes in the cost of living. A market-linked income stream uses an indirect approach, that requires market movements to exceed CPI inflation over time to maintain the lifestyle of the retiree.

3. For an explanation of how the Capital Access Schedule operates see: 4.9.3.35 Means test assessment of asset-tested income streams (lifetime) | Social Security Guide (dss.gov.au)

4. Different market-linked options are available, but the initial payment is the same for each option.

Accelerated payments are designed to smooth the income profile of market-linked income streams. Recognising that payments are expected to grow over time, some of the income can be front-loaded by indexing the payments by a fixed percentage lower than the market return. This provides a higher starting payment that will grow more slowly. This fixed percentage is sometimes called the assumed investment rate (AIR). The analysis includes payments for an AIR of 2.5% p.a. and 5% p.a. The difference in the initial payment rates as shown in Figure 4 can be substantial.

Source: Challenger, as at 8 April 2024

Figure 2: Investment-linked income example

Figure 3: Cumulative shortfall in real incomes

Figure 4: Initial payment rates

Current rates provide a range of starting payments, per $100,000 of around $4,000 to $7,000 a year, for a 65-yearold male. A market-linked lifetime annuity with a 5% AIR has payments starting at a rate 78% higher than one with no AIR. Over time the payments will increase by 5% less each year so over time the payments will cross over. This wedge is independent of market movements.

The paths for the 30 years from Dec 1993 to Dec 2023 can be seen in Figure 5. This shows the five-fold increase for payments that were linked to the accumulation performance of the S&P/

ASX200 over that time. The 5% AIR hurdle provided the highest initial payment, but lower indexation meant that this would not have been the highest after 2004, only 11 years into retirement. The smaller increase in the payments with a 5% AIR would not have kept up with inflation from the initial payment level. It provided a flatter spending profile that declines in real terms.

Source: Challenger, S&PASX200

Dividend strategy

Another approach with an equity investment is to use only the dividend payments for retirement income. Dividend yields tend to be counter-cyclical so dividends are not as volatile as share prices. The question is how well they keep up with inflation over time. Again, we can use the available historical data5 to see what might have happened. One difference is that none of the dividends are reinvested. When dividends are higher, a marketlinked strategy effectively reinvests the excess. A dividend strategy spends this excess which has an impact over longer horizons.

Another difference with a dividend strategy is the starting income levels. The starting income reflects the dividend yield available at the time, with no consumption of capital over time. The first challenge is to see if the dividends protect from inflation for the given starting level. Figure 6 highlights how the dividend strategy does not provide the same level of protection of an equity market-linked strategy. It begins with a 60% success rate, similar to the equities market-linked strategy with a 5% AIR. Over time, the success rate improves, but it does not match an equity market-linked strategy. Historically, dividend growth over 25 years was below inflation in 10% of the scenarios. The earliest in this sample was 1929-1954 and the latest was 19691994.

Source: Challenger calculations, based on data from Morningstar, S&P, Bloomberg and ABS

The dividend strategy maintains the capital invested in the underlying equities so the income payments will be lower than what can be achieved if the capital is consumed over retirement. On average, the dividend yield has been 4.65% p.a. and is currently 5.2% including franking credits. Investors might expect inflation protection similar to an equity-linked 5% AIR investment. In practice, the initial income is lower with a dividend strategy, but the lower income is better protected than the 5% AIR strategy. However, it can take a long time to catch up the initial income gap.

Another impact of maintaining the capital is that the dividend strategy does not increase payments at older ages. The comparison to market-linked lifetime income streams is shown in Figure 7 which shows that only the market-linked strategy with a 5% AIR has a higher initial payment at age 65, but by age 75, the dividend strategy provides lower payments than any of the other strategies. This demonstrates that a dividend strategy supports a lower lifestyle than a strategy that will consume capital over time. Retirees are unable to maximise the money available to spend through retirement if they do not draw down on their capital.

Historical data is calculated as the difference between Accumulation and price returns in the BHM dataset: Brailsford, T., J. Handley & K. Maheswaran (2012) The historical equity risk premium in Australia: Post GFC and 128 years of data. Accounting and Finance Vol52.1 pp237-247.Franking credits have been included for the period post 1987 5.

data as at Dec 2023

Figure 6: Inflation protection of a dividend strategy

Figure 7: Initial payment rates per $100,000 investment at different ages

Source: Challenger as at 8 April 2024 with calculations based on S&P

Figure 5: Market-linked payments over time

Age Pension

Another consideration for retirees thinking about inflation protection is their entitlement to the Age Pension. Around two in three current retirees receive at least a partial Age Pension, and while this is likely to decline, a significant proportion of retirees will continue to receive some Age Pension in the future. The Age Pension provides an income stream that automatically increases with inflation. Over time, it will also increase with real wages growth, but the real wage declines in recent years mean that it is probably still several more years until the Age Pension will increase more than inflation.

The mechanics of the Age Pension indexation can result in retirees receiving a partial Age Pension being over compensated. The full Age Pension payment is indexed and any means-tested amounts are calculated relative to the new full payment. While earned income is likely to increase with inflation, the assets held by an asset-tested pensioner might increase by less than inflation, or even fall. In this case, the proportionate increase in Age Pension payments might be higher than inflation reducing the need to fully protect a retirement portfolio from inflation. This protection is provided only up to the value of the Age Pension. If a retiree has any lifestyle requirements above the safety-net provided by the Age Pension they need to be fully protected against inflation.

Conclusion

Protecting an investment portfolio from inflation can be an important concern for any investor. In retirement, the challenge increases as a retiree needs to protect their income stream to be able to sustain their lifestyle. While some investments can protect against inflation over the long run, market-linked investments don’t necessarily protect an income stream from inflation over the short to medium term. Retirees who want to be able to maintain their lifestyle need the inflation protection that can be provided by a CPIlinked income stream. The Age Pension will deliver some of this for retirees, but those with a lifestyle goal above the Age Pension’s safety net will need an additional source of inflation-protected income.

The information in the report has been compiled by the

Aaron Minney Head of Retirement Income Research

The information in this article is current as at 17 April 2024 unless otherwise specified and is provided by Challenger Life Company Limited ABN 44 072 486 938, AFSL 234670 (Challenger, our, we), the issuer of the Challenger annuities. If you invest in the Flexible Income (Marketlinked payments) or Enhanced Income (Market-linked payments) option, only the first year’s monthly income amount is guaranteed. After the first year, regular payments will index up or down annually so that they adjust with changes in your chosen market-linked payment option. In periods of poor performance, payments can index down below the starting payment. In periods of strong market performance, any Age Pension benefits may reduce to reflect the higher income received. The information in this article is general information only. It is not intended to constitute financial product advice. It has been prepared without taking into account any person’s objectives,financial situation or needs.Each person should, therefore, consider its appropriateness having regard to these matters and the information in the Product Disclosure Statement (PDS) for the relevant product before deciding whether to acquire or continue to hold the product. Any examples are illustrative only and along with statements of opinion, forecasts or predictions based on current expectations; are not a prediction or guarantee of any particular outcome. Past performance is not a reliable indicator of future performance. Actual results may be materially different from those shown. This is because outcomes reflect the assumptions made and may be affected by known or unknown risks and uncertainties that are not able to be presently identified.To the maximum extent permissible under law, neither Challenger nor its related entities, nor any of their directors, employees or agents, accept any liability for any loss or damage in connection with the use of or reliance on all or part of, or any omission inadequacy or inaccuracy in, the information in this article.

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Osteopathy in Australia is a government registered, allied health profession. Osteopaths focus on improving the function of the neuro-musculoskeletal system (bones, muscles, nerves and connective tissues) to optimise health and well-being.

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