Financial Planning

Preparing for an Inheritance – What It Could Mean for Your Financial Future

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Preparing_for_an_inheritance

For many people, an inheritance represents far more than receiving money or assets. It often follows the loss of a loved one, making it an emotional and sometimes overwhelming experience. Alongside the grief, there can also be important financial decisions that deserve careful thought.

As a Financial Adviser in Geelong, I’ve found that many people don’t include a future inheritance in their financial plans. Others assume they’ll eventually receive one but have little idea of when it may happen, what it may involve, or how it could affect their long-term financial position.

While nobody should rely on an inheritance to fund their retirement, understanding how it may fit into your broader financial strategy can help you make better decisions when the time comes.

Australia’s Largest Wealth Transfer

Australia is currently experiencing one of the largest transfers of wealth in its history.

Over the coming decades, trillions of dollars are expected to pass from older Australians to their children and grandchildren. Much of this wealth will consist of:

  • Family homes
  • Investment properties
  • Superannuation balances
  • Shares and managed investments
  • Cash savings
  • Personal assets

For many families in Greater Geelong, an inheritance may become one of the largest financial events they’ll ever experience.

That doesn’t necessarily mean every inheritance will be substantial, but it does highlight why planning ahead can be worthwhile.

Should You Include an Inheritance in Your Retirement Plan?

This is one of the most common questions I receive.
My general advice is simple:

Build your retirement plan so it works without relying on an inheritance.

There are simply too many unknowns.

The amount inherited may differ from expectations. Circumstances can change. Medical or aged care costs may reduce an estate, and timing is impossible to predict.

If an inheritance eventually arrives, it can strengthen your financial position rather than becoming something your retirement depends upon.

More Than Just Money

An inheritance may include assets that require careful consideration.

These might include:

The family home
An investment property
A share portfolio
Superannuation death benefits
Collectables or valuable personal assets
Each asset comes with different financial, legal and tax considerations.

For example, inheriting a property may create decisions about whether to sell it, keep it as an investment or move into it. Those decisions may have capital gains tax implications that are worth understanding before acting.

The Importance of Estate Planning

Preparing an inheritance isn’t only about those receiving it.

It’s equally important for those leaving assets behind.

Having an up-to-date estate plan can provide certainty for your family and reduce the likelihood of disagreements during an already difficult time.

A good estate plan generally includes:

  • A valid and current Will
  • Enduring Powers of Attorney
  • Appropriate beneficiary arrangements
  • Consideration of tax implications
  • Clear instructions regarding significant assets

Many Australians are surprised to learn that superannuation doesn’t automatically form part of their Will.

Instead, your super fund generally requires a Binding Death Benefit Nomination if you want to direct who receives your superannuation after your death.

Reviewing these nominations regularly is an important part of good financial planning.

Understanding the Tax Implications

One of the biggest misconceptions is that all inheritances are completely tax-free.

While receiving an inheritance itself is generally not taxable in Australia, some inherited assets may create tax consequences later.

Examples include:

  • Selling an inherited investment property
  • Selling inherited shares
  • Receiving taxable components of superannuation death benefits
  • Capital gains tax that may apply depending on the circumstances

Every estate is different, so it’s important not to assume the same rules apply to everyone.

Seeking professional advice before making major financial decisions can help avoid costly mistakes.

Family Conversations Matter

Money conversations are rarely easy.

Many families avoid discussing inheritances because they don’t want to create awkwardness or appear focused on money.

However, open conversations can often reduce uncertainty and avoid misunderstandings later.

Without discussing exact dollar amounts, families can often benefit from talking about:

  • General wishes for the estate
  • Who will act as executor
  • Whether the family home is likely to be sold or retained
  • Important documents and where they’re kept
  • Any special circumstances affecting family members

Clear communication today can save considerable stress in the future.

Making Wise Decisions After Receiving an Inheritance

It’s understandable to feel pressure to make immediate decisions after receiving an inheritance.

In many cases, slowing down is the better approach.

Rather than making major purchases or investment decisions straight away, it can be worthwhile to consider how the inheritance fits within your broader financial goals.

It may help you:

  • Reduce debt
  • Strengthen your retirement savings
  • Invest for long-term growth
  • Assist children or grandchildren
  • Build financial security for future generations

The best decision will depend entirely on your own circumstances and objectives.

How Financial Advice Can Help

Whether you’re expecting to receive an inheritance or planning how your own estate will eventually be distributed, professional advice can provide valuable clarity.

As a Financial Planner in Geelong, I work with individuals and families across Greater Geelong to help them make informed financial decisions at every stage of life.

Together we can consider:

  • Estate planning strategies
  • Retirement planning
  • Superannuation advice
  • Tax considerations
  • Investment strategies
  • Long-term wealth planning

Preparing today can make a significant difference to both your financial future and the financial wellbeing of those you care about.

If you’d like to discuss how an inheritance could affect your financial position, or you’d like assistance with estate planning, I’d be happy to help you develop a strategy that’s right for your circumstances.

Protecting and Growing Your Wealth in Uncertain Times

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group of seniors meeting

Economic uncertainty is something every investor will experience. Markets rise and fall, interest rates change, inflation comes and goes, and global events can quickly affect investment markets. While these periods can feel unsettling, they are a normal part of investing.

For people approaching retirement or already retired, market uncertainty can be even more concerning. After spending decades building your wealth, protecting what you’ve accumulated becomes just as important as continuing to grow it.

The key isn’t choosing between growth and protection—it’s finding the right balance.

Growth and protection don’t have to compete

Many people think investing is a choice between taking risks for higher returns or playing it safe to avoid losses. In reality, a well-constructed investment portfolio usually aims to achieve both objectives.</h
Growth investments help your money keep pace with inflation and provide long-term capital appreciation. Defensive investments help reduce the impact of market downturns and provide greater stability when markets become volatile.

Finding the right mix depends on several factors, including:

  • Your age and stage of life
  • When you’ll need to access your money
  • Your income requirements
  • Your tolerance for investment risk
  • Your overall financial goals

A portfolio that is appropriate for someone in their thirties is unlikely to suit someone preparing for retirement.

Understanding investment risk

Investment risk isn’t simply about whether markets go up or down.

The more important question is whether your investment strategy allows you to achieve your long-term objectives while helping you sleep comfortably at night.

Before making investment decisions, it’s worth asking yourself:

  • How would I react if my portfolio fell by 15% or 20%?
  • Would I be tempted to sell during a market downturn?
  • How much growth do I actually need to achieve my retirement goals?
  • Do I have enough stable investments to cover my short-term income needs?

These questions often reveal more about the right investment strategy than trying to predict what markets will do next.

Diversification remains one of the most effective strategies

One of the simplest ways to reduce investment risk is through diversification.

Rather than relying on a single investment or asset class, diversification spreads your investments across different sectors, industries and investment types. This means that when one area of the market performs poorly, another may perform more strongly.

A diversified portfolio may include:

  • Australian shares
  • International shares
  • Fixed interest investments
  • Cash
  • Property
  • Infrastructure
  • Alternative investments

No investment performs well all the time. Diversification helps reduce the impact of any single investment on your overall portfolio.

Defensive investments still have an important role

When markets become volatile, defensive investments can provide valuable stability.

These investments generally aim to preserve capital and produce more consistent returns rather than deliver high growth.

Examples include:

Quality fixed interest investments

Government and high-quality corporate bonds have traditionally provided stability during periods of market uncertainty.

After several years of exceptionally low interest rates, bonds are once again producing more attractive income, making them an increasingly important component of many retirement portfolios.

Defensive shares

Not all shares carry the same level of risk.

Companies that provide essential products and services—such as utilities, healthcare, food production and consumer staples—often experience more stable earnings during economic slowdowns because people continue using their products regardless of economic conditions.

These businesses may provide reliable dividend income while also offering the potential for long-term capital growth.

Inflation is still an important consideration

While protecting your capital is essential, it’s equally important to protect your purchasing power.

Even moderate inflation gradually reduces what your money can buy over time.

That’s why portfolios designed solely around cash may struggle to maintain their real value over long retirement periods.

A balanced investment strategy aims to preserve capital while still generating enough growth to help offset inflation over many years.

Bonds are becoming more attractive again

Higher interest rates have changed the outlook for fixed interest investments.

For many years, historically low interest rates meant bonds generated relatively modest returns. Today, higher yields provide investors with greater income opportunities while also restoring bonds as an effective diversifier within investment portfolios.

If interest rates eventually begin to fall, existing bonds may also increase in value, potentially providing investors with both income and capital gains.

This doesn’t mean every investor should dramatically increase their bond allocation, but it does highlight why regular portfolio reviews remain important as economic conditions change.

Consider protecting against inflation

Some investments are specifically designed to help reduce the impact of rising prices.

These may include:

  • Inflation-linked bonds
  • Floating-rate securities
  • Certain infrastructure investments
  • Real assets such as property

These investments can help preserve purchasing power when inflation remains elevated for extended periods.

International investing introduces currency considerations

Investing globally provides access to many of the world’s largest and fastest-growing companies.

However, international investments also introduce currency risk.

Movements in the Australian dollar can affect the value of overseas investments, regardless of how the underlying investments perform.

In some situations, partially hedging currency exposure may reduce volatility. In others, leaving investments unhedged can provide additional diversification.

The right approach depends on your overall investment strategy and financial objectives.

Don’t overlook the importance of liquidity

Liquidity simply means having access to money when you need it.

Even the strongest long-term investment strategy should include sufficient cash or readily accessible investments to cover unexpected expenses and planned withdrawals.

Many retirees choose to maintain a cash reserve to fund one to two years of living expenses. This can reduce the need to sell long-term investments during periods of market weakness.

Having adequate liquidity often provides something equally valuable—peace of mind.

Focus on what you can control

No one can consistently predict market movements.

Instead of reacting to headlines, successful long-term investors usually focus on the factors they can control:

  • Maintaining a diversified portfolio
  • Keeping investment costs low
  • Reviewing their strategy regularly
  • Staying invested during market volatility
  • Aligning investments with their personal goals
  • Seeking professional advice when circumstances change

History has repeatedly shown that markets experience periods of uncertainty, but they’ve also demonstrated remarkable resilience over the long term.

The value of professional advice
Every investor’s situation is different.

The right investment strategy depends on your retirement plans, income requirements, tax position, existing assets and willingness to accept risk.

Regular reviews help ensure your portfolio continues to reflect your goals as markets and personal circumstances change.
Rather than reacting emotionally during uncertain periods, having a well-considered investment strategy can provide greater confidence and help you stay focused on your long-term objectives.

How Wade Vautier can help

If you’re approaching retirement or already retired, having the right balance between protecting your wealth and continuing to grow it is more important than ever.

Wade Vautier works with clients throughout Geelong and the surrounding region to develop personalised investment strategies that align with their retirement goals, income needs and tolerance for risk.

If you’d like to review your current portfolio or discuss whether your investments remain appropriate for today’s economic environment, contact Wade Vautier to arrange a conversation.

Can AI Help With Financial Decisions? Yes – But It Has Limits

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couple using AI technology

Artificial intelligence has quickly become part of everyday life.

Whether it’s ChatGPT, Claude, Gemini or another AI platform, more Australians are using these tools to research everything from holiday destinations to investment ideas.

I use AI myself because it’s an excellent tool for learning, researching and organising information.

But there’s an important difference between using AI to become more informed and using AI to make financial decisions for you.

Understanding where AI adds value—and where it doesn’t—can help you make better financial decisions.

AI Is an Excellent Research Tool

One of AI’s biggest strengths is making complex topics easier to understand.

If you’ve ever wondered what compound interest is, how superannuation works, what the difference is between an industry fund and a retail fund, or how the Age Pension assets test works, AI can often explain these concepts in plain English within seconds.

It can also summarise lengthy reports, compare ideas and suggest topics you may not have considered.

For education, it’s an outstanding resource.

Where AI Starts to Struggle

Financial advice isn’t simply about answering questions.

It’s about understanding your complete financial picture.

When I meet with a client, we don’t just discuss investments.

We talk about retirement goals, family circumstances, income needs, debts, superannuation, tax, Centrelink eligibility, estate planning and attitude towards investment risk.

AI doesn’t automatically know any of this.

Even if you provide some information, it usually won’t ask the detailed follow-up questions an experienced financial adviser would.

That’s where personalised advice becomes valuable.

Be Careful With Investment Recommendations

One area where I’d encourage caution is using AI to ask questions such as: What shares should I buy? What’s the best ETF? Should I move all my super? Should I invest in property instead?

AI doesn’t know what’s appropriate for your circumstances.

It may also generate responses based on incomplete, outdated or inaccurate information.

Like any technology, AI occasionally gets things wrong.

That’s why major financial decisions should never rely solely on a chatbot’s response.

Privacy Still Matters

Many people don’t think twice about the information they type into AI platforms.

Before sharing anything, remember that some AI services may retain or use information depending on their privacy settings.

As a general rule, avoid entering sensitive personal information such as bank account details, tax file numbers, passwords, investment account numbers, identification documents and personal financial records.

The less personal information you provide, the better.

Ask Better Questions, Get Better Answers

One of the biggest mistakes people make is asking vague questions.

For example: “Should I retire?”

That question is almost impossible for AI to answer well.

A much better approach would be: “Explain the factors someone aged 62 should consider before retiring in Australia, including superannuation, tax and Age Pension eligibility.”

The quality of the answer usually improves dramatically when the question is more specific.

AI Doesn’t Replace Personal Advice

I believe AI will become an increasingly valuable tool for helping Australians improve their financial knowledge.

In many ways, that’s a positive development.

Better-informed clients often ask better questions and make better long-term decisions.

Where AI reaches its limit is applying general information to your individual circumstances.

Financial advice isn’t simply about knowledge. It’s about judgement.

It’s about weighing competing priorities, identifying opportunities, avoiding costly mistakes and helping you make decisions that fit your goals.

That’s something AI can’t fully replace.

Use AI as Part of Your Financial Toolkit

My advice is simple.

Use AI to learn financial concepts, understand investment terminology, research different strategies and prepare questions before meeting your adviser.

Then verify what you’ve learnt and discuss how it applies to your own circumstances before making significant financial decisions.

Used this way, AI becomes a powerful tool—not a replacement for sound financial planning.

Have Questions About Your Financial Future?

If you’ve been using AI to learn more about retirement, superannuation or investing but would like personalised advice, I’d be happy to help.

As a financial adviser in Geelong, I work with individuals and families throughout Geelong and the Greater Geelong region to develop practical financial strategies tailored to their personal goals.

AI can help you understand your options. Professional advice can help you choose the one that’s right for you.