Tag: Stock pick

The income you can earn from your investments and/or work while still qualifying for the age pension will increase on 20 September.

The changes reflect indexation adjustments, which are made twice per year, to keep up with inflation.

Let’s take a look at the details.

How much can you earn while still getting the pension?

If you were born on or after 1 January 1957, you are eligible for the pension from age 67, whether you are retired or not.

The pension is subject to an assets test and income test.

On 20 September, the upper thresholds on both tests will change.

In this article, we’re focusing on the rules for the income test.

Currently, singles who earn less than $226 per fortnight qualify for the full age pension.

Under the indexation changes, singles who earn between $227 and $2,701.40 (up from $2,627.80) per fortnight will get a part-payment.

Couples who earn less than $396 per fortnight qualify for the full payment.

Couples who earn between $397 and $4,128 (up from $4,016.80) per fortnight will qualify for a part-pension.

Work bonus

The Work Bonus reduces the amount of income that counts in your fortnightly income test.

Every fortnight, $300 credit is added to your Work Bonus balance, up to a maximum of $11,800, as a matter of routine.

When you work and declare your earnings, your Work Bonus balance offsets those earnings.

If your earnings are higher than your Work Bonus balance, the excess counts toward your income test for that fortnight.

This may mean you receive a lower pension payment for the fortnight.

Investment income

Pensioners do not need to declare actual income from each of their financial investments.

Instead, income is calculated using deeming rates.

(Rental income from an investment property is assessed separately, and exact amounts are used).

The deeming rates will go up on 20 September, but they are still generously low.

The lower deeming rate will be 1.75% for the first $66,800 worth of assets for singles and the first $110,600 for couples combined.

Everything above these amounts will be deemed to have earned the new upper deeming rate of interest at 3.75%.

Even the upper deeming rate is much lower than the typical interest rate you’d get on savings at the bank these days (5%-plus).

Pension payments are also going up

From 20 September, single pensioners will receive an extra $36.80 per fortnight under the inflation adjustments.

That will take the full pension payment up to $1,237.70 per fortnight.

Couples will get an extra $27.80 per partner, per fortnight.

That will raise the full pension payment to $933 per partner, per fortnight.

A very important note

Even if your income is very close to the upper limit, it is still worth applying for the age pension.

You may only get a small pension payment, but you’ll get the full benefit of the Australian Pensioner Concession Card (PCC).

The PCC can save you thousands of dollars per year through discounted medicines and hearing services, bulk-billed GP appointments, and extra benefits under the Medicare Safety Net.

Depending on which state or territory you live in, you may also qualify for discounted public transport, electricity, gas, council and water rates, dental and eye care costs, and car registration.

The post How much income can you earn while still qualifying for the age pension? appeared first on The Motley Fool Australia.

More reading

• Buy alert! Expert names 2 surging ASX All Ords tech stocks to buy today
• ASX 200 dives to a 6-week low. What’s behind today’s sell-off?
• 2 ASX dividend shares yielding 9.5% (or even more)
• NEXTDC shares are falling despite $1.1 billion funding boost. Here’s why
• Should I buy DroneShield shares following today’s trading update?

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) is having a rough Thursday.

At the time of writing, the benchmark index is down 1.68% to 8,762 points, pushing it to its lowest level in around 6 weeks.

The fall also leaves the ASX 200 roughly 5.7% below its record high of 9,296 points reached in early August. Over the past month alone, the index has fallen more than 5%.

The selling is also spread right across the market. At the latest check, 153 shares are falling, 36 are rising and 11 are unchanged.

If the current decline holds into the close, it would also be the ASX 200’s worst session in around 3 months.

Oil above US$100 rattles investors

One of the biggest concerns today is the jump in oil prices.

Brent crude is currently at US$101.60 a barrel, as tensions involving the US and Iran continued to push energy prices higher.

Higher oil prices are adding to inflation concerns, which is pushing bond yields higher and making the outlook for interest rates less comfortable.

The US 10-year Treasury yield climbed to around 4.84% overnight, its highest level since 2023, while Australian bond yields have also moved higher.

Markets are now pricing around a 70% chance of another Reserve Bank of Australia rate hike at its 29 September meeting.

Heavyweights are getting hit

The weakness is spread across the market, with every sector trading lower earlier on Thursday.

Mining stocks are doing plenty of damage after iron ore slipped back below US$100 a tonne.

BHP Group Ltd (ASX: BHP) shares are down 2.81% to $62.77, while Rio Tinto Ltd (ASX: RIO) shares have fallen 3.03% to $173.90.

The banks are also lower, with Commonwealth Bank of Australia (ASX: CBA) shares down 1.71% to $152.60 and National Australia Bank Ltd (ASX: NAB) shares falling 1.91% to $37.54.

What should investors watch now?

One level worth watching is the ASX 200’s 200-day moving average, which was sitting around 8,816 points before the market opened.

The index has now dropped below that level, which could put more attention on the 8,800 area after the strong breakout above 9,000 in August failed to hold.

The next few sessions are likely to depend heavily on oil prices, bond yields and the upcoming US inflation data.

The ASX 200 is still slightly higher in 2026, so I wouldn’t call this a major correction yet.

But with the index now 5% below its August record high, investors should expect more short-term volatility.

The post ASX 200 dives to a 6-week low. What’s behind today’s sell-off? appeared first on The Motley Fool Australia.

More reading

• Is the pullback in Westpac shares a buying opportunity?
• How much superannuation do I need to earn $100 a day in passive income?
• Where will the best returns in the ASX 200 be in the next year?
• How much do I need to invest in CBA shares for $10,000 of passive income?
• Up 62% in a year are BHP shares now a buy, hold or sell?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you like the idea of earning an easy passive income, then ASX dividend shares are for you.

There are a huge range of ASX shares on the market which pay out dividends to shareholders every six months, or perhaps even more frequently.

But the hardest part is picking the best ones for your portfolio.

Here are two of my top high-yield ASX dividend picks. And these shares both pay a huge dividend of 10% or more.

BetaShares Australian Top 20 Equities Yield Maximiser Complex ETF (ASX: YMAX)

YMAX is an ASX-listed exchange-traded fund (ETF) that gives its shareholders exposure to Australia’s 20 largest blue-chip shares, rather than just one individual company.

I like the stock because it invests in a range of large Australian companies, which means it can provide greater diversification and reduce the risk of relying on the performance of one individual company. 

This makes it a more stable option for investors looking for regular passive income, while still giving them exposure to some of Australia’s biggest businesses.

The fund is heavily weighted into the financial sector, which accounts for 43.2% of its allocation at the time of writing. The materials sector is second, accounting for 24.8% of its allocation. 

Elsewhere, it also invests into the consumer discretionary, consumer staples, energy, industrials, real estate, communications, and healthcare sectors. 

YMAX also differs from a lot of other ASX dividend stocks because it pays its shareholders on a monthly basis.

As of the 31th of August, YMAX has a 12-month gross distribution yield of 9.5%, and a net yield of 8.1%. The total franking level is 41.4%.

The ASX dividend share is due to pay its next dividend ( 5 cents per unit) to shareholders next week. It has paid between 3.5 cents and 5 cents per share since it moved to monthly payouts in February this year.

Nine Entertainment Co. Holdings Ltd (ASX: NEC)

Nine Entertainment is another attractive passive income option. The business has a large and established position in Australia’s media industry, combined with a long history of paying reliable and consistent dividends to its shareholders.

Australian media giant Nine Entertainment underwent a strategic reshape of its business in the first half of FY26. This included a broad portfolio restructure, acquisitions and asset sales, and enhancements to its digital and streaming revenue.

The ASX dividend company acquired QMS Media, sold Nine Radio, and restructured its NBN and Darwin TV operations. It also sold its controlling stake in property platform Domain. 

The $1.4 billion Domain deal allowed Nine to reduce debt and boost its balance sheet. It also meant it was able to return roughly $777 million (paying a special dividend at a rate of 49 cents per share) to investors in late-2025. 

Just last month, the ASX company announced its FY26 results, including a 3% increase in revenue, a 17% increase in EBITDA, and a final 3 cent per share dividend for FY26.

Combined with its 4.5 cent interim unfranked dividend paid in April, the total FY26 dividend comes to 7.5 cents. At the time of writing, this translates to a dividend yield of around 9.9%.

The post 2 ASX dividend shares yielding 9.5% (or even more) appeared first on The Motley Fool Australia.

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• Nine Entertainment secures Premier League rights through 2034
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• 3 ASX growth shares experts think could double
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• WIN Group increases Nine Entertainment stake past 31%

Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Nine Entertainment. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

NEXTDC Ltd (ASX: NXT) shares are under pressure despite the data centre operator securing $1.1 billion in fresh funding. The stock fell 3% to $12.41 during Thursday morning trading, taking its monthly decline to around 14% and its 12-month loss to roughly 25%.

The paradox is striking. NEXTDC is raising billions to capitalise on booming AI demand, yet investors appear increasingly concerned about how much it will cost to turn that demand into profits.

AI opportunity comes with a huge bill

The funding solves one problem, but highlights another.

NEXTDC is seeing customers reserve enormous amounts of data centre capacity well before the infrastructure is ready to generate revenue. At the end of FY26, contracted utilisation had reached 740.1MW, but only 175MW was already billing.

That leaves a substantial gap between capacity customers have committed to and infrastructure actually generating revenue.

Earlier this year, NEXTDC estimated its existing contracted utilisation could eventually generate more than $1 billion of EBITDA once delivered, without assuming any additional customer wins.

That sounds compelling. The catch is that delivering all that capacity requires an extraordinary amount of capital.

NEXTDC has been tapping equity, debt, and hybrid funding to accelerate construction, while its major developments require access to land, power, equipment, and skilled workers.

That makes execution critical for NEXTDC shares. Any delays, cost overruns, financing pressures, or slowdown in AI infrastructure spending could reduce the returns investors ultimately receive.

There can also be a lengthy lag between signing a customer and bringing new capacity online and generating revenue.

Investors are focusing on capital intensity

The scale of NEXTDC’s spending plans helps explain the market’s caution.

The company expects to spend between $5.25 billion and $5.75 billion in FY27, representing roughly 55% to 70% growth from FY26, as it races to build capacity for AI and cloud customers.

The latest $1.1 billion convertible notes issue is also NEXTDC’s third capital raising in just over four months.

For investors in NEXTDC shares, that reinforces an uncomfortable reality: the AI data centre boom may create enormous demand, but meeting that demand requires enormous upfront investment.

And higher interest rates make capital-intensive infrastructure businesses particularly sensitive to financing costs.

That’s why NEXTDC shares have fallen roughly 14% over the past month even as contracted utilisation has surged to about 740MW and the company carries a 565MW forward order book.

Foolish takeaway

The market isn’t necessarily questioning whether customers want NEXTDC’s infrastructure.

It’s questioning how much capital NEXTDC needs to spend before those megawatts translate into sustainable revenue and cash flow.

For shareholders, that’s the key tension behind the recent sell-off of NEXTDC shares.

The post NEXTDC shares are falling despite $1.1 billion funding boost. Here’s why appeared first on The Motley Fool Australia.

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• You don’t need to own Nvidia to invest in AI – Here are the best Aussie artificial intelligence shares
• NEXTDC secures $1.1bn in convertible notes for data centre growth
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Motley Fool contributor Marc Van Dinther has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

DroneShield Ltd (ASX: DRO) shares are down around 1% on Thursday.

The move comes despite a fresh trading update from the counter-drone technology company, although the broader market is also under pressure. The S&P/ASX 200 Index (ASX: XJO) is currently down around 1.3%.

So, has today’s announcement changed my view on DroneShield shares?

What did DroneShield announce?

DroneShield provided investors with a few updates this morning.

The company said FY26 committed revenue has now reached $251 million, up from $240 million reported on 21 August. This puts it inside management’s existing FY26 revenue outlook of $250 million to $270 million. DroneShield also has $46 million of committed revenue for FY27 and beyond.

I think the important part is the continued conversion of demand into actual orders.

DroneShield has spoken for some time about the growing need for counter-drone technology. Seeing more of that demand turn into contracted revenue gives me greater confidence that the opportunity is translating into real sales.

The company also received the first order for its newly released artificial intelligence-enabled RfRecon product. The order is not material financially, but the hardware will be deployed to an existing Western European military customer before the end of 2026.

DroneShield also announced that Rebecca Lowde will become chief financial officer in November. She brings experience from MYOB, Afterpay, Salmat, and Bravura Solutions Ltd (ASX: BVS), which could be valuable as DroneShield becomes a much larger global business.

Why I still think DroneShield shares are a buy

I think today’s announcement adds another piece of evidence that DroneShield is continuing to scale.

The company operates in a market where governments and military organisations are becoming increasingly concerned about the threat posed by drones. DroneShield develops technology to detect, track, identify, and defeat those threats across fixed locations and mobile operations.

What I like is the potential for that demand to continue growing across multiple countries.

DroneShield is also expanding its product range rather than relying on one piece of hardware. The first RfRecon order is a small example, but successful deployment could potentially lead to further orders from existing and new customers.

At $1.71, the shares are also far below the highs reached previously and much closer to their lows.

I think that gives patient investors a more reasonable entry point into a company that still has substantial growth potential.

There is still plenty of risk

DroneShield remains one of the higher-risk ASX shares I would consider buying.

Defence contracts can be large but irregular, and revenue can move around considerably depending on when orders arrive.

The company also needs to prove that rapidly increasing sales can translate into much larger and more consistent profits over time.

That means I would probably keep any investment relatively small rather than making DroneShield a major portfolio position.

Foolish takeaway

Today’s trading update gives me another reason to remain positive on DroneShield.

Committed FY26 revenue has moved above $250 million, while the first RfRecon order shows customers are beginning to adopt another product from the company’s expanding technology range.

At current prices, I still think DroneShield shares are a buy for investors comfortable with the higher level of risk.

The post Should I buy DroneShield shares following today’s trading update? appeared first on The Motley Fool Australia.

More reading

• What are the most shorted ASX shares on the market right now?
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• 3 reasons to buy DroneShield shares after their 74% decline
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Motley Fool contributor Grace Alvino has positions in DroneShield. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bravura Solutions and DroneShield. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

GrainCorp Ltd (ASX: GNC) shares are back in focus on Thursday after the company released a new trading update.

The agribusiness stock is down 3.03% to $6.73 at the time of writing.

That comes despite GrainCorp keeping its FY26 earnings guidance unchanged.

But there was one part of the update that investors clearly didn’t like.

What’s changed?

GrainCorp said its transformation program is still delivering savings, with around $12 million of benefits expected in FY26.

That’s ahead of its previous target, while the longer-term goal of adding $20 million to $30 million to through-the-cycle EBITDA by the end of FY28 remains unchanged.

However, the technology side of the program has been delayed.

The first release, which covers the Nutrition and Energy business, is now expected to go live in the second quarter of 2027. It had previously been scheduled for the second half of 2026.

GrainCorp said the extra time would “reduce implementation risk”, but it comes with a price.

FY27 spending on ‘Release 1’ is now expected to be around $30 million to $35 million, an increase of roughly $30 million from the previous estimate.

80 roles affected

GrainCorp also used the update to announce changes to its Agribusiness operating model.

The company said it is simplifying the way the business operates across its east coast network and corporate support teams, with around 80 roles affected.

GrainCorp expects to recognise around $5 million in restructuring costs in FY26.

Despite those extra costs, the company has kept its FY26 earnings guidance unchanged.

Underlying EBITDA is still expected to come in around the midpoint of its $200 million to $240 million range.

Underlying NPAT is forecast between $20 million and $50 million, including the $5 million restructuring cost.

Crop outlook gives investors some good news

The crop outlook was one positive in Thursday’s update.

GrainCorp said growing conditions remain supportive across NSW and Victoria, although conditions have been drier in Queensland.

Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) now expects the east coast winter crop to reach 26.6 million tonnes, around 12% higher than its previous forecast.

GrainCorp also said higher global commodity prices could create more export opportunities during the year.

That should provide some support as the company heads into the upcoming harvest.

Foolish takeaway

GrainCorp shares had rallied strongly before today, climbing around 23% over the past month. They are still down roughly 6% in 2026 and 22% over 12 months.

Before today’s announcement, TipRanks showed 3 buy ratings and 2 holds, with an average price target of $6.85.

That’s only slightly above the current share price, although those targets could change after brokers work through today’s update.

GrainCorp reports its full-year results on 12 November.

The post GrainCorp shares fall after surprise $30 million cost increase appeared first on The Motley Fool Australia.

More reading

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• Here are the top 10 ASX 200 shares today

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Westpac Banking Corp (ASX: WBC) shares have delivered strong returns for shareholders in recent years.

The bank still offers an attractive dividend and remains one of the largest financial institutions in Australia.

But if I were investing fresh money today, I think there are two ASX shares with better prospects for long-term total returns.

Why I am cautious on Westpac

My issue with Westpac is not the quality of the bank. It is the amount of growth I can see from here.

Consensus forecasts point to only modest earnings per share growth over the next couple of years, while the dividend is expected to remain broadly flat.

At the same time, Westpac operates in a highly competitive mortgage and deposit market. Winning more home loans does not necessarily translate into strong profit growth if margins are being squeezed in the process.

That leaves me wondering where a substantial increase in shareholder returns would come from.

Macquarie Group Ltd (ASX: MQG)

Macquarie would be one of my alternatives to Westpac shares. Its opportunity is much broader than traditional Australian banking.

Macquarie operates across asset management, commodities, infrastructure, energy, financial markets, and banking. That gives the group exposure to investment trends happening around the world.

I particularly like its ability to deploy capital into areas such as infrastructure, renewable energy, and transport when attractive opportunities appear.

Earnings can be uneven from year to year, and Macquarie will always be influenced by market conditions.

But over a longer timeframe, I think the company has more ways to grow than Westpac.

If Macquarie continues expanding its global businesses and finding attractive places to invest, I can see earnings becoming considerably larger over the next decade.

ResMed Inc. (ASX: RMD)

ResMed is the other ASX share I would choose ahead of Westpac.

The company develops devices, masks, and software for sleep apnoea and respiratory care.

What I like is how much of the potential market remains untreated.

More than one billion people globally are estimated to have sleep apnoea, yet diagnosis and treatment rates remain relatively low. That leaves ResMed with a substantial pool of potential patients still to reach.

The business also benefits after a patient starts treatment. Masks and other accessories need replacing over time, giving ResMed recurring revenue alongside sales to new patients.

Its recent decision to sell the MatrixCare software business should also allow management to concentrate more closely on its core sleep and respiratory operations.

I think that combination of a large underserved market, recurring demand, and continued innovation gives ResMed a long runway.

Foolish takeaway

Westpac shares could still be a sensible choice for investors prioritising dividends.

But I think its future returns are likely to rely more heavily on income and modest earnings growth.

Macquarie and ResMed give me clearer opportunities for the underlying businesses to become substantially larger over time.

For that reason, I would back both to deliver stronger total returns than Westpac over the long term.

The post 2 ASX shares I think could return more than Westpac appeared first on The Motley Fool Australia.

More reading

• Is the pullback in Westpac shares a buying opportunity?
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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group and ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The All Ordinaries Index (ASX: XAO) has fallen lower in early morning trade on Thursday as investor confidence in ASX shares continues to take a hit.

At the time of writing, the All Ords Index is down around 1% for the day, and is now roughly 0.5% lower for the year-to-date.

But there are some ASX shares that brokers expect will outperform the index going forward. Here are two of them, and they’re tipped to have upsides of up to 90%.

SiteMinder Ltd (ASX: SDR)

SiteMinder is a technology business that provides an e-commerce platform for hotels and other accommodation businesses. The company touts its product as helping hotels to sell, market, manage, and grow their businesses from one platform. 

The company posted a strong FY26 result last month, including a 22% increase in revenue and a 96.5% increase in EBITDA. Its net loss also improved to $11.3 million, down from a net loss of $24.5 million in FY25. And these results came amid headwinds from a strong Australian dollar and ongoing global travel challenges. 

Looking ahead, SiteMinder said it expects its adjusted EBITDA margin to keep expanding in FY27 and reach the mid-20% range by FY30. ARR is targeted to continue growing in the 20% range (CAGR) over the next four years. 

But it looks like investors were disappointed with the company’s outlook and slower-than-expected growth projection. At $2.80 a piece, the share price has crashed around 27% since the results announcement and is down around 54% for the year-to-date.

But I think the latest sell-off was overdone. The current share price looks like a rare buying opportunity to buy shares cheaply. 

Market Index shows that the majority of brokers have a buy rating on the ASX shares. And the $5.40 average target price implies an upside of around 90% at the time of writing.

Catalyst Metals Ltd (ASX: CYL)

It’s been a choppy 2026 so far for the ASX gold producer’s shares.

The share price spiked to an all-time high in January when it announced a significant new high-grade discovery at its Plutonic Gold Belt. But then the ASX shares shed around 52% of their value to an annual low in early June. The crash followed headwinds from a weaker gold price, higher mining costs and an investor rotation away from gold shares.

But now it looks like the headwinds from earlier this year are finally turning into tailwinds. Catalyst shares have now rebounded around 41% since June and are trading at $6.57 at the time of writing. For the year-to-date, the shares are roughly 11% lower.

In late-July the gold miner announced a record quarterly gold production of 31,886 ounces at an all-in sustaining cost (AISC) of A$2,666 per ounce, and built cash reserves by A$54 million in the June 2026 quarter.

And earlier this week, the company announced its FY26 results. It posted record metrics across the board, supported by a buoyant gold price. Revenue climbed 39%, EBITDA was up 57%, and NPAT was 43% higher.

Management expects growth to continue in coming years as it develops and ramps up production at its Trident underground, Old Highway and Cinnamon sites.

Market Index data shows that brokers are very bullish about the outlook for the ASX shares. All brokers have a strong buy rating on the ASX shares. The average target price of $10.94 implies a potential 66% upside at the time of writing.

The post 2 ASX shares tipped by brokers to return 66% and 90% appeared first on The Motley Fool Australia.

More reading

• 2 top ASX shares to buy and hold for the next decade
• Why I’d invest $10,000 into these ASX growth shares
• Buy, hold, sell: PLS Group, Catalyst Metals, Sandfire Resources shares
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• This exciting ASX 300 stock has 89% upside: Broker

Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended SiteMinder. The Motley Fool Australia has positions in and has recommended SiteMinder. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Westpac Banking Corp (ASX: WBC) shares have endured a difficult year, falling around 9% over the past 12 months. At $34.39, the $117 billion banking giant is trading near its 52-week low.

That decline has made Westpac’s valuation look more tempting. But with several challenges weighing on the banking sector, is the weakness an opportunity to buy — or a warning sign?

Let’s see what the market experts think.

Why Westpac shares are under pressure

August was another challenging month for ASX bank shares as renewed concerns about inflation and interest rates weighed on investor sentiment.

Westpac shares are also facing several company-specific headwinds. Mortgage demand is softening, competition for borrowers remains intense, the housing market is facing uncertainty and pressure on lending margins could weigh on profitability.

That doesn’t make Westpac a bad bank, however. The lender has millions of customers, a substantial deposit base and one of Australia’s largest mortgage businesses. It is also investing in technology and expanding its capabilities in areas such as business banking.

Its latest quarterly result was reasonably encouraging. Westpac delivered $1.8 billion in net profit excluding notable items, representing a 2% increase compared with the average quarterly profit in the first half. Its net interest margin also remained steady at 1.89%.

Mortgage competition puts pressure on margins

However, there were some less encouraging developments beneath the headline numbers.

Mortgage application volumes declined as competition intensified and borrowers remained cautious amid interest-rate uncertainty. Westpac has also warned that margins could come under further pressure in the near term.

For a major bank whose earnings are closely tied to lending margins, that’s an important risk for investors in Westpac shares to consider.

What do brokers think?

The broker consensus doesn’t exactly suggest Westpac shares are a screaming buy.

According to TradingView data, nine of 16 brokers rate the stock a sell or strong sell. Six have a hold recommendation, while just one has a strong buy rating.

The average price target is $33.38, below the current share price of $34.39.

There is still a wide range of views. The most bullish forecast is $45, implying potential upside of around 31%, while the most pessimistic target suggests the shares could fall another 17% over the next 12 months.

Foolish takeaway

The lower valuation of Westpac shares, compared to Commonwealth Bank of Australia (ASX: CBA) and dividend appeal could make the shares worth considering for income-focused investors willing to accept some near-term uncertainty.

But a cheaper share price doesn’t automatically make a stock a bargain.

With mortgage competition intensifying and margins facing further pressure, the case for buying the dip in Westpac shares isn’t quite as compelling as the recent weakness might suggest.

The post Is the pullback in Westpac shares a buying opportunity? appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares I think could return more than Westpac
• How much superannuation do I need to earn $100 a day in passive income?
• How much do I need to invest in CBA shares for $10,000 of passive income?
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Motley Fool contributor Marc Van Dinther has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

In Australia, age 60 to 65 is the most popular timeframe for retirement. From age 60, you can generally access your superannuation once you stop work, or meet another condition of release. By age 65, you can access your super regardless of whether you’re still working.

But what if you don’t want to wait that long?

The good news is, you don’t need to.

Provided you have enough money to fund the retirement lifestyle you want, you can actually retire whenever you like.

Let’s investigate what retiring at age 57 might look like, and how much it might cost.

What is a ‘comfortable’ retirement?

According to the Association of Superannuation Funds of Australia (ASFA), a comfortable retirement is defined as one that enables retirees to maintain a good standard of living well beyond a basic retirement or the age pension. 

It budgets for expenses beyond a modest retirement, including top-tier private health insurance and regular leisure activities. It allocates funds for home repairs or renovations, and perhaps even an annual holiday.

How much does it cost to retire comfortably?

ASFA calculates that a comfortable retirement will cost roughly $55,923 per year for single Australians. It’s expected to cost a couple living together closer to $78,566 per year combined.

How much do I need in my superannuation to finance that?

In order to have enough money for a comfortable retirement, ASFA calculates that at age 67, single Australians should have around $630,000 in their superannuation. Meanwhile, couples will need a balance closer to $730,000.

But the only catch is that these figures assume you’ll be retiring at age 67. The calculation also assumes you will only need to fund around 10 years of retirement, will be eligible to receive a part Age Pension, and that you own your home in full.

Which means if you want to retire much earlier, at age 57, then you’ll need additional savings to support yourself for the three years before you reach your preservation and can start drawing down on your super balance. 

So, how much do I need at age 57 to be able to retire early?

First, you’ll need to ensure you can support yourself from age 57 to age 60. 

Using the figures above, that means individual Aussies will need around $167,769 set aside. This will need to be separate from your superannuation (otherwise you won’t be able to access it), in a type of accessible savings account.

Couples will need around $235,698 of savings in order to fund those three additional years.

On top of that, you’ll need to make sure you have enough in your superannuation to support yourself from age 60.

That means ASFA’s $630,000 or $730,000 guide isn’t going to be enough. You’ll need to fund an additional seven years of retirement between ages 60 and 67. 

So, I’ve crunched the numbers to work out what you’ll need instead.

At age 60, singles will need to have closer to $1 million in their superannuation. Meanwhile, couples will need a combined balance of around $1.3 million at age 60. 

These figures assume you’ll need to fund the additional seven years of retirement between the ages of 60 and 67. 

If you don’t own your home outright, you’ll also need to consider how you’ll pay your mortgage or rent.

The post How much do I need in my superannuation to retire comfortably at age 57? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.