SFG April 2026 Newsletter

It’s April already and Easter will soon be upon us. We hope you have a peaceful and relaxing holiday weekend.

The big economic story in March didn't need a share market ticker to announce itself, it was visible on every petrol station price board across the country.

The escalating war in the Middle East has seen extreme volatility in global markets. The closure of key shipping routes disrupted millions of barrels of oil, sending shockwaves through energy markets worldwide. Brent crude surged by almost 70% in March to trade at around $115 per barrel by month’s end, its highest level in years.

US share markets bore the brunt, with the S&P 500 down roughly about 8% for the period, while the tech-heavy Nasdaq fell more than 10%.

Closer to home, the ASX 200 fell around 8% because of energy price fears and inflation concerns. The Australian dollar weakened by almost 3% over the month, falling to approximately USD 0.686.

Inflation figures were steadying before the outbreak of war, with annual inflation slowing to 3.7% in February.

The RBA increased the cash rate target by 25 basis points to 4.10% in March based on concerns about inflationary pressure due to the Middle East conflict’s impact on energy prices. Further pressure on household budgets and interest rates looks likely in the months ahead.

The Iran war and markets: Keeping perspective amid uncertainty

There’s a particular kind of unease that creeps in when market headlines start mixing geopolitics with talk of oil prices and recessions. That feeling has been hard to avoid, as the escalating war in the Middle East spooked global markets and brought fresh uncertainty to an already fragile economic landscape.

For investors, watching so many forces moving at once and volatile numbers, there can be a strong temptation to “do something”.

Before reacting, a good understanding of what’s driving market movements is useful to assess the short and medium term. More importantly, it helps to work out how your long-term strategy fits in.

Energy markets have felt the most immediate effect of the conflict pushing oil and gas prices ever higher.

Global share markets also responded quickly to the crisis with sharp falls and volatility.

The conflict has come at a time when the global economy was already fragile.

Adding an energy price shock into the mix increases the risk that higher costs slow spending and investment.

In Australia too, there’s increasing talk of recession – as much as a 30 per cent chance within the next 12 months, according to AMP.ⁱ

However, Treasurer Jim Chalmers disagrees saying that, while the economy is expected to take a “sizeable hit”, a recession is not expected.ⁱⁱ

The immediate effects

Market volatility is likely to continue with sharp price swings as the markets react to either good or bad news coming out of the Middle East.

For households, the most visible impact is likely to be at the pump and in their power bills. Widespread price rises here are likely to affect consumer confidence and spending patterns.

So-called “safe-haven” assets such as cash, government bonds and some currencies often benefit during uncertain times as investors look to defend their portfolios, however bond yields have experienced volatility as investors assess the evolving situation in the Middle East.

Gold was also once on the list of safe havens.  But, during the most recent crisis, its value has plunged nearly 15 per cent during the month. Nonetheless the price remains high – up by almost 300 per cent over the past decade.ⁱⁱⁱ

While there’ll be plenty of market “noise” ahead, it’s important to remember that short‑term market reactions may be driven as much by emotion as by fundamentals. Fear, uncertainty and rapid shifts in sentiment often exaggerate price moves in the early stages of a crisis.

Looking further ahead

Looking beyond the immediate panic, the medium term (the next six to 18 months) will depend on how the world adapts to the energy prices shock.

Continued high oil prices can have several effects:

• Inflation pressures may linger

• Economic growth and corporate earnings may slow

• Long‑term opportunities may be created by the market disruptions

It is also worth remembering that energy shocks don’t last forever. Markets adapt, alternative supply routes emerge and prices eventually reflect new realities. The timing is uncertain, but history suggests that economies and markets are more resilient than they often appear in the heat of the moment.

Strategy over fear

Perhaps the most important thing to remember right now is that your financial plan was built for times like this.

Sound financial planning anticipates that markets will be periodically disrupted by wars, pandemics, financial crises and recessions.

The discipline required in moments of market stress is to distinguish between short-term fear and long-term strategy. Fear says: sell everything and wait for calm. Strategy says: stay invested, stay diversified and if anything has changed, let's talk about it properly.

If the events of last month have raised questions for you, we're here to help you navigate with confidence. Please give us a call.

i Fuel surcharges are adding to consumers' financial stress | ABC News

ii Chalmers says there is no ‘expectation’ of a recession | The Guardian

iii Gold is meant to be a ‘safe haven’. Why is it crashing? | The Conversation

Deciding to downsize is a big life step. It is not just about moving to a smaller house. It can be about leaving behind a home full of memories, familiar streets, and routines you have built over many years.

For many, the idea of simplifying life, reducing maintenance, and freeing up finances can be very appealing. But for some, the reality of downsizing does not always match the rosy picture. In fact, one in six people who have downsized in the last five years wish they had not made the move, so it’s important to give the move careful consideration to avoid “downsizer regret”.ⁱ

The financial appeal of downsizing has been strengthened by the government’s downsizer contribution scheme, which has been developed to encourage older Australians to release equity from larger homes and free up housing supply for younger families. Eligible homeowners aged 55 or older can contribute up to $300,000 from the sale of their family home into superannuation, or $600,000 for couples. This can provide a meaningful boost to retirement savings, but the considerations go beyond how the figures stack up.

The realities of downsizing

The costs add up

The financial boost from downsizing is often what makes it appealing. Selling a larger home can free up money for retirement, travel, or other plans, and topping up superannuation could provide a tax benefit.

However, you must consider all costs. Moving expenses can add up quickly. Renovations to make a new home suitable, such as improving accessibility, or modernising kitchens and bathrooms, can be expensive.

Finding the “right” place can also be a consideration, as appealing homes for downsizers – single-storey, low-maintenance and close to services - can be scarce and expensive.

Less space can feel restrictive

Downsizing literally means going smaller which can feel freeing at first. But a small home can feel restrictive if there is not enough space for hobbies, collections, or visiting family. Trading a large garden, spare rooms, or entertainment areas for a lock-up-and-leave lifestyle may reduce maintenance stress, but it can also feel like a loss of freedom.

Home is where the heart is

Downsizing can sometimes mean a move away from a familiar area. Leaving a family home and community connections can be deeply emotional, and a home in a new neighbourhood can feel isolating. Where you live can matter just as much as the house itself. 

Watch the impulsive purging

Many people experience regret after decluttering too quickly. In the rush to simplify, sentimental objects, practical tools or furniture, may be thrown away or donated, only to be missed later. Taking your time to evaluate what items to keep, or place in storage, can prevent feelings of loss.

How to avoid downsizing regret 

Careful planning can make a huge difference to how you experience downsizing. Here are some strategies to help make the move feel more positive:

Take your time – Give yourself time to adjust emotionally, financially, and physically. Explore your options and imagine daily life in a potential home before committing.

Think about future needs – Make sure your new home can support the activities you value – whether it’s your hobbies or hosting family and friends.

Budget for hidden costs – Factor in moving expenses, agent fees, renovations, and strata or service charges.

Keep treasured items in mind – Don’t discard sentimental or useful items too quickly.

Stay connected – Consider proximity to family, friends, shops, and services to maintain social connections or, if you are planning a significant change of scenery, think about how you’ll develop personal connections in a new location.

Downsizing can be a smart financial decision, especially considering that government incentives may allow contributions to superannuation. However, it’s important to remember that these contributions could impact any Age Pension entitlements. We are here to assist you with the financial side of things.

Remember, it’s not just a numbers game. Emotional attachment, lifestyle changes, social connections, and practical needs all play a role in whether a move to downsize feels liberating or limiting. Taking time to plan, reflect, and consider how and where you want to live, can help ensure downsizing brings freedom, comfort, and happiness rather than regret.

i https://www.smh.com.au/national/i-had-no-idea-about-some-of-the-issues-the-aussies-finding-the-downsides-to-downsizing-20250501-p5lvod.html

The transition of a parent or relative into residential aged care can be one of the most emotionally and financially challenging moments a family will face.

Beyond the personal upheaval, a number of issues need to be dealt with quickly including how to fund the Refundable Accommodation Deposit (RAD), how to cover daily care fees and what to do with the family home.

On the plus side, selling the home can suddenly transform someone’s financial position from “cash poor” to “cash rich”. But for those relying on the Age Pension, the sudden spike in assets has major implications for pension eligibility, aged care means testing and ongoing fees.

Understanding how the rules work can make all the difference in turning a potentially damaging financial outcome into a sustainable aged care funding solution.

Making the move

Usually, a person’s home is exempt from the Age Pension assets test but once it’s sold, the cash is then assessed as an asset and that may reduce the pension payments.

There are a number of exemptions to this rule. For example, if you leave your home to enter aged care due to illness, your home may be exempted from the assets test for up to two years. And, it won’t be counted as an asset if your partner is still living there.ⁱ

In addition to the Age Pension means test, the types of fees and how much you pay for an aged care home bed also depend on an assessment of your income and assets. The aged care means test considers both your income and assets to determine how much government subsidy you receive and what you will pay in care fees.

Options for managing the proceeds of a sale

Once the family home is sold, the sudden boost in cash can feel overwhelming. But, with good advice, the funds can be used to improve cashflow, reduce ongoing costs and preserve as much of the pension and aged care subsidy as possible.

Here are some of the options:

1. Paying the refundable accommodation deposit (RAD)

Paying the full RAD means you don’t pay the daily accommodation fees (DAP), which can be hundreds of dollars per day. But, be aware, that a refundable lump sum is counted as your asset in the aged care means assessment, even if it is paid by a family member. This means that paying a lump sum can affect your fees. On the other hand, a RAD may improve Age pension eligibility for some people. ⁱⁱ

2. Paying a part RAD and part DAP

It doesn’t have to be all or nothing. You could pay some of the accommodation deposit and then pay a reduced daily fee. The advantage is that you have access to the cash for living and medical expenses.

3. Making a downsizer super contribution

For those aged over 55, up to $300,000 can be contributed to super after selling the family home, which may be a more tax-effective environment. There is no maximum age on making a downsizer contribution despite normal super rules preventing most voluntary contributions after age 75.

Your super balance is also assessed as part of the means test for both the Age Pension and aged care fees.

4. Renting the home instead of selling

This option might suit those who want to keep the property in the family. While the rental income will be counted as part of the income test, depending on how you pay for your aged care accommodation, there may be some exemptions from means testing.

In a nutshell, selling the family home can affect both the Age Pension and aged care means testing, increasing costs and reducing entitlements.

The key is in using the new funds wisely. With careful planning, families can navigate this transition in a way that protects income, manages fees and ensures the person entering aged care has the resources they need.

With so many complex and time‑sensitive decisions to make during an already emotional period, getting the right advice can be critical in helping families make informed choices and avoid costly mistakes. Please give us a call if you’d like more information.

i Real estate assets - Age Pension | Services Australia

ii Understanding aged care home accommodation costs | My Aged Care