The moments that count

Shane: Hello. My name is Shane Hancock, and I am the Head of Member Products, Guidance and Advice at AustralianSuper. And welcome to our podcast, The moments that count. Before we start, it's important to note that the information discussed in this podcast is general only and doesn't take into account your needs or personal objectives. You should assess your own financial situation and needs.

Today, this podcast is being recorded at our head office on the land of the Wurundjeri people of the Kulin Nation. I and AustralianSuper acknowledges the traditional custodians of country throughout Australia. We pay our respects to elders past and present, and extend that respect to all Aboriginal and Torres Strait Islander people.

AustralianSuper has the privilege of 3 million members trusting us with their retirement savings. Each of those members has their own story, and today we're going to hear one of those stories. I have the pleasure of being joined by Andrea Surace, a member of AustralianSuper. Welcome, Andrea, and thanks for joining us.

Andrea: Thank you, Shane.

Shane: So, Andrea, to kick off, can you share a little bit about yourself?

Andrea: Wow. Where do I start? How far back do you want me to go?

Shane: Well, wherever you want to take us. We'll start from there, and we can always wind back if we need to.

Andrea: Okay, so I'll probably start from where I think I initially was engaging with AustralianSuper, and that may have been when I was working with an insurance company in the city. So they may have started me off with AustralianSuper.

I can't remember because the years go by and as I get older, they get a little bit vaguer. But prior to that, I was actually self-employed, so I didn't make contributions to Superannuation. I had a retail fashion shop, and then I got a job working in the city, which paid me real wages.

So therefore, I think that that's when I was engaging with AustralianSuper. So fast-forward a couple of years working there, I actually had a motor vehicle accident and they made me redundant. So then I was just involved in local government, I was involved as a counsellor with a municipality, so I was involved in that.

And that kept me going for a couple of years. And then October 2018, I had a little bit of a difficult year through the environment at the workplace. So I went overseas for a couple of weeks, and when I came back, I was diagnosed with stage four ovarian cancer. So my life turned around. I was too young to go on a pension. I had no form of being able to work and no income.

So I was very gratefully put onto a disability pension. But pension, disability or normal pension is very difficult to live on these days, even from almost five years ago. So I didn't work. I went through twelve months of chemotherapy and actually in the October of 2018 was when I was diagnosed.

But in April of 2018 I built a house in Cowes, Phillip Island, because I had a pretty nasty divorce. And I thought I just want to have somewhere happy in my retirement life and somewhere to go to. And Phillip Island and Cowes is absolutely beautiful.

So I built a house there. I had to get a mortgage to build the house and I managed. And then of course, six months later I was diagnosed with cancer. So I had twelve months of intense chemotherapy. I was also on a trial program.

I was blessed to have probably one of the best oncologists in world, and he's kept me going till now, which is very lucky. And my surgeon, I was at such a high level of cancer that I'm lucky that they gave me life because they probably could have opened me, closed me up and said, just go for a holiday, time's up.

But I'm still here and I'm still moving and living and doing what I can. So, after twelve months of long, intense chemotherapy, I used to go up to the house to have some respite because I had to stay away from the family and older people, and younger people, little ones, because I was toxic.

In December 2019, I was given a bit of an all-clear. Unfortunately, within two months my cancer was back, which means I have aggressive cancer. However, another four months on chemo, then I was put back onto a cancer medication and I have immunotherapy once a month.

This brings me around to being able to access my superannuation. So because of the struggles financially of having to pay a mortgage, having to pay for different treatments and things, I was very fortunate that I could access my superannuation through Australian Super.

And I have to say that they were nothing but fantastic, absolutely brilliant. No questions asked, no nothing. If it was 5,000, 7,000, or whatever it was that I would need at the time, I would just put in an application and they would put that in for me until probably maybe 18 months ago.

So I had depleted my superannuation, and because I can't afford to live on a pension, I managed to get just some casual work and a couple of days' work in Phillip Island, which was killing me because I needed the money.

And then, of course, the disability pension would be penalized. But I rejoined AustralianSuper because my faith in them is like they're at top of the list. And when I do get a little bit of casual work and bits and pieces, the money goes into that.

However, I have recently sold my beautiful place in Cowes, Phillip Island, because I will be ongoing with treatment for as long as I've got and driving down once a month every four weeks for treatment and in between for other visits. It's very tiring.

Shane: Taxing.

Andrea: Yeah, so that's kind of where it's at. But my parents are both 93 and I'm blessed to have them, so that's another reason I've come back to Melbourne and also I have some casual work that I get called in to do whilst I'm here and that helps. And it's closer by.

Shane: There's a lot in there, I guess, one thing I did want to say to kick off, we've known each other for a very short period of time, but I can see the strength you have to deal with your sickness because you're one of the most positive and energetic people I've met in a long time. So I don't think it's any fluke that you're fighting the battle and finding the positive.

Andrea: I've been called a fraud. I don't look like I've got cancer and I don't, and in my mind I don't think it, but I actually have very aggressive cancer, but I don't think about it because I keep saying they've got the wrong person, it's not me.

Shane: Well, as I said, the energy and positivity that you've exerted in our short period of time we've known each other is inspirational. I might just take you back a step a little bit, so might talk a bit about your career.

What was the motivation to go into your own business and what were the reasons why you moved out of it?

Andrea: I've probably grown up around fashion, women's fashion. My father was in the women's fashion industry. I've always had a passion and a desire to look out for fashion and just, like, different things and different accessories and things.

And there was a shop at this small shopping centre near where I was living at the time, and I said to my husband at the time, look, maybe I'll just take the shop for a casual. It's been up for lease for a couple of months before Christmas. So September 2002, I opened up on Grand Final day.

Shane: Don't remind me. I was at the losing grand final as a losing columnist for that day.

Andrea: Oh, hello.

Shane: You needn't bring that up.

Andrea: I can sympathise, hello, we've lost lots of times.

Shane: Last one to us. So I won't bring that one up.

Andrea: No, we won't go there. So I started in this shop, it was a big shop, and I just had a couple of racks of clothes and I blitzed it and I thought, this is me, this is what I love doing.

So I eventually took on a lease and I filled the shop and I did very well. And it gives me pleasure in seeing women coming in thinking, "Oh, I'll just have something in black or something in grey."

And sometimes I have a woman that was very plain and come in and I'd sell her a red jumper and she would go out to the dinner she was going to and come back the next day and say to me, oh my God, "All my friends said to me, you look fantastic, that is fabulous."

And that was my reward. It wasn't about the money side of it so much. I mean, that helped, but it was more about enjoying, I'm a customer service person and enjoying that relationship and saying to women, like, they'd go in the change room, I'd say, right, come out. I want to see what it looks like on you.

And giving them an honest response so that they would go out and people would say, Where did you get that? That's your best advertising and your best word of mouth in getting business. So I was there for 12 years.

Shane: Wow. It's a long time in it.

Andrea: It is a long time in retail. But around 2014, I was also then starting to work with the insurance company in the city. So I had a couple of ladies that would work in the shop for me and it was great.

And then I'd do the weekend and whatever, it was an adventure and it's something I loved doing. So it was really good.

Shane: Right. So you mentioned early on that while you're in the shop and while you had your own business, you weren't necessarily contributing to superannuation. Can you just touch on the reasons for that?

Andrea: I didn't think about it, plainly, I just didn't think to do that or think about investing or doing anything like that. Which was probably a big mistake on my part, considering I had the shop for twelve years.

But it just didn't enter my mind to put money aside for super because what was I, probably in my late 40s? So it was more about just running the shop and buying clothes for the shop and doing all those great fun things and selling things to people and building up relationships.

Shane: And what we do hear from a lot of small businesses is this but was there an element of the cash flow, of the focus on the business and paying wages and paying bills that where the superannuation element of it didn't not certainly just enter your mind, but might have been a last thought.

Andrea: Maybe I was just in the headspace of paying the accounts from the stock, paying the girls as they came through, and then just doing my best statements quarterly with my accountant.

Shane: And so you started working part-time at the insurance company and then that became full-time once you got rid of the store?

Andrea: No, I think it was full-time.

Shane: And that's when you became an employee. So superannuation contributions become more frequent?

Andrea: Correct, correct.

Shane: So you then worked at the insurance company for how long?

Andrea: About two years.

Shane: Two years. And that's when you became ill, when you were there?

Andrea: No, I had a car accident. I was waiting at the lights and the guy, would you believe in one of those safety training vehicles drove, literally drove at 60 kilometres an hour into the back of my car.

But I've got back injuries. I'm actually going in for surgery next week. But that's degenerative and also semi-related to part of the injury because everything compensates what happens. But that was a long time ago. It was like nine years ago.

Shane: So you had the car accident, you left?

Andrea: I didn't leave. They told me that I was apparently not able to, something about your duties.

Shane: Okay.

Andrea: So they just terminated me. I mean, I had been told I probably could have gone for unfair dismissal, but so much happens in your life and you just deal with what you're dealing with at the time.

Shane: Then and also going forward in relation to your cancer diagnosis, did you have insurance cover through your superannuation or outside super to cover you for illness?

Andrea: There was total permanent disability.

Shane: Yeah.

Andrea: So they actually advised me that I would be eligible for some of that, it was a small amount and I think that's why they just said we can pass it on to you. I think it was something like $5,000.

Shane: Okay.

Andrea: Which was a great help too, because I wasn't aware that I could tap into all of those things. But obviously people at the superannuation, because I contacted them, said I wasn't working. And then I had cancer and I didn't know when I'd be up to work again because my oncologist said to me, "You'll never work again", at the initial stage. And then, of course, a few years later, because I've always been on the go.

Shane: I can see that.

Andrea: And always keeping myself busy. I've always worked even when I had my children, I'd go back to work probably after my first child, it was 12 months, after my second was four and a half months and then after the third I was involved in local government as a counsellor, so that was more sort of casual type of involvement.

Shane: I want to come back to that because I find that really interesting, your motivation to go back to work. So you've talked about you want to be busy, high energy. How much was personal satisfaction and how much was financial?

Andrea: Both. I don't think that I would have been the type of stay-at-home mum that could just, I'd be bored. But that's why I sort of went back to work, also financial as well, I think it was more about getting ahead, which is like most people these days, my husband and I at the time, we built a home in an estate in Avondale Heights at the time, and there was a need.

I'm a bit of a crazy chick sometimes. I went shopping in Moonee Ponds one day and I bought this block of land in this estate.

Shane: As you do, you went to buy a dress and bought a block of land.

Andrea: I just went to do the shopping. I rang my husband, I said, you better be home early tonight because this guy's coming around for us to sign a contract. He goes, what for? I said, I bought some land for us to build our dream home on.

He goes, what? I said yes. I said, It'll be fine, it'll be fine. I'll go back to work. I was working at the College of the Arts and my second child was four months. So I went back part-time and we bought the block of land and we built our beautiful dream home. And it was beautiful. It was great.

Shane: Is that the only impulsive massive purchase you made in your life?

Andrea: I'm just an impulsive person.

Shane: I look forward to hearing more about that.

Andrea: Oh gosh!

Shane: So I did say I wanted to hear more about your time with the council because that's quite a unique career change. How did that come about? And tell me some of the enjoyment you had there?

Andrea: Okay, well, there's a lot of enjoyment and there's a lot of pain.

Shane: Okay.

Andrea: So I think it was 1986, we were in the house in St. Bernard's Estate in Avondale Heights, and there was a large corner allotment in which the Ministry of Housing was going to develop 23 units.

Now, we're talking about a lot of European people and a lot of people who had come from inner suburbs like Kensington and Footscray and all those areas and bought their land and built their dream homes.

So the fact that Ministry of Housing were going to put 20 odd units on this corner block with no consideration of the character of the area was a bit of a stunner for the community. Hence, I get on board.

Shane: Yeah, as you do.

Andrea: And apparently this is the longest case that the Ministry of Housing have ever had to deal with.

Shane: And what was the result?

Andrea: I wonder why. The result was they were going to build this, what they call Neapolitan brick colour, so the cream pink and red brick colours, and they were going to have 23 or 24 units.

So through all the trials and tribulations and almost getting to Supreme Court, we managed to get a compromise of a better outlay, a better-looking development, and a compromise of a reduction in units, so hence the development went up.

But during that time people used to say to me, oh, why don't you run for council? Why don't you run, we need somebody like you that is outspoken and that is supporting the community and the people. And I'm non-political, I said, okay, I'll put my hand up, I had no idea, no idea what to do.

This was with the old city of Keilor, so I ran for council. There were two other candidates, the sitting incumbent, and there was another guy who was a local. So I just went one, two, three on the card because you've got to show your preference.

I had no details about myself, nothing. And I got elected. I remember I was in bed, my husband rang me about ten to twelve at night, and he goes, you're in. And I put the phone down and I said, oh great. And I put the phone down. I was exhausted. I've been standing on polling booths all day.

So I had nine years at the Keilor Council. I ran consecutively for every three years and got elected. And we eventually had more of an independent council at the time. I was also the first woman mayor of Keilor in its 118-year history.

Shane: Congratulations.

Andrea: Oh, yes. So you're sitting with a bit royalty here.

Shane: Right, I'm feeling like I had to sit up straight. So how long in total were you involved in local government?

Andrea: 17 years. I had nine years at Keilor Council. And then I had eight years at Moonee Valley Council. So that was a bit of a feather in my cap, I suppose, but I did it more because I loved doing it and I loved trying to achieve things for the community.

Shane: So just getting back a little bit to planning for retirement. So we've talked about some setbacks that you've had in your divorce and particularly your health. Before any of those happened, did you have a plan, retirement plan in place, and if so, had you sought help or advice from anywhere?

Andrea: No.

Shane: Okay, so it was more, you hadn't thought that far ahead, then both of those significant life events happened, and you then had to reassess...

Andrea: Life-changing, life-changing. However, as I think I mentioned earlier, that when I was diagnosed with cancer, I went and saw my doctor on a Thursday. She had sent me the previous Friday and Saturday for some scans, and I went and saw her on a Thursday, and she was the one that said to me, there's a large tumour on your right ovary with suspicious malignancy.

So in my mind, I thought, oh, okay, I'll just have a hysterectomy and on with my life. And then she said, I want to get you in with someone straight away. So I had an appointment on the Monday, Tuesday, I was on the operating table, riddled with cancer, absolutely chock a block full of it, and a secondary cancer in the liver. Large tumour in the liver.

Shane: Yeah. So I asked a little bit before, you were honest that you didn't have a plan, and obviously that hit you for six in multiple ways.

Andrea: Yes.

Shane: From a financial viewpoint, did you then post that and the divorce and the house and other things, did you put a plan in place then?

Andrea: No. What happened was I was already divorced, and that was another long, drawn-out situation, but we won't go there. So basically, I was living in Melbourne. I was renting, and I just had the house sitting there.

I mean, that was my principal pace of residence. I had to rent in Melbourne to keep myself going to and from hospital. But I was lucky that with the counsellor role, you get an allowance, and that helped me to cover my rent at least.

And I was put onto a disability pension because I couldn't work. So, look, you just manage. You just juggle things around, depending on your circumstances. And for me, once I was going through those motions of then making that decision to move back to Phillip Island on a permanent basis, there were things that I needed to do there, so I needed to get all my garden done.

Or I didn't need to, but I wanted to, so I put in a pergola. So I accessed my super and I was able to do that together with needing those funds for other surgeries or medication or whatever I needed, which was fantastic.

Shane: Yeah. And it's an important point you make, obviously. We have this view that the purpose of superannuation is to fund someone's retirement, and not always do people get to choose when they retire. Quite often people don't get to choose when they retire through illness or loss of job.

So you're showing some evidence of how the money was there, it was saved appropriately, but you used it at a different stage of your life than you maybe had planned to, but it was still accessible for you.

Now, tell us a little bit about retirement now. What are the things that you enjoy doing? I know you might have said you're back doing a little bit of work now, but tell us a little bit about what retirement time looks like. And you've just moved back to Melbourne today, so we feel very--

Andrea: I'm exhausted!

Shane: I'm feeling a little bit guilty about getting you out here after that move, but tell us a little bit about the things you've enjoyed doing in retirement and post the illness and things that keep you going.

Andrea: Oh, gosh, not much, but little because of COVID I mean, everyone was locked down for so long. It just changed so many people's lives and things. And then that was 2020. In 2021, in April, I moved to Cowes.

That's when I moved in. And I've been there for just over two years. So I suppose what's fulfilled my time there has been just doing things to the house, enjoying the serenity. I mean, my home overlooked the wetlands and paddocks and the tip of the ocean, and it was just very therapeutic and very relaxing for me.

I have amazing neighbours who I'll miss dearly, but I've told them I'll go back and I'll spend some time with them. So it's been an interesting time for me up there because, as I said, I ended up having to get part time work.

And this gift shop had a little sign in the window and I just walked in, I said, oh, I'm interested if you wanted me, "Yeah, come in Wednesday." And then, yes, I was working there three days a week, so that was really good.

That helped me. Prior to that, I was even doing, it was killing me, mind you, a little bit of cleaning. I started off as a guest on reception, guest operations manager or whatever, and then there wasn't any work for it.

It was in one of the cabins and the vans and things that they lease out. So I said, look, I'll take anything. So I did a bit of, they had some spring cleaning jobs. I love cleaning, so a little bit OCD about it, but anyway, so it was good.

So I was doing one day here, one day there, and some bits and pieces when they needed me. It's keeping me active and I actually enjoy it. So I'm one of these few people that do enjoy cleaning or gardening.

Shane: But that was about helping you out from an income viewpoint, you obviously--

Andrea: And also to keep myself busy. I've always been busy. I've always been on the go. I've not been one to sit around and watch TV or sit on my phone all day or do nothing. I can't do it. It brings me down.

Shane: Am I right to say that the security of the house in Phillip Island was really important to you?

Andrea: Absolutely.

Shane: So you talked about the struggles from the pension and obviously using the super.

Andrea: That was my super. So, apart from having a mortgage, that was my super. I managed and then it just got to the point, because I depleted my superannuation, I was getting financial anxiety and I couldn't do the things I wanted to do all of a sudden, oh, the car needs a service.

Oh, you need new tires. Oh, you need this. Oh, you need that. And my income wasn't cutting it. And also the drive to and from Melbourne when I have my treatment, I'm very tired. So just...

Shane: It makes sense.

Andrea: Probably...

Shane: And your family's up here too.

Andrea: My family are all here and I've got new grandchildren, I've got five altogether and I just want to be here and be close to them a little bit more. I do miss Phillip Island and I've said to the kids, we'll get an airbnb, all of us, and we'll go up at once a year or something and have some time there.

Shane: Yeah. And you've done a little bit of travel recently too, you touched on?

Andrea: Yes, I actually booked a cruise, a Greek island cruise, back, was meant to be 2020, so that was postponed till February last year.

So it was Greece, Israel, Turkey, Cyprus and places within those countries, which was absolutely beautiful. Really beautiful.

Shane: Lovely.

Andrea: Yeah.

Shane: Just before we finish up. So clearly your path to retirement had some turns that you didn't expect and you had some career changes as well, on reflection, whether it's with your children or with anyone else, are there any tips that you'd give people in relation to consideration for their retirement or superannuation through your experience?

Andrea: Like I said before, your life takes a turning point and it could happen to anyone at any time in their life. We've got no guarantees what's going to happen to us, and we're all dealt with a pack of cards and as they come up, we deal with it. Live your life, enjoy your life, but also know that you need to have some security in the future, so you've got to find a balance.

And I think the balance is important. For me, I didn't think of that and I just went ahead and did everything. But like I said, I've been lucky enough to get a little bit of casual work, do a little bit of part-time things.

I've sold my property, so that's alleviated my financial anxiety. And I will actually have some money left over, which I'm intending to put into my superannuation, because I know that that's a good investment and that if there is a need for me to fall back on that, hopefully not, and it can sit there.

And if there is a need, I can access that to do things that I need to do. But at least with selling the house, I don't have a mortgage, I've only got a body corporate that I pay and my rates and whatever, like most people have, and electricity and just vehicle running and things, and then hopefully I can enjoy some time and love to travel.

Shane: Andrea, I think you said you didn't have a plan, but to me that last little bit sounded like you have got a plan.

Andrea: Yeah, there's travel on the books.

Shane: You've made some decisions around selling the house and whilst there's some emotional challenges with that, you're doing it for the right reasons and you've got a plan.

You also mentioned a minute ago that you were lucky enough to get a job here and there. From the time I've known you, I don't think there was any luck in it. I think it's personal drive and who you are has got you there.

I've really enjoyed our conversation today and meeting you. I think your story is one of inspiration to a lot of people and the positivity that you can take in your life.

Andrea: That's important. I mean, when I was diagnosed and I lost my hair and I went through that thing and people would be, "Oh, my uncle died of so and so and my auntie died of this..."

And then you'd hear the good stories about, well, my cousin had a thing and she's still here and I'm going, "I love that". You've got to hear the positive stories. So here's me, four and a half years down the track.

I'm lucky to be here. Probably shouldn't, but I am. And I intend to be here for another 10 if I can. Because as I've said to my kids, my grandson, who's now 10, I've said to him, and when you're 18, you'll be taking Nana to the disco and my granddaughter's 16, so I've only got two years for her to wait. So there you go. I need to hang in there.

Shane: She can drive you there now, she's a learner.

Andrea: She can!

Shane: I've got no doubt that what you want to achieve for the rest of your retirement that you will. And like I said, it's been a real pleasure talking to you today. Thanks for joining us and enjoy the next phase.

Andrea: No problems, thanks, Shane.

Shane: Thank you for joining us today. If you're an AustralianSuper member and you would like to join us to share your story or have a question or topic you would like us to cover, then click the link in our show notes to get in touch.

If you've enjoyed this podcast, subscribe and share with your friends and family. See you next time.

Shane: Hello. My name is Shane Hancock, and I am the Head of Member Products, Guidance and Advice at AustralianSuper. And welcome to our podcast, The moments that count. Before we start, it's important to note that the information discussed in this podcast is general only and doesn't take into account your needs or personal objectives.

You should assess your own financial situation and needs. Today, this podcast is being recorded at our head office on the land of the Wurundjeri people of the Kulin Nation. I and AustralianSuper acknowledges the traditional custodians of country throughout Australia. We pay our respects to elders past and present, and extend that respect to all Aboriginal and Torres Strait Islander people.

Quite often, AustralianSuper members will ask questions of the found through various channels, and mostly those questions are relevant for many members.

So we thought it would be great if we could share some of those questions and answers through this podcast. To help answer these questions, I will invite a guest expert to join me on the podcast. And today I'm very happy to be joined by Dale Barratt, Financial Planner, at AustralianSuper.

Dale provides advice under the license of Industry Fund Services and has been a financial planner for over 20 years. Welcome, Dale.

Dale: Pleasure. Thank you.

Shane: No problem. So we have received the following question: "My husband is 63 and I am 61, and we retired three years ago, we are unsure if what we have set up is right, should we change what we have set up or leave it or see a financial planner which, as a self-funded retiree, is expensive... I would love an episode that tells us what to do after we've retired. Thank you."

Really great question, Dale, and there's a number of components to that question, so I thought we'd break it down a little bit. So after someone's got advice or set up a retirement plan, should they keep getting that advice after they've retired?

Dale: Yeah, again, it's a really good question, Shane, and thanks for the member for actually asking it. Look, I'd say it's not so much have to, but more the value of, just because a person is retired, change is constant. People's circumstances change. Financial markets are constantly changing. Governments make changes to law.

Social security qualification criteria can change. Just keeping on top of all this is very difficult. So to ensure retirees are making sound decisions in an ever changing environment, reviewing one strategy with a skilled and experienced financial adviser is often the most effective way of going about this.

Shane: And there's probably too, Dale, what we're seeing more and more is people living longer, which is fantastic, and so therefore people's retirement is actually longer. So you've touched on changes even to their own needs during that period of time?

We see, quite often we hear from members who have got a pathway in the first part of retirement and then, whether it be through health or financial situations, have a change in their circumstance. So you've talked about a lot of change in there, but that longevity of retirement is really important. So how often should someone seek advice or help post retirement?

Dale: Yeah, good. That's a good question and frankly, it's one that we get asked quite a lot. And look, I think it just really comes back to what's the complexity of the person's overall position.

But nonetheless, I think looking at a stereotype, typical retiree and sort of coming from my sort of two decades of experience of dealing with retirees, those who review their circumstances and position and strategy on a regular basis with their adviser every sort of 18 months or so and importantly, keep in touch with their adviser in between those meetings, if you like, are arguably in a better position, both financially and indeed, psychologically, than those who do not.

Shane: You made a really valid point there around the psychological part of it. And so, from your experience, whilst people might be checking in 12 or 18 months, there's not always going to be a change that is required to the plan. But there may actually be just a level of comfort that they can get from their planner or their super fund that says that you're still on the right track for the next part. Has that been your experience?

Dale: I think that's very accurate, just working with your adviser and you get to know people on a one-to-one basis the longer you work together, I guess the trust grows. I guess from a member's perspective, I suppose if they've been talking with their adviser on a regular basis.

And that's something that's very valuable for retirees to know that they're continually on track and making good decisions relative to that particular moment in time in their lives.

Shane: And this wasn't part of the question, but something that prompted me to follow up with this in your answer is that quite often we see people making retirement decisions as a couple and sometimes one of the couple may pass on.

And so having a financial planner who is aware of your financial situation, I'm assuming would help with that financial transition anyway. Have you seen that through your experience?

Dale: Yeah, in fact, I'd even expand on that. I mean, absolutely right. Definitely the quantitative side or the numbers or the financial side is really important and that's what advisers are there to help clients and members with. But when there's a trigger event like that in someone's life, obviously that's difficult and stressful for the person.

But knowing that they can reach out to a trusted person and help them through that stage not just the financial decisions, but I'd argue the emotional support, that's something really important and valuable, that long-term financial advice clients, I believe, gain from their adviser, not just the how do I invest my money.

Shane: Great. So going back to the question asked by the member, there was an element of the question that talked about the cost of advice and the view that in some cases it's expensive. What would you say to someone who thinks advice is too expensive for them to get?

Dale: I think to a certain extent, the cost of something is in the eye of the beholder. We either see something as expensive or we see something as valuating.

And I guess that comes down to the individual. But going back to what I said earlier, change is constant. And just because we make a strategic decision or a piece of advice at a given moment in time, that doesn't mean it continues into perpetuity.

It's wise to kind of check in with your adviser and check that you're making the right decisions every now and then. As I've just talked about, I mean, retirement all being equal, if I retire at 65, I could be retired for 30 years, more possibly if I get to centurion.

Shane: Getting back to that cost viewpoint when you're talking to a client and you end up talking about the cost of the advice versus the value of the advice that they're receiving, how do you articulate that in a conversation?

Dale: Yeah, well, obviously the cost is a quantitative figure. Everyone can see what the cost is because an adviser obviously will explain to someone what the cost is to do a piece of work. Again, the value is derived not just in the economic trade off or the sensibility of taking a given path, but knowing emotionally that you're making the right decision and you're working with a trusted person that you've got to know over the journey.

I think that's what most retirees would say about the value they have with their adviser over the retirement journey, not just that trigger point of retirement.

Shane: So there was one element of the question that we received which talked about the member being self-funded and also which could mean that they're not eligible for the Government Age Pension through their assets or income, but also looking at their age as well.

These two particular members being 63 and 61, there's obviously an accessibility issue there. Should someone seek additional advice or seek help and advice once they reach the Government Age Pension age or if their circumstances were to change to ensure that they are getting access to all the benefits there, could be?

Dale: Yeah, I think generally speaking, that's an accurate position to take. I think if a person is likely to be eligible for social security benefits upon reaching Age Pension age, revisiting one's position at that time is generally a sensible step.

I think, as I mentioned earlier on, change is constant and a person's ability or not to qualify for benefits a number of years out from Age Pension qualifying age could actually be different when they reach that point, either in a positive way or perhaps not.

But that aside, sometimes it's not just the age pension itself that's relevant in terms of receiving benefits. So just looking back on some of my experience and helping people over the journey, some people have unfortunately found that they haven't been able to qualify for Age Pension at qualifying age, so that they think that they're actually not eligible for anything at all, when in fact, they would have been eligible for things like the Commonwealth Seniors Healthcare Card, which in itself can be quite a valuable, if you like, concession.

So, looking short, reviewing one's position at pension age with a qualified professional is frankly a wise step for most people I'd argue.

Shane: And even post that because people's situation can change, particularly as it relates to their assets or their income. If people are depleting the self-funding nature of their assets or their income, that can make their eligibility, make them eligible for benefits that they weren't aware of.

Dale: Yeah, I think that's a great point. I mean, just because a person doesn't qualify for benefits at that date in time for qualifying age, that doesn't mean that they wouldn't qualify a year, two, three, five years later. Or indeed one might even take some steps to bring that forward if the situation is right.

So again, if someone's really seeking support via Age Pension or otherwise, it's complex system and getting some guidance and support and good advice from a professional adviser is really important to make sure that you get the benefits that you're entitled to.

Shane: And do you quite often see members that come to you that didn't realize they could access a government benefit or if they restructured their investments a little bit differently, that would gain them some access, even being small access?

Dale: Absolutely. Again, it's a really good question. All I'd say there is people respectfully don't know what they don't know. That's why they're coming to see us. And our job is to know how the system works and what steps one can take to qualify for benefits and thus giving people quality advice based on their experience and knowledge and sharing that with members to enable them to get the best outcome.

I found many time that members have been very pleasantly surprised that they've obtained benefits when in their own mind they'd come to that meeting with the presumption that they would never obtain anything. So that can be a very, very positive experience, quite naturally.

Shane: Well, Dale, I think you've answered the member's question. Hopefully they're listening and able to hear those answers. Thanks for joining us.

Dale: Pleasure. Thank you.

Shane: Thank you for joining us today. If you're an AustralianSuper member and you would like to join us to share your story or have a question or topic you would like us to cover, then click the link in our show notes to get in touch. If you've enjoyed this podcast, subscribe and share with your friends and family. See you next time.

Shane:Hello. My name is Shane Hancock, and I am the Head of Member Products, Guidance and Advice at AustralianSuper. And welcome to our podcast, The moments that count. Before we start, it's important to note that the information discussed in this podcast is general only and doesn't take into account your needs or personal objectives.

You should assess your own financial situation and needs. Today, this podcast is being recorded at our head office on the land of the Wurundjeri people of the Kulin Nation. I and AustralianSuper acknowledges the traditional custodians of country throughout Australia. We pay our respects to elders past and present, and extend that respect to all Aboriginal and Torres Strait Islander peoples.

AustralianSuper has the privilege of 3 million members trusting us with their retirement savings. Each of those members has their own story, and today, we're going to hear one of those stories.

I have the pleasure of being joined by Debra Velo, a member of AustralianSuper. Welcome, Debra and thank you for joining me today.

Debra: Thank you, thanks for having me.

Shane: So, Debra, tell me a little bit about yourself. 

Debra: I'm 66 years old. I retired 12 months ago. I just thought that I really want to do some travelling, I didn't want to work too late and be too sick to do anything. So I thought it was a good time to do it. 

Shane: Excellent, excellent. So, before we get into the why retirement, tell me a little bit about what you did for work?

Debra: Yeah, I worked in child care for nearly 20 years. Yeah, changing lots of nappies and it got a little bit hard towards the end, getting off the floor, getting up and down. So I just thought it's really time to stop. 

Shane: I know you talked about the nappy changes, that would've been the fun part. Were the elements of the role, the job that you enjoyed?

Debra: No, when you have to do 15 at once. 

Shane: Wow, look out!

Debra: Yeah, I'm an expert nappy changer. 

Shane: And what about the job, were there things about it that you really liked? 20 years is a long time to do that career.

Debra: Yeah, some bits are great, when they come running to you, calling your name and look out for you. That's the good part.

Shane: Yeah, I got three kids myself, and you're an amazing woman for doing child care for 20 years. So, well done! You briefly touched on, you've been retired for a year, the work you think was getting a little bit too much for you and you wanted to think about why you wanted to retire, were there any other triggers that made you think about retirement?

Debra: I actually was gardening at home and I rolled down the hill and hurt me knee. 

Shane: Was that an intentional roll or you just accidentally? 

Debra: No, the tan bark slipped and I ended up on the bottom 'cause it's on quite a hill. And my knee was quite sore for a long time and I thought I'm not going to be able to travel, my husband's going to have to push me around in a wheelchair! That scared me a bit. I thought I've left it too late. But luckily, it healed and now travelling is deep in our thoughts. 

Shane: So, was that accident, was that the first time you really thought, okay, I really wanna do something proactive about my retirement? 

Debra: Yeah, it probably was. And I had to have a fair bit of time off work and then I went back. It sort of healed, I went back and then I triggered it again. Getting up and down and I sort of thought, it's time to stop.

Shane: And I know speaking to you previously, you had a friend that became unwell, and that might have also meant something--

Debra: Yeah, I've had a lot of friends, I had one that died before they even got to retire. And a lot of other friends sick and knee replacements and cancers and stuff. So I didn't want to leave it too late, they didn't even get a chance to enjoy retirement. 

Shane: Yeah, yeah, and you mentioned your husband a couple of times. Is he retired as well? 

Debra: Yeah, he eventually retired the same time as me. So we've moved out to a semi-rural 'cause we didn't have to travel to work anymore. So most people downsize it at our age, but we actually upsized and went to a bigger land, so we're on an acre. 

Shane: And so tell me about that, beyond the travel, what was the desire to have some more land? 

Debra: Oh that was him really, because he's deep into cars and the garage was not big enough.

Shane: Right.

Debra: So I was quite happy to stay where I was, but the garage wasn't big enough, so we looked around and to get closer in was quite expensive, and we just sort of went out a little bit and I was a bit reluctant at first, but he talked me into it. So he's got his big garage with his hoist and he's quite happy now. I never see him, he's in the garage more than he's in the house. 

Shane: And what about yourself, what does retirement look like for you? He's in the garage and what are you doing? 

Debra: I seem to keep busy. I don't know how I fitted work in now. 

Shane: Yeah. 

Debra: But there's a lot of gardening because the people we bought the house off was a landscape gardener, so I thought, oh, it's all established, don't have to do much, but the weeds just keep growing, so, yeah, I usually do a bit of gardening every day. I've got the grandkids to see, I go out for lunch, got quite a few friends that are already retired, so I seem to keep busy. 

Shane: Yeah, we actually do hear quite a lot from people that retire, that comment that you just made was, we don't know where we had time to work before, and that's probably a good sign of a proactive and positive retirement.

Debra: Yeah, and he's busy, too, so, yeah, we don't regret it and we love it. And we've got a lot of ski holidays planned, not snow skiing, but spending kids' inheritance. We've got a few of those holidays coming up, so we're going to Phuket next month. We love our cruising, so we're going on a cruise in October from Hawaii. So, yeah, we're really enjoying it. 

Shane: Great. And so you said you had some grandkids. How many grandkids have you got? 

Debra: Nine. 

Shane: Wow.

Debra: Yeah, I've got seven, he's got two. We've sort of had a split-up marriage, which doesn't help your financial situation much. So we've got nine between us, eight boys and one girl.

Shane: Is she the spoiled one?

Debra: Yeah, she will be. So they range in age from twelve to a month. 

Shane: Now I'm picking based on your comment about why you left your childcare job, you're not putting your hand up to do too many nappy changes for the new one?

Debra: I will be probably.

Shane: A little bit. Yeah, but not as many as 15 at a time. So just going back a little bit of a step here, there was a trigger for retirement and there was a health issue. You're thinking about, okay, I want to be able to be healthy enough to travel and enjoy retirement and your husband to work on his cars. Did you start thinking about what retirement might look like and how you'd plan for retirement before that sort of time where you were retiring and if so, when did you start thinking about it? 

Debra: A little bit. We sort of always looked at going to a seminar and every time we sort of tried to get one, they were cancelled because of COVID so we never got to one. But yeah, seriously, only when I hurt my knee, really. And then we looked at a webinar online, we sat down and listened to that and we've done a lot of reading online, all about it and thought, this is the time to do it.

Shane: Right. So you've learned what you wanted to know. So when you got to the stage of retiring, so that decision about what to do with your superannuation or age pension, are you self-funded retirees, are you accessing age pension? 

Debra: We will be self-funded unless we spend too much on holidays. 

Shane: Yeah, well, it's not a bad thing. 

Debra: Yeah, I don't know, we'll have to see. We're too young anyway at the moment, so when we get to the age, we might get part pension. We'll see how that goes. 

Shane: Yeah. So you've done the investigation, you watched webinar, you've looked at some information and then the decision to implement an income stream, that was something that you did yourself and how did you find that experience?

Debra: Yeah, that was quite simple. Looking online, what to do, we went through that and set it up. And like getting income without working, it's quite good, money is going into the bank and I don't have to work. So it's quite good.

Shane: So you've used that term quite good, is it fortnightly? Monthly?

Debra: Fortnightly. 

Shane: So you're getting paid basically by yourself every fortnight. So there's obviously that financial piece. But I'm getting the sense there's an element of assurance that you know that's going to happen and you don't have to worry about it. 

Debra: Yeah. And what actually surprised me, I've been getting it for twelve months now, looking at how much it's gone down, it hasn't gone down that drastic because it is invested. People think it just sort of goes down straight away and it hasn't, so quite happy with the way it's going. 

Shane: And have you had any, I know it's only been a short period of time, but in your planning for that spending, you talked about going on holidays and other things, which is fantastic. That's what retirement's about. Have you thought about that ongoing monitoring, is it something you just continue to do yourself and reassess as you go? 

Debra: Yeah, we'll just keep checking how it's going and reassess then, if we get broke, he'll sell one of his cars.

Shane: So, when you were thinking about their retirement prior to or after the fall and other things, was travel the main area of focus for you? 

Debra: Yeah, we like to travel, we like cruising and then when it shut down because I haven't been able to go anywhere so making up for it now. 

Shane: I meant to ask you this before, is the COVID, was just before you were planning your retirement, did that delay your retirement in any way? 

Debra: Not really, it probably helped because I didn't like really being in childcare when there was so much of that around so that probably prompted me to leave a bit earlier.

Shane: So you're worried about yourself being unwell? 

Debra: Yeah.

Shane: Through that, okay. And what about your husband's decision to retire? Was that triggered by your decision? 

Debra: No, he was ready too as well, I was going to work a bit longer than him, but then it just worked out we virtually did it together, wasn't really planned, but that's the way it worked out. 

Shane: What sort of work was he doing? 

Debra: He was a fireman. 

Shane: Right, okay. So he's had quite...

Debra: 43 years in fire brigade. 

Shane: Wow, that's a big contribution. 

Debra: Yeah. 

Shane: So physically for him, was it at the stage where he was thinking, "Well, I've done my bit."  

Debra: Yeah. So actually, he bought a Corvette. That was his retirement present to himself, a 2000 model. But still, it's a show model, show car. And he's got a hot rod that he built from scratch, so that's why he needed a bigger garage.

Shane: Yeah, exactly. Right. 

Debra: So we've got four cars. 

Shane: Yeah. Okay. So, Debra, you said you obviously retired with your superannuation. Had you been contributing to super prior to retirement yourself, outside what your employer was putting in?

Debra: Yes, I did the last few years. But I really wish I had done it earlier now. I keep telling my kids that, but they sort of think retirement is a long way off, and I don't think I've got through to them, but I keep saying, put a little bit in, and by the time you retire, it's going to be a lot. So I hope they listen to my advice, but they usually don't. 

Shane: And that decision to not contribute yourself earlier, we understand, I know the situation, I mean, with young children and others, it's not always possible for you. Was it that or was it understanding, knowing whether what you could or how you could contribute to super? 

Debra: Yeah, I just didn't really think about it when I was younger. It seemed so far off, but it seemed to come before you know it. 

Shane: Yeah. And your husband being in the fire brigade, he would have had a different sort of set-up of super.

Debra: Yeah, he's got his own sort of super scheme. But when he split up his marriage, he lost a lot of the super to her. 

Shane: And so that situation for both of you, because you mentioned yourself, you went through a separation as well, did you have to reset your financial goals as a result of that? And how long did it sort of take you to feel comfortable that you were heading in the right direction?

Debra: We just sort of got our heads together and worked out what we wanted to do. So our plan is to stay in this house maybe ten years and then downsize. We don't think we're ready to go too small yet, so it seemed to have worked out pretty well. 

Shane: It's been a pleasure talking to you, Debra, and thank you very much for joining us. And good luck for the next phase of retirement. Enjoy those cruises and holidays that clearly are well-deserved. So thank you for joining us.

Debra: Okay, thank you. 

Shane: You thank you for joining us today. If you're an AustralianSuper member and you would like to join us to share your story or have a question or topic you would like us to cover, then click the link in our show notes to get in touch. If you've enjoyed this podcast, subscribe and share with your friends and family. See you next time!

Shane: Hello. My name is Shane Hancock, and I am the Head of Member Products, Guidance and Advice at AustralianSuper. And welcome to our podcast, The moments that count. Before we start, it's important to note that the information discussed in this podcast is general only and doesn't take into account your needs or personal objectives.

You should assess your own financial situation and needs. Today, this podcast is being recorded at our head office on the land of the Wurundjeri people of the Kulin Nation. I and AustralianSuper acknowledges the traditional custodians of country throughout Australia. We pay our respects to elders past and present, and extend that respect to all Aboriginal and Torres Strait Islander peoples.

AustralianSuper has the privilege of 3 million members trusting us with their retirement savings. Quite often, AustralianSuper members will ask questions that are found through various channels and mostly, those questions are relevant for many members. So we thought it would be great if we could share some of those questions and answers through this podcast.

And today, I'm very happy to be joined by Natashya Vikram, Financial Planning Manager at AustralianSuper. Welcome, Tash!

Natashya: Thank you, Shane! Great to be here.

Shane: Today, we want to cover the topic of redundancy. So, Natashya, can you tell the audience a little bit about what is redundancy?

Natashya: Sure. Redundancy is actually when your role or the type of work you do is no longer required to be done. So it's not so much you becoming redundant, it's the job itself. So it might be a case where your role can now be made part of someone else's job. An example could be operational changes within a business.

Shane: Actually really interesting point you made there, Natasha, about the role being made redundant and not the person, 'cause there's obviously a real, personal impact feeling there.

Natashya: Absolutely. There's emotional attachment and people sometimes identify with the role that they do as who they are. So it's really important for them to be able to differentiate that it's the job, it's not you.

Shane: That's a really good point. So there's a clear connection clearly between superannuation and employment. So quite often we do get asked about what happens to my super if I'm made redundant?

Natashya: Well, the good news is you can still retain your super. Just because your role has been made redundant, and your account will actually still remain active even if you're not working. There are some provisions to that, if your account balance is below $6,000 or if in the last 16 months, there's been no action on the account.

So for example, you haven't received a contribution to the account, you haven't changed your insurance cover, which may be within super, you haven't updated a beneficiary nomination, or if the balance is lower than 6,000, you can advise us that you don't want it transferred over to the ATO.

So what I mean by transferred is when your super balance gets below $6,000, the account then gets transferred to the ATO to effectively help make sure that low balances are not eroded by fees.

Shane: So, you talked about you then don't have to do anything with your super? So, clearly, if someone is made redundant and they're not working, so they're looking for new jobs, there's still the long-term investment strategies that apply to superannuation, so none of that changes whether you're working or not?

Natashya: No, we still go through your long-term plan and sticking to that plan is very important. What you can do though is check with your super fund if you are feeling concerned about that, there are people on hand to discuss your investment options, the stage of life you're in and whether that's impacting on where your money is currently invested.

Shane: So, Natashya, tell us in certain situations where someone's lost their role and they've obviously lost their income. Are there ways in which they can access their super to supplement that income?

Natashya: There are ways to do that. Now, what needs to happen is you must meet something called a condition of release. Those include things like meeting your preservation age. So, preservation age is the age when you can actually access your super, if you're retired or transitioning to retirement.

Other conditions of release are severe financial hardship, compassionate grounds, in very sad circumstances, terminal illness or permanent incapacity, meaning that you won't be able to return to the workforce again. And if you're permanently leaving Australia to reside in another country.

Shane: So there's a couple there that probably might play into the redundancy space. So clearly if you've reached preservation age, you might think about retirement earlier or part retirement, or severe financial hardship, you talked about probably the two that are most prevalent in redundancy.

Natashya: Yes, and we do see that. People often are given a redundancy and were not thinking about retiring in the short term, but that has propelled that feeling or conversation to have. So they often will come and seek advice at that point to work out what the next step might be for them and that may be a transition to retirement which might mean reducing work hours or it might be permanently retiring if they can afford to do so and want to do so.

Shane: So just on that point which is a really good point, Tash, and you currently manage a team of financial planners and were previously a financial planner yourself. If someone's put a financial plan in place, generally it's a long-term plan. Redundancy often comes out of the blue.

If one of your team's clients comes back and gives you that information of, "I've been made redundant, it's not part of the plan..." What's the process through which the planner would then go through with that client?

Natashya: The beauty of a financial plan is that it's flexible and it moves with you. So whatever you need to do or if your circumstances change, we'll work with that. So the best thing you can do is come and speak to your advisor. They will take into consideration your new circumstances and then work out what the best step forward will be to make sure you still have that retirement outcome you're looking for.

Shane: And that, I'm assuming your provide the same information that someone who's been made redundant, who hasn't sought advice, it's never too late?

Natashya: It's never too late. I mean, the sooner you come in, the better, because we can obviously do more, but it's never too late, we can always do something to put you in a better position.

Shane: Excellent. Two last questions, so Tash, many members have various forms of insurance through their superannuation, so what happens to someone's insurance within super if they're made redundant?

Natashya: The good news, Shane, is you can usually keep your insurance within your superannuation account. The best thing to do is check with your super fund, just to make sure whether those insurance premiums are being covered by the super fund itself or whether the employer was actually paying for some of those premiums.

Shane: So there's various forms of insurance that we touched on, generally, death, total and permanent disability, but one form is income protection. Is being made redundant allowing you to access that income protection insurance?

Natashya: Unfortunately not. So, income protection is designed to protect income and provide you with income in the event that you suffer an illness or injury and temporarily can't go back to work. Unfortunately, redundancy is not covered in that.

Shane: And lastly, what are two easy actions that you think someone should take or could take when they're made redundant?

Natashya: One thing to consider is actually pausing any additional contributions that you make to super, depending on what your circumstances are. You might be in a position where you can't afford to do that for the time being, and you can revisit that later down the track. Another thing to do is to search for any lost super that you might have and consider combining those accounts.

Shane: Great, thank you, Tashya, those are some great tips. As mentioned at the beginning, the information that's been provided today is general advice only and doesn't take into consideration your needs and personal circumstances. If you would like guidance or advice, contact AustralianSuper or your financial advisor. Thanks for joining us today, Tash.

Natashya: Thanks, Shane!

Shane: Thank you for joining us today. If you're an AustralianSuper member and you would like to join us to share your story or have a question or topic you would like us to cover, then click the link in our shownotes to get in touch! If you've enjoyed this podcast, subscribe and share with your friends and family. See you next time!

Shane: Hello. My name is Shane Hancock, and I am the Head of Member Products, Guidance and Advice at AustralianSuper. And welcome to our podcast, The moments that count. Before we start, it's important to note that the information discussed in this podcast is general only and doesn't take into account your needs or personal objectives.

You should assess your own financial situation and needs. Today, this podcast is being recorded at our head office on the land of the Wurundjeri people of the Kulin Nation. I and AustralianSuper acknowledges the traditional custodians of country throughout Australia. We pay our respects to elders past and present, and extend that respect to all Aboriginal and Torres Strait Islander peoples.

AustralianSuper has the privilege of 3 million members trusting us with their retirement savings. Each of those members has their own story, and today we're going to hear one of those stories. I have the pleasure of being joined by Eric F, a member of AustralianSuper. Welcome, Eric, and thanks for joining me today.

Eric: Good afternoon, Shane. How are you?

Shane: I'm good, thank you. So tell us a little bit about yourself, Eric.

Eric: Okay. I'm 64 years of age, was in the superannuation industry as my bread and butter, got made redundant when I was the age of 56.

So obviously a little bit too young to retire. I was lucky enough that I got back into the industry by a little Tasmanian superannuation fund, and it was on a part-time basis. It was meant to be for a three-month project.

It ended up turning into a three days for about four years and then got made redundant again. So the bell rang to say, I think that the game's over. So after my second redundancy, I actually retired at the age of 60.

Shane: Okay. There's a lot in there. Now, coming from the superannuation industry. you just reminded me to watch myself here. You might be ready to take over as host of the podcast, so we'll see how we go. So tell us a bit more about that career in super. You were telling me beforehand there was quite an extensive 30-year career, I think, in super.

Eric: So, yeah, it was a 30-year career. I was in charge of the member relationships and employer relationships. So it was quite good for me because what I would end up doing was talking to a lot of members about their retirement and how they're going about retirement. And so I was actually getting a lot of information just for myself to work out now, when's the right time?

What do you need to do and what do you need to look out for? So that was very good for me and basically I enjoyed that for 30-odd years. And then when I got made redundant, I went back a role and just became a member service person.

So I was just servicing members and telling them a little bit about superannuation and how to grow their wealth.

Shane: So, working in the industry, you hear a lot of comments about the plumber's the one with the leaky pipes. How much did you think about your own superannuation retirement when you were in the industry?

Eric: Great question, because I wanted to make sure that I was not going to be the builder that didn't have the finished house or the mechanic with the worst car in the street sort of thing.

So now I was very conscious of super in the way of the compounding interest. I understood all the theory about superannuation, so I did it quite early, where I was sacrificing quite a large portion of my salary.

My wife was doing absolutely nothing towards superannuation. She did not believe in super. So at her middle age, I finally coached her into saying, look, we've got to start putting some money away for yourself.

And now that we're both retired, she's basically patted me on the back, saying it's the best advice she's ever had. But she started off late, but she made up for it at the end.

Shane:  It's really interesting, isn't it, that you've worked in the industry all your life and we talk about the requirements and importance of engaging people early in super, and your own wife was struggling with that message.

So that can tell you the challenges that we have as an industry to get people to understand the importance of superannuation and you've experienced it in your own household.

Eric:  Without a doubt. But I've always said it's hard for the younger people to understand superannuation because there's too much life in front of us.

It's when that certain age bracket and I think it's the late 30s, early 40s that you finally start to realise what's coming next in my life. You've bought the house, you've had the kids, but they're off to school, so you've got a bit more time on your hands.

Hopefully, the mortgage is under control. So we were always taught that once the mortgage is under control, start pumping some money into superannuation. So that's what we did in our household and we reeked the benefits.

Shane:  So you mentioned earlier when you were talking about your career, about redundancy at 56, I think you said you were. So obviously you had a plan in place. You were thinking about that, now that obviously deviated a little bit.

So tell us how you felt at that time, both from okay, you said, made the point around maybe I'm a bit too early to retire. So what you're thinking around your career because you had quite a senior role, and then also, how much is this taking us off our track for retirement?

Eric:  Yeah, another good question about retiring. So at age 56, I said to myself, look, it is a bit too young to retire, and I probably didn't have quite the funding behind me. But the one thing it did do for me, it actually set my retirement date, because I didn't know when to actually retire and what date to retire and what age to retire.

So getting made redundant the first time said, hey, the end is getting near. So I had enough finance behind me to say, hey, I don't need to work five days a week. As I said, I was fortunate enough to get a role that only needed three days a week.

So I was transitioning, without even knowing I was transitioning. So again, I was helped by the redundancy, but when I got to the second redundancy, I said, this is definitely it. You're now age 60. Times are moving on, so let's think about retirement.

So we went through all the calculators, found out what's the comfortable retirement, we're all well above the comfortable retirement bracket. So we both said, let's give it a go, and we both retired at the same time.

Shane: Excellent. So one of the big elements of anything is how you feel, confidence-wise, being made redundant at 56, so you've talked about the plan you've put in place, but how did you feel about that at the time?

Eric: Yeah, I was shocked, I'll be very honest. Once you've been made redundant and you're no longer needed, you do lose a bit of esteem saying, what the hell has happened to me? You're not a major cog in any organization.

So that took me six months once I got the part-time role, but it took me six months, once I was fully retired, to say, hey, this is it, what are we going to do next? And I was really lucky that I started doing a lot more golf.

I became a golf caddy at Royal Melbourne. I made a TV ad for an organization called AustralianSuper and I started working for a friend on his farm. So all of a sudden, my retirement did a 360 where I was doing a lot of things that I've never dreamt of doing before.

And I loved my golf. So caddying was absolutely fantastic. Doing a TV ad was just a fluke, and getting a job working two days on a farm was absolutely better than being in a collar and tie. Here I am getting my hands dirty.

So it was completely different and it fulfilled those little gaps in my retirement. So it made retirement a hell of a lot easy. But the first six months were very difficult.

Shane: Yeah, obviously. I'm assuming you didn't just take up golf when you retired, you were into it prior.

Eric: Correct.

Shane: So there was probably a little bit of a plan that you might play a bit more golf.

Eric: Exactly. It was good to finally be a full member seven days a week and not only playing on a Saturday afternoon. And now I could play three days a week, which was really good.

Shane: How's the handicap looking?

Eric: It's come down. It has come down. So I was sort of in the mid, the mid nineteens. And now I'm down to the sort of just on the ten handicap.

Shane: Impressive. So, just going back to the time of the first redundancy at 56, I think it's a really relevant point you make about that confidence hit around, I guess, where you stand in a certain organization and your focus.

So you were lucky to get back into that part-time work. But when it first happened, were you thinking, I need to get back in at full-time work, part-time work, how do I explore this? Am I willing to go back to something a little bit more less stressful, more junior? What was sort of your mindset?

Eric: Probably all of the above. You sit back and you sort of say, okay, yes, it was nice to get a redundancy payout. So all of a sudden, the finance wasn't a major factor. But then you start saying to yourself, do I want to go back full-time, part-time? Do you want that stressful role? Do you want to just maybe come back a notch?

I was even looking at things like, do I just go do water meter reading just for something that's sort of out of the ordinary, but fulfils your day? So because of the financial background that we had and the financial backing that we had, I could look at all those options. Whatever came up, I think I registered with Seek on a number of different job levels, from executive down to the sweeper. I didn't really care as long as I got something. And that's where the other role came up, it was just a fluke.

Shane: So you felt clearly the redundancy payout would have assisted, but you felt financially okay at 56 and retiring a little bit earlier, but the real driver for you was about keeping your mind active, your body active.

Eric: Correct, yeah. Could I afford to retire at the age of 56? The answer is yes. Did I want to? The answer is no. But I didn't quite know do I go full-time, part-time, or something in between. Whatever came up, I was going to analyze and say, okay, let's give it a go for now.

And as I said, the three-day-a-week role came up. And then again, when the next organization merged and another redundancy came up, I said, okay, we're now age 60. Let's now start playing a lot more golf.

Shane: Excellent. So, when you moved into the second role, the three-day-a-week role, you said you moved into a role which was actually dealing directly with members.

Eric: Yeah. So I was going back to what my staff were actually doing, and there was a bit of a funny story because what it was, there was the Tasmanian Superannuation Fund had all the flower industry here in Victoria, so they had no representation. And they needed to sort of get someone involved to say, hey, how do we help our employers and help our members?

So I was actually conducting member and employer sort of seminars in cowsheds and all of a sudden a cow would appear, which is completely different to walking into an office and someone else appears.

I've got cows and animals appearing. So it was completely different. And which made it exciting as well, because it was back to the bare roots of talking to members and employees about the basics of superannuation.

They didn't understand they had compliance issues, they didn't understand they had commitments and all those sorts of things. But the problem was with that industry, most of the people and their staff were non-English speaking people.

So it was very hard to communicate about you should sacrifice, you should try and put more money away, you should look at your insurances, et cetera. They didn't quite understand that. They just wanted to know, was the employer putting in the right amount of money to my super? And as far as that was concerned, they were happy with that.

Shane: And the fact that you'd been through what you went through previously in being made redundant and at an age where you still wanted to work, how much did you draw on your own personal experiences when you were talking to some of those members about the challenges and how some things don't always go to plan and that you need to be prepared?

Eric: Yeah, very much so. I could draw back on my own experiences and especially with the employers, because the employers didn't really, they looked at superannuation as an obligation and a tax at the end of the day.

But when you started talking about, hey, this will set people up for their retirement, they won't have to rely so much on the age pension, they've also got some insurances there, which means if something was to happen and that was a dangerous industry that they were in, because they were always dealing with farm equipment, et cetera.

And then the employer, once we sort of won the employers over to say, hey, super is a beneficial thing for your staff, it's not just a tax, they looked at superannuation completely differently which was which was good on my behalf and good on their behalf.

Shane: So you mentioned earlier that when you were starting to think about retirement and whether you could afford to retire, you sought out some information from calculators, education, I'm not sure if you sought advice. Tell us about that experience and one, what you're looking for, where you turned to and how you used that information.

Eric: Yeah, look, I probably attended about over a dozen retirement seminars, and they were all good because they all keep saying the same thing about having enough money and being at a comfortable level in retirement, but they never actually spoke about the emotional side of retirement.

No one had that experience about and it's all different for everybody else. Everyone's got a different attitude to retirement. I was lucky enough to speak to a lot of people who had retired, and they all came up with the same thing, initial shock, but then they wish they had done it earlier.

So once I kept hearing that, I thought to myself, it'll happen to me as well. I've got the initial shock. I'm now in retirement. I was a little bit upset about being retired, but then six months later, when all these other little things came along about the golf caddying and working on a farm, et cetera, that sort of filled some of the gaps and made retirement just a pleasure. And again, now I'm the one saying, I wish I had done it earlier.

Shane: Yeah, right. So the people you were talking to were people at seminars, friends, ex-colleagues.

Eric: Correct and especially people at seminars, potential retirees. They were about to retire in the next six months. So they looked at their finances. They were looking at what their next steps in life were. Do I purchase a caravan? Do I need a new car? Or those sorts of things.

And they were all gearing up. So I was just listening to their stories and just trying to relate what their stories are. But there was a similar pattern with everybody. They all had that thing in mind, I'm now ready to retire, but I don't know what the next step is going to be in my life. They all said the same thing.

Shane: Yeah, it's quite common. Ironically, I was listening to a podcast yesterday on another topic, and that was a very similar theme. This person had worked quite heavily for 30-odd years straight.

And yeah, that was their biggest challenge. So you're right, it's a common theme we hear from a lot of people, getting back to that financial preparation. And when you said you were looking at, again, reiterating the question around tools and calculators or advice, was that something you sought from your super fund?

I mean, obviously you're in the industry, so you sort of understand where to go. That's the first part of the question. And secondly, how did you bring your wife on that journey in sort of educating her, using some of those tools if you did?

Eric: Yeah. So the good thing was with the major industry of superannuation with ASFA, and they came up with what's a comfortable retirement and what's an affordable retirement, and they set certain thresholds, and those dollar signs were obviously indexed.

But luckily, I had a super account which met the major goal, and my wife's account also met the major goal. So I was able to convince my wife that, hey, we are more than comfortable in our retirement. So if we have to retire today or we have to retire tomorrow, we're in that financial bracket where it's going to be quite good for us to retire. No idea on life expectancy. She never even contemplated life expectancy.

And I said, look at the moment, we're expected to live into our 80s now. Have we got enough money? As long as we get X per cent earnings on our money, we're going to be more than fine. We started taking European holidays.

It was great to have an account, you got a retirement account that you take a European holiday. It made retirement very easy and comfortable to do.

Shane: And just that point, then, with the holidays and so on, were you drawing that money out of your retirement income product, or was that...

Eric: Correct. We were taking it out of our retirement income product. So basically we said, we're going to put all our money into a retirement product. We knew the rules. There was X per cent we had to take out every year.

We could take a lump sum out if we had to. And I said, let's leave it in there. It's in a good tax environment in our pension account. She said, you just deal with the finance, I'll organise the holidays and away we went to Europe.

Shane: And I've said this before in previous podcasts, but I think it's a really important point to make is that some people don't realise that putting your money in that sort of environment means you can still access it for whether it be holidays, for emergency needs or so on.

So I do like to reiterate that point, because it's really important that people have worked their whole life and saved in super and then sometimes get concerned that they're locking their money away and it's really important that they know that's not the case.

And you've just given us a good example of that. So your wife retired a bit before you is that right?

Eric: She retired probably ten years before me. She also got made redundant, so she was very clever. She organized her redundancy at about the age of 53 or 54.

We haven't got children, so we haven't got that burden of making sure there's an inheritance for the kids. So she was quite happy to retire a lot earlier because then she saw again what she had in her super account. She knew she could access it. I was still working, so we were quite okay in that regard.

Shane: And I'm assuming that was after you went through this moment of teaching her about the benefits of superannuation.

Eric: Well, no, she had to learn fast and hard. So because she wasn't putting money away into her super account, I was getting her to sacrifice over 35% of her wage, which she said, You've got to be absolutely kidding me.

Putting away 35% of my salary. She struggled because she liked buying new shoes and new clothes, et cetera, but once she got into a budget and losing 35% of her income, and then seeing what's happened over the next 15 odd years, she said, thank God she did it.

Shane: And so she retired ten years before you. You've talked about all the great things you've been doing in retirement. How did she transition to retirement and with you working as well at the same time?

Eric: She did it easy, if you ask me what does my wife do Monday to Friday? I don't know, but she's never home. She's got a good network of friends, she's a shopaholic, but she does work to a budget at the same time, so it's not as though she's just spending her money nilly-willy, but, no, she was good because I saw what she was doing and she was happy.

So when I had this bit of a downturn with my first redundancy, I could just look at her and say, well, okay, she's surviving, so if she can survive, I can definitely survive.

Shane: So you've touched on a number of times around the second redundancy, was it at 60?

Eric: At 60.

Shane: And so that was when you said, okay, I'm ready to go. The other element of that around yeah, retired at 60, so still a young man and the activities that you have just spoken about that you're doing in retirement.

So the handyman work on the farm, the golf caddying, there's an element beyond the fact that you just told me about your knee injury, there's an element of personal fitness to that. So did that leave you thinking, I'm really going to be able to do some of the things I enjoy without worrying about the sort of health issue for a while?

Eric: Correct. The thing about all those three elements of working on a farm and doing some golf caddying, that just filled in those other couple of days of the week where I didn't have to think about what am I going to do tomorrow morning?

You can only play a certain amount of golf. You can't play seven days a week, although some people think you can, but maybe two or three days a week of golf is fantastic. Something in between, which just fills in the gaps, made it even more enjoyable.

So it just made you appreciate what you've got. Where if you haven't got that financial burden of saying, where's my next income coming from, you can do anything. And I even do a lot of volunteer work as well now, so I volunteer at the golf club, so I give them a day a week as well.

So, yeah, it's a fulfilling role just to be able to do something and there's a purpose in life, rather than just sitting in the couch saying, as I'm doing now, watching Netflix, and for the next couple of weeks with my knee injury, I'd hate to be just doing that every day, just not knowing what I'm going to do tomorrow morning.

Shane: That word, purpose, that you just mentioned is so important, particularly coming from a long career where you had a purpose. And so yeah, that really resonates.

Eric: And look and it was good because, look, I was still getting phone calls from ex-staff members saying, especially over COVID, how do we deal with this situation and this, that.

So I was still mentoring people even though I wasn't working at the time. But I felt committed that if they're going to give me some calls to say, could you give me some advice, if you've got the expertise, just share your knowledge.

Shane: Because you talked earlier about when you were first made redundant about that impact on your confidence. How did that feel, getting people ringing you and saying, hey, Eric, give me some advice?

Eric: It was very pleasing.

Shane: Yeah. So obviously you've had an impact on them in your working life.

Eric: Yeah, well, I pride myself on being a people person, if there's such a thing because you got to build trust, and if you can't build trust with your own staff, how are you going to build it with an employer or a member? And that's the way my attitude was as a manager.

Shane: Spot on. So the last topic that I wanted to sort of cover is you've talked about the transition to retirement and the enjoyment you and your wife are getting from retirement and the holidays and all the things your wife does.

You're not quite sure what she's doing, but what about the next stage? How are you planning or thinking about as you're getting older and whether it be the financial burden and health? Is that something that plays in your mind and are you putting plans in place around that?

Eric: Yeah. No. They do come in stages. So now that I've got an injury, my wife's had an injury, we're sort of saying and we're about to turn 65, we're sort of saying, okay, what is next? You start, you start looking at things like reviewing your will, you start looking at things like your final plot, your resting spot.

You start talking about your final destination in a holiday. And I said, we're only 65, we're not 85. But we thinking about that next phase of getting things set up. So my wife's already gone in there and she's got a plot. We don't bring it up as conversation.

Shane: That's one thing she's doing during the day.

Eric: That's one thing, and it's right next to that. I can actually see the golf course from that plot. So she put that in mind. But no, you do go through the next stages that as we said, we're about to turn 65. We're looking at what is next in line for us. Our bodies are starting to pack up a little bit, so we got the right insurances in place, et cetera.

So you do think about those things as the next step, but at the same token, we still want to take our next vacation overseas.

Shane: Yeah. So you got the realization of what's ahead and you've got plans in place, but importantly, you're living life to the fullest by the sounds of it.

Eric: I think we've got what I think is a great retirement, because again, the biggest thing in retirement, and I've got friends that aren't as financially well off in superannuation as what we both are. If you haven't got a financial burden you can basically think of and do anything. We've just updated our cars, we've just updated our house because we can afford to and it's all through superannuation.

If we didn't have the super backing, we could and be able to do what we've just done in the last twelve months, buying a new house, buying two new cars, and now thinking about going on an overseas holiday. So it's all been fantastic for us.

Shane: You're making retirement sound very attractive, Eric.

Eric: It is an attractive option.

Shane: Just last question, is you mentioned earlier, and I've said this a few times about the comfort that you got from talking to other people around what retirement looks like.

What one or two tips would you give to anyone listening today from your own experience for things for them to think about?

Eric: Yeah, look, talk to as many people as you possibly you can, and they don't have to be in your field of work. It's just good to get other people's opinions about retirement and potential retirement and do I transition into retirement?

I have a lot of friends that can't retire because they wouldn't know what to do with themselves. So they need to work. They don't need the finance, but they just need that interaction with people and to be involved, to do something.

I, on the other hand, have a different outlook in life where I want to do other things, improve my golf as much as I can. And you can't do that if you're employed somewhere, because you've got to dedicate your life to whatever you're doing for employment. But if you're a potential retiree, definitely look at your finances to say, can I afford to retire?

If you can tick that box, then just look at your health-wise, and then after that, just say, okay, start talking to people, saying, how did you feel about retirement? Because there is an impact when you retire. It stops. You're not doing what you do, you're not driving that truck or you're not talking to that member. Things stop, and it is completely different. So you got to be ready for it.

Shane: Yeah, it's great information. I think another key theme out of what you said there and I picked up is retirement is personal.

Eric: It is very personal and it's not for everybody. You look at television, you look at people that have got all this money and wealth, but they're still going. They obviously love it, which is fantastic, but it's not built for everyone.

Some of us want to sort of sit up and put our feet up and do something a little bit different. And it is exciting doing something completely different. From working, as I said, I've been working in an office for 35 years and here I am now, mowing lawns and spraying weeds on a farm. It's just completely different.

Shane: And you look happy for it.

Eric: Thank you.

Shane: Eric, thank you so much for joining us today. I really enjoyed our chat and all the best for the trips to Europe, but also what's ahead. So thank you.

Eric: Thank you very much. Thanks for your time.

Shane: Thank you for joining us today. If you're an AustralianSuper member and you would like to join us to share your story or have a question or topic you would like us to cover, then click the link in our show notes to get in touch.

If you've enjoyed this podcast, subscribe and share with your friends and family. See you next time.

Shane: Hello. My name is Shane Hancock, and I am the Head of Member Products, Guidance and Advice at AustralianSuper. And welcome to our podcast, The moments that count. Before we start, it's important to note that the information discussed in this podcast is general only and doesn't take into account your needs or personal objectives. You should assess your own financial situations and needs. 

Today, this podcast is being recorded at our head office on the land of the Wurundjeri people of the Kulin Nation. I and AustralianSuper acknowledges the traditional custodians of country throughout Australia. We pay our respects to elders past and present, and extend that respect to all Aboriginal and Torres Strait Islander peoples.

AustralianSuper has the privilege of 3 million members, trusting us with their retirement savings. Quite often, AustralianSuper members will ask questions that are found through various channels. 

And mostly, those questions are relevant for many members. So we thought it would be great if we could share some of those questions and answers through this podcast. To help answer these questions, I'll be inviting a guest expert to join me on the podcast and today I'm very happy to be joined by Daihla McGinty, Regional Manager in our Member Education Team. Daihla, welcome!

Daihla: Thank you so much, excited to be here.

Shane: Great. So, today we want to cover off a really important area of contributions. Someone asked a couple of questions around superannuation contributions 'cause you are one of our resident experts. So what are the different types of contributions that a member can make to their superannuation?

Daihla: Really good question because there are lots of different ways you can make additional contributions to your super. And I think this confuses quite a lot of our members because they hear lots of different terms. But today, I think if we focus on maybe three ways to make contributions, including salary sacrifice, taking advantage of maybe making contributions to your spouse and also the government co-contribution.

So they are the sort of three that I focus on quite a lot when talking to members because they're quite easy ways to boost your super.

Shane: Okay, excellent. Let's go through those three. So, salary sacrifice, tell me what that is?

Daihla: Okay, so salary sacrifice, probably a lot of our members have heard about that. And how it actually works is, you go into an arrangement with your employer and you make a decision to sacrifice some of your pay, so rather than paying your marginal rate of tax, which if we think about the average Australian, that's earning $90,000 a year, their marginal rate of tax is 32.5%.

So if they sacrifice some of their money into their super, rather than paying that marginal rate, they only pay 15% contributions tax. So immediately that's a big saving and it's a good way, it's a bit of a set-and-forget. You set that up with your employer and it just ticks along.

Shane: Is there a maximum amount of money someone can contribute via salary sacrifice?

Daihla: There is. And this is where some of our members get caught out, because they hear this term of contribution limits and the current limit for before tax or they're also called concessional contributions is $27,500 per annum.

And with that limit, with salary sacrifice, you're also including employer contributions in that amount. So it's just really important for people to understand that that $27,500 a year, that concessional or before tax limit also includes what your employer is paying in. It's important to be aware of that.

Shane: So that combination of employer contributions and salary sacrifice is basically treated the same way from maximum contributions as well as the way it's taxed.

Daihla: 100%, yeah.

Shane: Excellent. And so the second lot of contributions you talked about earlier was spouse contributions.

Daihla: So spouse contributions are, I would say really underutilized and that's probably because people are not aware of the benefit, the taxation benefits attached to it. And where this could work really well is if you're a member of a couple and you have maybe one member of the couple that is earning a higher income, maybe the average, which is you know, the $90,000 a year.

And then you might have the other member of the couple which might be taking some time out of the workforce to you know maybe have some kids, have a bit of a study break, and maybe that member of the couple is earning less and if they're earning under $37,000 a year, the higher income earner spouse can make a $3,000 contribution to their account, they can make a lesser contribution, but $3,000 sounds a bit more generous and that spouse that's earning the higher income can actually then claim the tax offset of $540.

So that's straight off their tax bill, it's not a deduction, it's a really good benefit that can help top up that lower income earner's super. And as we know that women generally have a lot less money in their super and this is just a good way to boost it whilst they may be taking some time out of the workforce. But you don't have to just be a woman to do that.

Shane: Excellent. So, something else that we get asked about which has seen more fame, and I'll come back to government co-contributions, but on that fame of spouse contributions is contribution splitting which has a similar sort of benefit of increasing the balance of someone who might have various reasons why they're not earning superannuation. Can you touch on that a little bit?

Daihla: Sure can. And again I think super splitting is a strategy that a lot of people don't know about. And where this can work quite favourably is if you are looking to balance out super accounts between a couple or maybe one of the members of the couple have access to their super sooner and there is an opportunity for you to split up to 85% of your before-tax contributions with your spouse.

So, these are strategies that can really, especially in couple relationships, really can help balance out those super accounts and also may enable them to access their money sooner in retirement.

Shane: So, that 85%, can you just clarify about how that works? It doesn't come from their employer to their spouse, it goes into their super account, correct?

Daihla: Yeah, exactly. So let's say for example I'm going to be really generous and give my husband some of my super. What I could do is my total concessional contributions for the financial year, I can look to split 85% of those and move them into his super account and there's a form you can fill in to do that.

Shane: And that form is a standard form from your fund or the tax office?

Daihla: Exactly.

Shane: Okay, excellent. All right, going back to the third contribution type we've touched on at the beginning which was government co-contributions, tell us about that.

Daihla: Yes, and I love government co-contributions and how this works is it really focuses on the lower income earners. So if you maybe are taking a break out of work or maybe you're just working part time or like my son who's an apprentice, who complains all the time about earning very little income, and he doesn't pay rent, but he's complaining about the lack of income he's got.

So he's earning under $42,000 a year and he's popped $20 a week into his super. Now, he's gonna end up putting about a $1,000 into his super account on an after-tax basis. And because his income is on the lower side, it means that the government will give him a co-contribution of $500. So the benefit of that means that he's getting, for a $1,000 he's popping in, he's getting $500 as a top up.

Shane: Right, so the type of person that may take advantage of the co-contributions you've talked about, are low-income earners, or are there other people that might take advantage of this?

Daihla: Maybe you've returned to work or you're maybe doing some study or maybe you're easing back from working so many hours. You've sort of gone down to one day a week because you're getting closer to retirement. So it's really making sure that with any type of contribution, that you really have a look at what contributions are going to suit you best based on how much income you're earning.

Shane: Now, we're very well-known in the superannuation industry of using lots of jargon and you've done well to take some of those words out, but concessional and non-concessional contributions can be better described as before or after tax and you've talked a little bit about that. Can you just explain for our listeners the difference between a before and after-tax contribution?

Daihla: Yeah, this is another example of the multiple terms that you hear. But to put it really simply, the difference between concessional contributions and non-concessional contributions really come down to how those contributions are taxed. So for example, with concessional contributions, they are concessionally taxed.

Shane: So concessional being?

Daihla: Before tax. Yes, so they're concessionally taxed as they go into super so unlike paying your normal personal income tax rate, you're only taxed at 15% as opposed to non-concessional contributions or after tax, there is no contributions tax upon entry. And the reason for that is any money that you're putting in on a non-concessional or after-tax basis, is in your bank account and you would've paid tax at some point when receiving that money.

Shane: So last question, we've talked a little bit about or mostly about people making contributions from their own cashflow really, whether it'd be post-tax or pre-tax. Are there, in your experience as a previous financial planner and now in the education space, are there other trigger events in a person's life where they may make contributions to superannuation when there's ongoing or lump sums?

Daihla: Yeah, definitely. I do feel that most people consider making regular contributions because it's a bit easier to set up and sometimes that can happen when maybe your children have moved out of home and you've saved yourself $200 a week from your food bill which having two sons in their 20s, that's exactly me.

But also if you are in a position where maybe you sell an asset, you might sell an investment property and you might like to make a lump sum contribution or maybe you received some estate proceeds and that's also another way you could consider, "Do I want to add this to my super in a lump sum..."

Shane: Are there limits on those lump sums that someone could make?

Daihla: There are limits, but they are a lot more generous than that before-tax or concessional limit. So the limit on non-concessional or after-tax is a $110,000 per annum, but you do have the ability to utilize something called a bring-forward rule where you can use three years’ worth of contributions at once.

Shane: All right, in that situation you touched on, whether it was downsizing or inheritance or redundancy or something, you could actually make quite a significant contribution to super.

Daihla: Absolutely. And with downsizing, there is actually another incentive that doesn't count to any of the limits that we've spoken about, but the government have actually introduced the opportunity, if you do wish to downsize your family home and you've been in that home for at least 10 years, you can look to put in $300,000.

And that doesn't count towards any of those other limits we've just spoken about. So another way that you could top up your super.

Shane: Fantastic. Well, Daihla, I think you've taken some really complex parts of the superannuation contribution regime and simplified them really well for our listeners. Thank you so much for joining me. As I mentioned at the beginning, the information that you've just received is general advice only and doesn't take into account or consider your needs or personal circumstances.

If you would like more guidance or advice, contact AustralianSuper or your financial planner. Thanks again, Daihla.

Daihla: Pleasure.

Shane: Thank you for joining us today. If you're an AustralianSuper member and you would like to join us to share your story or have a question or topic you'd like us to cover, then click the link in our show notes to get in touch. If you've enjoyed this podcast, subscribe and share with your friends and family. See you next time.

Shane: Hello. My name is Shane Hancock, and I am the Head of Member Products, Guidance and Advice at AustralianSuper. And welcome to our podcast, The moments that count. Before we start, it's important to note that the information discussed in this podcast is general only and doesn't take into account your needs or personal objectives.

You should assess your own financial situations and needs. Today, this podcast is being recorded at our head office on the land of the Wurundjeri people of the Kulin Nation. I and AustralianSuper acknowledges the traditional custodians of country throughout Australia.

We pay our respects to elders past and present, and extend that respect to all Aboriginal and Torres Strait Islander peoples. 

AustralianSuper has the privilege of 3 million members, trusting us with their retirement savings. Each of those members has their own story, and today we're going to hear one of those stories. 

I have the pleasure of being joined by Elaine P, a member of AustralianSuper. Welcome, Elaine, and thank you for joining us.

Elaine: Thank you, Shane, for having me.

Shane: No problem. Well, tell us a bit about yourself, Elaine.

Elaine: Well, my name is Elaine. I'm 76 years of age. I have two children, four grandchildren, and unfortunately, my husband passed away 20 years ago. But we did have 30 years together. I retired when I turned 75, so I've been retired now for 18 months.

Shane: Wow, you've had a long working life, and we'll get into that in a little, in a while. So four grandchildren, how old are your grandchildren?

Elaine: Oh, gosh, ten, eight, seven, and four. One daughter lives in the country, the other lives locally, so I see them at varied times. But, yeah, it's really lovely to have them.

Shane: Boys and girls, a mix?

Elaine: One boy.

Shane: One boy.

Elaine: He's slightly the favorite.

Shane: Slightly? I've got three boys, so I can't potentially have a favorite because they may be listening today. So they keep you on your toes. You see them, as you said, a little bit, and get out and about with the children?

Elaine: Yes, I do, yes, especially since I've retired.

Shane: Excellent. So, Elaine, we've had a little bit of a chat prior to this about your life, and you've been through some ups and downs, like a lot of people, but in your case, there's been quite some significant periods of your life. I just wonder if you could share us a little bit about that part of your life?

Elaine: Hope I don't get too emotional. I still do, even after all these years. But what actually happened, my husband and I, we owned a home. Beautiful home with a swimming pool. Everything was going very comfortably.

He decided he didn't enjoy his role, so he decided to go into business with two partners. Now, unfortunately, one of them was an embezzler, so our home was linked to the loan. So we ended up losing the home, the car, our business, life savings.

We had accountants' bills, we had solicitors' bills. It was horrendous. And I was a stay-at-home mum at the time with two young girls. So, yeah, we really had to put our heads down. We had to try and sell the home. We were paying 18% interest at the time and it was horrendous.

So anyway, we decided we'd go to the other side of town. We rented, my husband started a small business with pretty ordinary old equipment. I went back to work. I had three part time jobs and to my dying day, I will never forget any of them. One of them was polishing stainless steel kitchen benches in an aged care home and washing and drying dishes.

The other one was filing, which was servants quarters. And I had to file with my coat and gloves on, it was so bitterly cold. And then the third one was working for a psychiatrist, typing up his notes.

And it was so depressing. Terrible stories that you would be reading, but it did make me realize that my problems were material, not mental, so I was very grateful for that. Then my husband, he managed to get the business up and running, and a friend offered to pay for an advertisement in the financial review.

We had one person apply and I have to tell you, a he was a very wealthy Australian. And he bought the business. So, hallelujah, we were able to get some money in and we bought a block of land, I have to tell you, two doors from the beach when I think about it now, how crazy we were to sell, but with a double entry, anyway, we built a home.

It was never finished. Like, we had op shop curtains and things like that, but it was still fabulous to have our home again. I really needed that security. Then, unfortunately, Max was diagnosed with terminal cancer, so that was a terrible blow.

We knew that he would probably get five to six years, and it was during that time he thought, well, I've got to get you set up financially. So we sold and then we bought a block of land and we divided it in two and we built two townhouses, selling one off very early and cheaply to fund the other. So that's my story. Not great.

Shane: It's probably difficult for me to come up with a significant follow up question for what you've spent five minutes talking about, quite significant things that happened in your life that wouldn't happen to most people.

So taking a step back, you were saying you were a stay-at-home mum at the time. How old were the girls when this happened?

Elaine: They were five and four. And back in those days, part time work was really difficult. They would only pay you for part time work, but they expected, like, a full day's work. And I can't tell you the number of times I was driving down Beach Road at the rate of knots to get to my children, or I had a job in the city, in Collins Street and running to the train to try and get to school in time for the kids.

So, wasn't happy times, that's for sure. I missed out on so much with the children. I was very lucky my mother helped and my husband was just wonderful. I mean, he did all the cooking and washing and hearing the children's homework, and it was really good.

But now I see my grandchildren, I'm realizing how much I've really missed in their lives. And they do tell me that that I used to keep saying, "Oh, we've got no money, we've got no money and I've got no time." And that saddens me, I have to say.

Shane: Yeah. Obviously at that time, before the loss of the business, you had a plan in place which you thought was you being a stay-at-home mom and your husband's business, and very quickly that was taken away from you.

And you clearly were a very strong family, based on what I can see. What were the sort of things outside that strength that you think allowed you to push through to get yourself to where you are today?

Elaine: I had a very strong husband. He was just a wonderful husband and a wonderful father. My girls were fabulous and friends were really good. They would come out of the woodwork to come and help help you.

But you have to go on. You don't have a choice. And look, it's amazing. And my last job before I retired, it's the best job I had in all those years. So if you keep persevering in life, you really do well.

And my story then goes on, that after my husband passed away, I decided, I kept the house for a couple of years, and I realized how lonely I was in the suburbs and, you know, wandering around in a four bedroom home.

So I approached a real estate agent who'd been wonderful to us, and he said, I'm going to sell it for you. I'm going to sell it at half commission. And he sold it. And this was 2007, just before the election, before the global financial crisis.

And I got a million dollars for my townhouse. Now I was just blown away because I actually owned it. I'd scrimped and scraped and paid off the last of the mortgage. So I'm rich for the first time in my life.

So I actually did something that was very sensible. I put all of that money into a term deposit, never knowing that the global financial crisis was around the corner. And I rented, I rented next to the MCG because I thought I'll be able to just wander in there and see my beloved saints.

But I think they played them once that year, so that was really good. I got a taste of living in the city and living in an apartment. Next part of my story is not great either. I decided I was walking to see an apartment and there was an auction on.

I'd never even seen the apartment, and I bought it. I cannot believe that I ever did anything so stupid. And I could have been in the place maybe ten minutes and realized I'd made a mistake because it was going to be three high rises going up around me, so it would have just been ghastly.

So I stayed there for five years. It was a happy time. But I sold. I had to bite the bullet and say, "I'm going to lose money, get out of here." That's what I did. The other bad thing I did was I was sitting next to someone at a wedding and he was a retail superannuation fund manager.

So he gave me a lot of jargon and convinced me to put that money that I had sitting in term deposits into his superannuation fund. So that I did. And then they would invite me down there periodically and give me a spiel.

And then one day I started reading the statements and about page eight and then a size five font, I realized I was paying $8,800 in fees. That was one year.

Shane: How old were you at this time?

Elaine: I'm in my 60s. So then a friend was with another retail fund, so I went to visit them, I sat in their plush boardroom and they did another financial plan, many thousands of dollars. And long story short, I was going to be worse off.

So then I read this fabulous article by your former CEO, Ian Silk, and I just thought, what a man of integrity. He's been beset with tragedy, but he just came across as someone who was really working for the members.

And the salary he was pulling then was really minuscule compared with what other CEOs around town were pulling in. And I thought, this guy's for me, so I'm going to join AustralianSuper. And it took me a few more months.

I always take my time home. And I came in to your old headquarters. No sort of plush boardroom, little cubicle, and I saw this lovely lady called Natashya. And she just was fabulous. She just took over.

She dealt with these people that I was terrified of. She got all my money over for me. We started a superannuation fund, and then we started the choice pension. And that day I wrote down on a sort of tacky piece of paper how much money I put in.

And then when I got the choice pension, I put how much money I put in again. And then I had a little column to the right. So that would be for if there were any major things happened around the world or if I got to put money in, this would explain if there's trouble on Wall Street, why my super was dropping, because I was quite paranoid at that stage.

Shane: Understandably.

Elaine: When you've had hardship in your life, you know how much is in your wallet, how much is in your bank account, and how much is in your super. And I remember going to one of your retirement seminars, and the guy asked, is there anybody here checks their super every day?

And I reluctantly put my hand up, and I was really pleased to see others did the same thing, so I didn't feel too bad about it.

Shane: Well, I think based on your experience with money and people that you thought you could trust and it didn't quite work that way, or the way you would like, that makes a lot of sense. There's a lot of things, a lot of changes there for you.

So when your husband passed away, you said you made some decisions around housing and you had a fortunate outcome in the sale of a house. And then there were some incidents where you probably made decisions you probably would take back.

And you then talked about when you saw an article from Ian. But prior to that, it seems as though you were being influenced by people you met, did you have a longer term plan or were you just thinking that, you know, it sounds like you were very trusting of people initially and was there a longer term view or was it like, "Okay, I need to just make the most of what I've got here."

Elaine: Gosh, that's a hard question. Yes, look, I was thinking to the future, but I could never see past paying off mortgages and that sort of thing. I couldn't look any further. I just knew that I was going to have to work a lot longer than most people did.

Look, I was fortunate, my mother passed away and I did get an inheritance, which was great because I was able to put that into my super fund. Plus I had very stable employment as well. And I loved it.

When you live on your own and I have done, as I said, for 20 years, it's really great to get up in the morning and go and work with your colleagues and so that sort of influenced me to stay on a bit longer.

And then I saw my fund monies growing and growing and I thought, look, I don't have to rely on a pension here. I'm going to be self-funded if I keep going this way. But I have to tell you, I am booked to go overseas in July and this will be about my 9th major holiday, so I haven't exactly gone without.

Shane: Well, don't feel guilty about not going without because you've definitely earned it over the years. It's actually pleasing to hear that you're enjoying your time.

Elaine: I am. And I've also just thought of another incident then, about five or six weeks ago, I was minding my own business, driving down the street and a car came out from the curb and T-boned me. He didn't see me. Now my car was 12 years old. I knew it should have been replaced and I looked at the minuscule damage to his car and my car is un-drivable.

It's still not repaired after all this time. But, you know, having some money in the bank, having that superannuation, honestly, within 12 hours, I had the money in my bank. I'm now the proud owner of a brand new car. I've got a higher car and I've also got an old car, so I've gone from one to three cars.

Shane: So I think beyond the accent, which is terrible, and I hope you put a nicer kilter sticker on your new car. But the point there that you're making for listeners that didn't pick up is that with the income product that you have with AustralianSuper and there's a range of products in the market, but you can access your money at any time.

So that was that ability for you to receive an income, but also access the money. So that gave you that surety that you're looking for--

Elaine: Which I didn't have in the past. I've never had that before. But to think, look, I'm not going to say I didn't have some anxious moments after the accident. I've laid many nights thinking, what do I do? Do I buy a new car? Do I get this one repaired? But to think I've got the money there and, like, even going overseas, I have always sat at the back of the plane.

Now I've lashed out and I'm in the middle of the plane. Good old premium economy. But that's the first time I've ever done that, because I think since I've retired, I feel confident my money hasn't gone down a lot. And I just think, if you don't have super, I don't know, if I didn't have it, I wouldn't know where I would be.

Shane: And confident is a really important word. So confident and confident outcomes of the way you're feeling, and that's based on what you may have or what lifestyle you want to leave.

So that's really important word that we hang on as well. Can I just take you back to something you said earlier about living on your own and how much you loved your job and the people that you work with. Can you tell me about a bit about that job?

Elaine: It was with a brewing company. They were just delightful people and they always were so inclusive. And having come from some pretty horrible jobs, I have to tell you, with some pretty nasty people, it was just a delight to work with them.

And it was so comforting to go in every day because even now, like, the first person I speak to every day is the barista because I go out for coffee every morning, so it can be quite a lonely life. 

Shane: Was that the place you were working at until when you retired recently?

Elaine: Yes, I retired just before my 75th birthday. I saw one of your lovely financial planners and didn't give her much time. We got it done just before my 75th, so that was wonderful. 

Shane: I'll come back to that process around advice. But your decision to work till 75, I can understand that obviously you've had some financial challenges in your life and some personal loss. So the decision to work till then, was that a combination of both financial and the enjoyment that you got from working with these people?

Elaine: Oh, absolutely, because my salary sacrificed virtually my whole wage, which was I was seeing my super fund balloon, which was really, really good. And yes, the company of my colleagues was fabulous and it was helping pay for my overseas holidays. 

Shane: Excellent. That's the goal. Getting back to super. So I'll come back to the financial planning process. But you've talked a lot about the benefits of superannuation and you seem very okay with super and how it works.

When did you start to really understand superannuation and the role that it will play for you irrelevant of whether you've had good or bad experiences with the providers?

Elaine: Well, I read every financial article there is. I'm very keen on checking the stock market each day and of course, that goes hand in hand with your super, but yes, I've realized that I didn't have the ability to do it myself. I don't understand buying shares.

I certainly didn't have any luck buying property or one, we did, but not all. So, yes, superannuation, I needed to rely on it. And as I said, I used to go to the AGMs, I would go to your retirement seminars.

They were fabulous. Even if you only got one article out of that, it was just excellent. And then what I'd do is I would hound your marketing department until they found the slide I wanted, then I'd laminate it and I'd pop it on the fridge.

And when I started to have doubts about my financial future, I'd look at how well AustralianSuper have been going the last ten years. So I was a real advocate. 

Shane: So you talked about coming in, seeing Natashya, who is still with AustralianSuper, which is pleasing.

Elaine: She's fabulous, she was really excellent. 

Shane: So, tell us a bit about not necessarily Natashya herself, but when you went to see a financial planner, and in this case was Natashya, what were you looking for when you made that decision?

Elaine: I was just looking for someone to really help me. I was so uncomfortable with the people that I'd seen in the past because they'd sort of come on so strong and they talked with this jargon and I had no idea what they were talking about.

And she made it very simple and she just took over. She said, "Elaine, it will all happen, I'm telling you." And it did. Within three months, all my money was transferred over. So I just felt very grateful. But I had gone through that process of two other financial plans with the retail funds.

Shane: And you were still working in that period of time?

Elaine: I was, full time.

Shane: And then you, I believe you saw another one of our planners, Chelsea, at a later period of time.

Elaine: Oh, yes, I gave her hell. 

Shane: I think it was in COVID, you said.

Elaine: Yes, well, I wanted to see her in person. I was not going to do any of these Zoom meetings and every time we'd make an appointment, it would have to be canceled because we'd all go into lockdown.

So she said, Elaine, if you don't hurry up, you're going to be 75. So she was just fabulous. So it made me feel very comfortable, again, everything was just sent through. All I had to do was sign and send it back again.

The process was so easy because not everybody of my age is able to do things. I mean, my husband always made me do the accounts and things like that, so I was fairly up to speed and having worked most of my life as well. But they just were wonderful and both ladies, I can't thank them enough. 

Shane: And so you've talked about the enjoyment you got from work and the financial security you finally feel like you've achieved after some really difficult times. How did it feel that first day you woke up after retiring? 

Elaine: I think I'm still adjusting to retirement. I'm not someone that has just launched into it. I've tried some volunteering and that's not quite my scene. I'm going to a retirement seminar, sorry, a volunteering seminar very soon. 

So I will check that out and see if I can find something that I really enjoy. But I've realized you've got to make the running. You can't just sit back and wait for people to ring you when you live on your own again. And I don't want to be always in my daughters’ doorsteps, so to speak. They're busy and they're working. So, yes, you've got to find the running. But it's just so wonderful not to have the alarm clock going off, I have to tell you.  

Shane: So 18 months is a small period of time opposed to the life that you've had. So you're just saying travel is going to be a big part of your retirement, has been a big part of your retirement and so it seems to me that you're going to take everything that's ahead of you.  

Elaine: Yeah, it's a good life. 

Shane: It is. Elaine, I think we've covered a lot of ground in this period of time and I feel really fortunate to be able to meet you. And I'm really appreciative for you sharing your story with is clearly an emotional one, but also one that you fought your way through and achieving, hopefully, the retirement that you deserve. So thank you for joining us today.

Elaine: Thank you for having me. 

Shane: Thank you for joining us today. If you're an AustralianSuper member and you would like to join us to share your story or have a question or topic you would like us to cover, then click the link in our show notes to get in touch.

If you've enjoyed this podcast, subscribe and share with your friends and family. My name is Shane Hancock and I look forward to the next episode where we will hear from another AustralianSuper member. See you next time. 

Shane: Hello. My name is Shane Hancock, and I am the Head of Member Products, Guidance and Advice at AustralianSuper. And welcome to our podcast, The moments that count. Before we start, it's important to note that the information discussed in this podcast is general only and doesn't take into account your needs or personal objectives.

You should assess your own financial situations and needs. Today, this podcast is being recorded at our head office on the land of the Wurundjeri people of the Kulin Nation. I and AustralianSuper acknowledges the traditional custodians of country throughout Australia.

We pay our respects to elders past and present, and extend that respect to all Aboriginal and Torres Strait Islander peoples.

AustralianSuper has the privilege of 3 million members trusting us with their retirement savings. Quite often, AustralianSuper members will ask questions that are found through various channels.

And mostly, those questions are relevant for many members. So we thought it would be great if we could share some of those questions and answers through this podcast.

To help with answering those questions, I'll invite a guest expert to join me on the podcast. And today, I'm very happy to have one of our financial advisors, Helen Harrison join me. Helen has been a financial advisor for 12 years.

Helen provides advice under the license of Industry Fund Services. Helen, thank you for joining us.

Helen: Thanks for having me, Shane.

Shane: Helen, a common question, but not an easy question we get asked is how much Super does someone need to retire?

Helen: That is a really good question, Shane. And often I'll try and reframe that by, "Well, how much money do I need to live on in retirement?" Superannuation does often form part of your retirement income, but there are other places that money comes from and statistically around 70% of retirees get some form of government assistance, by means of an age pension.

When we're looking at retirement income, we need to look at what do you have in personal savings, do you have shares, do you have an investment property? What's the balance of your super and are you eligible for government benefit? Because what we want to do is try and gain some income from all these different sources.

We also need to understand what it is that you're wanting to do in retirement. So, are you planning on taking up some new hobbies, traveling overseas or around Australia and are you looking to pay off a loan, do renovations? All of these things need to be taken into account.

But the other unknown is how long the money needs to last. Most people can now expect to live well into their 80s. So, if you're to retire at age 65, you will need to generate income for at least the next 20 years.

Shane: So, what I'm hearing, Helen, is there actually is no golden number, there are so many individual, personal circumstances and needs to be factored in.

Helen: Absolutely. So, as a starting point for people who really have no idea what sort of retirement income do they need, we'll refer you to the Association of Super Funds in Australia or ASFA, who conduct a survey every year to establish what retirees who own their own home will need to spend to enjoy either a comfortable or a moderate retirement.

So in September 2022, they estimated that for a couple to have a comfortable retirement lifestyle, they'd need around $68,000 a year compared to a moderate lifestyle income of around $44,000 a year.

And for a single person, a comfortable retirement is around $48,000 a year, compared to a modest retirement of $35,000 a year. ASFA described a comfortable retirement as being involved in a range of leisure activities, having a good standard of living, including private health insurance, a reasonable car, being able to eat out and take holidays.

Whereas the modest lifestyle really just covers the basics which is mostly covered by the full-age pension currently sitting at around $40,000 a year for a couple and $26,000 for a single.

The ASFA figures shown are always a good place to start if you are unsure, but the best thing to do is for people to track their own expenses, leading up to retirement, to work out the standard of living that you need or that they need to live the lifestyle that they want.

So I see members who tell me that they can comfortably live on the full-age pension of around $40,000 a year, and those that need over a $100,000 a year. But what I always say to people is what's important is that you're able to fund the lifestyle that's right for you.

Shane: Thanks, Helen, so those ASFA numbers give us a bit of a guide, but ultimately, the answer is it's different for every individual or every family and people should look to seek their own guidance and help whether from their superannuation fund or a financial advisor to work out how much is right for them.

Helen: Yeah, absolutely.

Shane: So, another question we get asked a lot is, "When should I start thinking about planning for retirement?"

Helen: Shane, I tell people that it's never too early or too late to start planning for retirement. The earlier you start, the more time you've got to build your savings, reduce your debt and make educated and informed decisions around your finances and your financial future.

Starting early allows you to take advantage of the power of compound interest and benefit from a longer investment time horizon. Most members that I see when they're mid 50s and upwards, who perhaps have paid off their debt, are empty-nesters and now have some surplus cash flow and are looking to see what strategies are available to them to help boost their super for retirement.

Shane: Thanks, Helen. So you talked about it's never too early to start thinking about retirement, but you also said that most people that are seeking advice from you are 50 plus, empty-nesters, and so on, if you're looking to start thinking about planning for retirement earlier than that, beyond financial advice, what are some other ways in which people can build their knowledge around what they could be doing and should be doing?

Helen: I guess it's really important to try and establish some kind of understanding of where you're spending your money, a budget tracker or establishing a budget is really important, even in the early years. It's always a good idea to live within your means and try to establish a savings plan to get you into the housing market.

I guess in terms of the superannuation, if you're wanting to engage more around your super, you would probably have a look on your superannuation fund's website. I know that AustralianSuper also do a lot of education seminars in workplaces, so if these things come up, it's always a good idea to go along and listen.

And if you don't have more money to put into super with a longer time horizon, it's also important to understand where your super is invested. So again having a chat with your super fund around the investment options available to you would be a good place to start.

Shane: Thanks, Helen. As mentioned at the beginning of this podcast, the information provided today is general advice only and doesn't take into consideration your needs and personal circumstances. If you would like guidance or advice, contact AustralianSuper or your financial advisor. Thanks for joining us again, today, Helen.

Helen: Thanks for having me, Shane.

Shane: Thank you for joining us today. If you're an AustralianSuper member and you would like to join us to share your story or have a question or a topic you would like us to cover, then click the link in our show notes to get in touch.

If you've enjoyed this podcast, subscribe and share with your friends and family. See you next time!

Shane: Hello. My name is Shane Hancock, and I am the Head of Member Products, Guidance and Advice at AustralianSuper. And welcome to our podcast, The moments that count. Before we start, it's important to note that the information discussed in this podcast is general only and doesn't take into account your needs or personal objectives.

You should assess your own financial situations and needs. Today, this podcast is being recorded at our head office on the land of the Wurundjeri people of the Kulin Nation. I and AustralianSuper acknowledges the traditional custodians of country throughout Australia.

We pay our respects to elders past and present, and extend that respect to all Aboriginal and Torres Strait Islander peoples. 

AustralianSuper has the privilege of 3 million members, trusting us with their retirement savings. Each of those members has their own story, and today we're going to hear one of those stories. 

I have the pleasure of being joined by John M, a member of AustralianSuper. Welcome, John, and thank you for joining me.

John: Pleasure. Good to be here. 

Shane: Okay, John, to kick off, tell the audience a little bit about yourself.

John: Goodness me. Obviously, my name is John. I'm turning officially old next week with a very significant birthday. And I've been retired now for 11 happy years. And they've been very, very good years for me, they really have. And that's largely the result of being financially stable, so it's been good. 

Shane: So I won't ask you about that significant birthday, John, but tell us a bit about your family.

John: Sure. I've been lucky enough to be married to the same lady, for, she'd kill me if I can't do this right, 46 years coming up. Three kids. We've got a 43 -year-old, a 42-year-old, and our baby is about to turn 32.

She was the unexpected one that made us buy a bigger house, a bigger car, and change our lifestyle completely. 

Shane: So the golden child. 

John: The golden child, indeed. Wouldn't be without her now. 

Shane: Great. And you got grandchildren, you're saying?

John: Yeah, yeah I've got a 15-year-old, well, she's about to turn 15 and she's lovely, she's a little princess and a couple of six-year-old boys that I struggle to keep up with because they are little live fires. 

Shane:  They keep you on your toes.

John: Ah, yeah. 

Shane: ? So you just mentioned you've been retired for 11 years? Tell us a bit about John's working life. 

John: Sure. I spent my life in heavy industry making packaging. Flexible packaging, all that bright, pretty packaging you see in the supermarket that wraps up your Tim Tams and your Cherry Ripes and your rice and everything else. 

Chances are it came through my business. I started out working essentially in administration. Then I had a production role, and I wasn't terribly good at any of those. And then somebody invented quality management. 

And I was lucky enough to be one of Australia's early quality managers. And as a role, it fitted me like a glove. It was all about continuous improvement.

And I became very passionate in that and learned to live that life. And I don't think, a lot of people thought I was weird and didn't quite know what I was doing a lot of the time.  But I did help improve our businesses, and it was good for the business. It was certainly good for me. 

Shane: How great is it to find a role at any stage in your career that you're passionate about? 

John: I was very, very fortunate, right place at the right time. 

Shane: And did that, just that passion that I can just see from the way you've talked about that, did you extend your working life as a result of that?

It wasn't enough in that for you to postpone retirement? 

John: Look, it actually was, I may have left a couple of years earlier, but there were projects that weren't finished and I wanted to be part of those and I also worked on a new site for a couple of years just to try and improve the culture there a little bit.

And I had some small parts to play in that and I was pleased with that. The other thing was that I got a lot of freedom to travel and visit customers all over Australia and some overseas as well. 

And I've learned that the greatest thing about being involved with customers, with people, suppliers, is you cross the line from the business relationship and you actually create a friendship. 

And I've got a whole bunch of people that I still make contact with from all over the place through my working life. And that's been very good for me. 

Shane: As I said, I can see the passion, but also the enjoyment you got. So we'll come back to what you do in retirement, because you've talked about that passion, but we're here, really, to talk about planning for retirement.

So in that very full and passionate career, when did you start thinking about superannuation and retirement? 

John: It must have been in my 40s. We had a couple of presentations in our workplace about superannuation. And really, at that stage, I was still worrying about paying off mortgage and doing those. There were other priorities. Super was somewhere out there, but wasn't really part of my life. 

I was also a long way off before I was going to need it. And I remember there were two presentations. There was a group of six young men in suits with carrying huge amounts of literature and handing it out, it was as if they were trying to sell me a new car.

And I'm looking at them and I'm thinking, someone's paying for all of this. And then a couple of weeks later, we had a lady come along. She looked like somebody's auntie, and she was carrying a projector, and that's how she did her presentation.

And her information was flawless. She was incredible. I tried to trip her up with questions. Nothing phased her. She worked for a company called Australian Retirement Fund, who are of course the predecessor, precursor to AustralianSuper.

Shane: Well, that's an excellent story, and not one we put you up to, John. Thank you for that feedback. So you talked, then, a bit about the timing being in your 40s, but really the trigger was people coming in to your workplace? 

John: Yeah, yeah. And I started to realize that there was going to be an end to the working life and somehow I'm going to have to finance that. Because I was thinking, wouldn't it be cool to be able to live for a few years without actually working and have some money?  And yeah, look, through a series of events, I've managed to facilitate that and glad I did. 

Shane: So just extending on, so there's information you got, but what I just picked up in your response is you had two different groups come in. It seemed to me there was more than just the information that got you to buy in. Was there something in that about the trustworthiness of the different types of people that were talking to you that made you think differently?

John: Very much so. I won't name the other group, but they were a private company. I could see that not only did they have to provide me with a return, but they had to provide shareholders with the return as well.

And I'm thinking, how really does that work? Whereas the industry fund and I understood that concept even then, the industry fund works just for the people that invest in the fund. And they were a good fund then and have continued to be a good fund for a lot of my life.

Shane: Great. So that was the time where you started to think about Super, and when did you start to take some proactive action in relation to saving for retirement? 

John: Yeah, a number of things. I started to voluntarily contribute just a little bit more. It's amazing how much an extra hundred bucks a month, what a difference that can make over time, if you can find the money to invest, it really is an investment. 

And then there was a period, I think it was the Howard government, there was a Treasurer called Peter Costello, who introduced a scheme where you could put lots of money into super, like 100K a year. So I thought I was looking at interest rates. Interest rates were low, superannuation returns were high.

I started to borrow significant chunks of money and put it into super with the thinking the super fund will outperform the interest that it's costing me. And it did. The scheme worked. I managed to, I repaid the debt and kept the profit. 

Shane: And that was on retirement, you repaid that debt? 

John: No, I did that well before because I had a fortunate break in life along. A boss of mine left our business and went and worked for the opposition and he had a good crack at headhunting me and through a series of events, my salary escalated dramatically and I was very pleased with that to the point where I could choose how much I lived off and the rest went into super. But I could not think of a better place to put spare money than Super. 

Shane: And what age would you have been when you started to do that? 

John: I think 50. 

Shane: Yeah. So sort of about a five to seven year gap between trigger of education and--

John: Yes, yes. 

Shane: And one of the important things or common things that happen that we hear a lot and you mentioned earlier is in your 40s or 30s or 50s, depends on who you are, superannuation is something you think about, but you might have other expenses and young children or mortgage or other things.

John: Of course. 

Shane: And clearly that strategy that you took worked for you and I'll just reiterate that we're here and providing general advice and that strategy is what John decided to take. 

John: Yeah, absolutely. 

Shane: So when you look back on that, that gap between the education session and the action of actually doing something, was there any other places, resources, people that you turned to for help or advice to take that next step?

John: I was very fortunate that I worked in a workplace where there was a small group of managers and I was very close to some of them. And we just openly discussed our finances, and none of us were taking superannuation seriously.

And we decided as a group to, let's get our act together and have a little think about this. And sharing information is a wonderful way, especially with people whom you trust. 

Shane: Yeah. So that family and friends... 

John: Absolutely, absolutely. 

Shane: Somebody you relied on. And I'm picking up through both your passion and your work. And then the comment you made then about what you described as being fortunate was built around relationships.

John: Absolutely. Oh, God, relationships are everything.

Shane: And so you put that strategy in place. Were you thinking at any stage about when you might retire? I think you just mentioned at the beginning that you may have extended your working life due to the love of your job. But did you have a goal in mind when you started to do that? 

John: Look, there was a period when it was very trendy to retire at 55. That was the thing to do. I sort of vaguely set that as a goal, but I was asked to go and work on a different site that had been struggling. It was a site that our business acquired, and I couldn't resist the challenge. I just thought, no, I'll do this for a couple of years. This will be good fun. 

And it was hard work. Oh, God, it was hard work doing presentations to night shift and all that sort of stuff. But look, it was fine and no regrets. I enjoyed staying on for an extra couple of years. 

Shane: But hard work might have made you realize that, "Hey, retirement might be a good thing." 

John: Oh, yes. At the end of that, I really was very, very tired. I was given a lot of free rein, so I'd often start my day at the airport. And you do that for a while, and you feel very important. But you do that for a few years, and you feel very tired. 

Shane: Yeah, I bet. So just thinking back again about those decisions that you made, you've talked about the education. You talked about the people from work that you referred to, but you also referred at the beginning about your longstanding wife.

And how did you go about engaging and discussing that in the household, about what your retirement plans were? 

John: She still works a little bit. It's quite strange. She doesn't know how to stop because she's working from home. She was most concerned for me about how I was going me to fill in my time in retirement. That was the real concern. She simply said, can we afford for you to retire? 

And I was pretty confident by the time I retired, yeah, we can afford retirement.

Because not only was me speaking, I went and sought completely independent advice as well, "This is what I've got, what do you reckon?" sort of thing. And, yeah, it was a joint decision, and thankfully, she agreed. But she still she still rocks up for work occasionally. She works from home. 

Shane: So that joint decision, was it joint, as in, it sounds like engaging, can we retire? But did you look at the decisions around the strategy as a couple?

So your wife was looking to do similar things, or you were looking at your superannuation separately or your assets separately?

John: Oh no, my wife had superannuation as well, with the same fund. We, I always think of our superannuation as a collective thing, so it's our money, and this is how much money we've got.

And were we able to retire? Yes, we were. And look, despite the fact my wife still works a little bit, in retirement, we've done some nice things, and that's really what I was hoping for. We've done some nice things. We've been on some good trips. We've done some I mean, ever been to Morocco? It's amazing. 

Shane: I haven't, John, but I'm happy to hear the stories...

John: Go, just do it. 

Shane: Excellent, all right, I'll add it to my list of when my children finish high school which is a long time off. There's a lot of things there. My head is spinning with some of the comments you made. I want to come back to your wife still working. I want to come back to what you've done and what you're doing in retirement. But you made a comment there that you also sought independent financial advice.

John: Absolutely. 

Shane: So at what stage did you do that? 

John: I did that a number of times. I would have done that when I started borrowing money. I went and spoke to this gentleman and said, "Am I crazy doing this?" And he said, "You just stay on top of it, watch it closely, and you'll be fine." 

Because we went over what super funds were returning year after year after year and which fund and how they were doing, and we were looking at interest rates and the history of interest rates.

So he said, "No, you'll be fine." And then I repeated that exercise, I've been to see this one chap who I've gotten to like, I've been to see him maybe five times over, it's not often, five times over 15 years.

Shane: Yeah. And when you decided that you wanted to speak to an advisor and either clarify what you were thinking or going some other direction, how did you go about choosing who that adviser would be or researching?

John: That's really hard. That's really hard. It took me a very long time to find, his name is Tony. It took me a long time to find Tony, who is completely independent and just gives independent advice based on his experiences, and he's been very good for me.

Shane: So you found Tony, that advisor through family recommendation, or how did you get on to Tony? 

John: You know what, I can't remember. I can't remember how I found him, but I found him. 

Shane: And you were going to him with your wife, as well, as a family? 

John: Absolutely. And even took my daughter last time to give her some advice because she started, you know, buying a property and all those things, so yeah, yeah. 

Shane: So that that's an interesting point is obviously for Tony, he's happy that he's getting a referral from you, but, it sounds as though that's because you build up a trust and relationship with him. 

John: Absolutely. Yeah, yeah. 

Shane: And you talked about the age of your children before too. And it sounds as though they're turning to dad for, "Dad, what do I do next?" 

John: Well, there's some of that. One of the boys, he's gonna be a land baron. He's got four properties now and still building. So he's going to be just fine.

Shane: He's got his strategy in place and farmhouse for mum and dad when he needs it. 

John: Yeah, absolutely. That might be that downsizing you talked about. 

John: Maybe it will. 

Shane: So I want to go back to a couple of things, but just picking up on your point that your wife's still working and she could retire if she wanted to, is that because she loves work so much and that's her goal?

John: The way she explained it to me was, I found it very difficult to sort of do things for my kids. If one of the kids was sick or something had to happen, it was very difficult for me not to go to work.

So the default was that she would do it. She said to me, "I finally got the freedom to work...". And she likes her job. She likes her job. She likes the people she works with, even though she doesn't see them face to face.

She really likes the people she works with. She likes her boss. And the way she says, I get out of bed and I walk to the dining room, sit in front of the computer. What she doesn't explain is that she has a cup of coffee made for her, she has a cup of tea, she has a morning teammate.

And there's this little person that makes her lunch every day. She gets very well looked after. 

Shane: Her retired husband, I assume, John. It's payback time by the sounds of it. 

John: And that's fine. That's all good fun.

Shane: But it's a really interesting point there. You talk about, your wife is in effect, she loves her job, what she's doing, but she's also possibly making up time where her family rightly, was her priority. And so now there's a personal satisfaction, and that's obviously a challenge for all working parents these days.

We're seeing it both male and female of balancing that work-life balance. And it's great that for your wife, there's that time now where she's like, "Well, maybe I don't need to work, but really want to." So that's fantastic. 

John: We had the conversation this morning. She said, "What am I going to do, John, I can't work forever, it's time to stop, isn't it?" And I'm thinking, well, yeah, you decide, if you're ready, do that.

Shane: Maybe you better disclose, though, before she makes that decision that the coffees and sandwiches and everything might slow down a little bit. So earlier on, you started to talk about the fantastic things that you are doing in retirement.

So when you were thinking about, so you thought a lot about your financial retirement, how financially you would support yourself and your family, did you have a vision around what retirement would look like for you in relation to how you spent your time?

John: No, I didn't. I didn't really understand what I'd be doing. I knew that I wanted to travel a lot, but beyond that, I really didn't have it quite worked out. Now, I've got very mischievous kids, and one of them found an ad on Seek for a Food Taster and laughed at me, poked me in my big tummy and said, "Dad, you've been around food all your life, why don't you apply for this?" 

It turns out I was a chocolate taster at Cadbury for six years, very part time, and it really is such a job and it was the best fun. My other child, my daughter, she engaged me with a talent agency, and I've got no talents at all.

Shane: Well, I'd argue with that, John. You're killing it here. 

John: But what that led me to do was do a number of TV commercials for people like Kohl's and some beer companies and things, stuff I couldn't have imagined.

Shane: Anything still on TV now? 

John: No. 

Shane: All right, so I can go to YouTube and find it. 

John: Thank God, no. There's nothing else left at the moment. I'm between jobs as they say. 

Shane: Right, okay. Well, the chocolate tasting fits right in with your quality assurance roles you had there.

John: That was more research and development. 

Shane: Yes, for six years, you had a good crack at it. 

John: And of course, the other job, well, the chocolate thing is finished now. They moved that whole process to India. But the third job, the one that's still live, is in November I go to Myer just down the road here, I go up the 7th floor and I put on a red suit and a white beard and...

Shane: Santa Claus!

John: It's the best. 

Shane: And you're still doing that? 

John: I didn't do it this year. I had some knees replaced, but I did it for 10 years prior and I'll be back next year. 

Shane: Well, there you go. I didn't know that. You didn't mention the Santa. I knew a little bit about the chocolate, but Santa Claus I'll have to keep an eye out next year if my children come to Myer Melbourne.

John: It's such a fun gig. 

Shane: We'll come back in a minute to other things you're doing. But so you've retired officially from your full time work and you've done some part time work in varying really interesting categories.

But I'm not picking up and correct me if I'm wrong here, I'm not picking up that was a financial driver to do those. 

John: Not at all. No, not at all. The thing that I said to myself was when I was working, especially in the latter years, I thought that I was pretty important at work and I had my job down pat, and I thought it had to be good for me to get way out of my comfort zone.

So that's what I was doing. I was doing stuff that I couldn't have imagined doing. When you're used to telling people gently what to do and what my thoughts were to have a movie director yelling at me, saying, hold your hand up higher in this ad, you think, "Hang on, I'm in a different environment than I was at work..." And that's been very good for me. 

Shane: Yeah. And it's a really interesting point, is that you made the point around not so much your level of importance, but it's almost like the status that you had as a full time worker and then all of a sudden, it's like, well, that's not important, I'm just going to have a bit of fun here.

John: Well, that's something that, you know, here's advice to retirees, you've really got to get your head around the fact that your status in it changes, your whole thinking changes. You're no longer that person, you're no longer that policeman or that managing director or whatever it was you were.

You're just a citizen and like everybody else. And when you get your head around it, it's a relief. It's a relief. It's lovely. 

Shane: Yeah, it's interesting. So you say it's a release and it's a relief, and then we do hear of other people who their whole life was associated with the status and who they are with the workforce, and so for you, it was relief, but then you found this other layer of commitment or enjoyment, satisfaction. So speaking a bit more about that, so you've talked about the work that you've done and you went into retirement without necessarily a plan on what's next and what have you done?

Have you gone about what else you're doing? You talked about holidays, you talk about grandchildren. And just while you're thinking about that, how much does finance and your savings factor into your thinking around, well, what am I going to do in retirement?

John: We're in the fortunate position of, if I can think of something sensible that I want to do, I won't go to the casino, but if I could think of something sensible, like a trip or we want to set up a small fund for one of the grandkids or something.

Shane: Or eat chocolate for six years. 

John: Or that, we can do it. That's been very good for me, the fact that yeah, I think I'm not showing off, but I'm calling myself financially independent, which is nice. 

Shane: And I'm guessing and you said the word nice there, that there's an emotional feeling with that. 

John: Very much. Very much. And most of it is with AustralianSuper. And there's and well, it says a lot about AustralianSuper because loyalty to an organisation isn't something that I feel at all.

If they weren't performing, they wouldn't be my superfund. It's simple as that. I change banks, I change insurance companies with impunity. My bank wouldn't extend my line of credit. I'll go to another bank and did just without any hesitation, fine. I compare AustralianSuper's performance to other funds often. 

Shane: Yeah. Okay. 

John: And I can't find a reason to leave. 

Shane: So it's a really good point around your engagement with your finances. So you talk about comparing how often, how do you do it? You've talked a lot about how in your decision making, you've spoken to family and friends and your financial advisor. What are the ways in which you keep on top of your finances and whether they're performing the way you think they should? 

John: You'd probably think I'm completely crazy, but I look at my super every single day. 

Shane: That's why we have an app for you, John. I hope you're using the app. 

John: No. 

Shane: Okay. We'll talk about that after the podcast.

John: I log into AustralianSuper every morning and I look at my two balances, I look at my wife's two balances, I add them up and I say, oh. Then I keep an eye on what the stock exchange is doing. It's up about 30 points today.

We're making money today. We're in, the day after tomorrow; my super fund will have incrementally increased. I'll be making a little more than I can spend. 

Shane: He knows the timing and the processes very well.

John: Well, it's just become a little sort of hobby, if you like. And I can pretty much predict it's up 30 points, so I know how much my super is going to go up by. 

Shane: So you so you're doing it on a daily basis, and, and what we hear from some retirees in particular, some don't want to check their balance daily. And so for you, is that a satisfaction? Is it a knowledge reason? Is it, I can move on... 

John: It's just a satisfaction. If there's any fraud going on, I'll know within a day. I'll know within a day, and it takes five whole minutes of my day. It's no big deal. It's just make coffee, go to a computer. What's happening? It's fun.

Shane: So you mentioned, obviously, on top of your finances, and you think about, if I can find something sensible, I'll spend the money on it. So you're still really active from what I hear and can see. What about thinking about the future? So you're thinking about what other financial requirements you may have as you and your wife age even more and how you might be funding for that latter period of retirement.

John: We have a house, which, if we get to the stage of life where we have to go into some sort of care, we can finance that. That's fine. Superannuation will look after our day to day expenses. It's fine.

I'm feeling comfortable. I'm feeling comfortable that money is not the primary problem anymore, and that's nice. 

Shane: And you've used the word comfortable, and you use the word nice in the positive way. And I think when we talk or when you hear people talk about having a comfortable retirement, it is an individual comfort level. And so I can see just and hear from you that you've got that level in place, and you're monitoring that regularly, both financially and emotionally.  And your focus of you and your wife is on how you can maximize that time together and with your family.

John: Look, it's something. It's something I'm very proud of because in the early years, oh my goodness we were poor. We had no money at all. Every mortgage payment was a struggle, every bill was a struggle. Life was hard for a long time, but we had no support from anybody and we worked our way through it. 

We just simply worked our way through it. And no matter how hard things get you got to have a positive state of mind to say look it'll be better tomorrow let's just keep plugging. Keep plugging. Don't stop. And I mean super is not a dream ride either. 

I was in AustralianSuper in 2008. There was a little event called the GFC, my superannuation halved in value, halved, half of it disappeared into the bloody ether. Not much fun there. I'm sitting there at work thinking the one thing that I kept telling myself is don't change anything. Don't sell, don't get out of anything. 

BHP is still making steel, Myers still selling clothes, Woolworths are still selling food.

All these businesses are still working just the fact that share prices, everything's low, hang in there. So all I did was essentially nothing, just waited and watched and of course government started putting huge amounts of money into their own countries to get things moving again and bingo. Not only did it recover, it went way past where it was. 

Shane: Well, it's obviously that long term investment nature of super. But just working out the numbers, if I get the numbers right, you said you've been retired for 11 odd years and so that GFC would have only been four or five years prior to you retiring.

So that time frame, were you thinking about, okay, the market is going to recover, I've got five years, or were you thinking, well, I'm going to stay invested longer than the five years? 

John: I just I was just very confident that it was going to recover, and it did.

One thing, my financial adviser's got this magnificent wall chart of the Australian share market since since inception. 

Shane: Yes, I think I know that chart. 

John: You know, I think everybody that's a little bit interested in money knows that chart, and it does matter. And yes there are those pumps, but it keeps going up, and I am completely confident it's going to keep doing that. 

Shane: So at that time, when the GFC hit, which is obviously a significant event, you talked a minute ago about checking your balance on a daily basis, and you're at a different stage of your life. What do you do when the market drops now? And you've talked a minute ago about how the market is up, and that's great, but how do you feel and what do you consider doing when the market is down and you see a drop in your super balance?

John: I just think it'll be better tomorrow. Market went down yesterday. It's gone back up a little bit beyond where it was yesterday today, I can't see anything on the horizon. If there's anything that I fear, it's another GFC.

It's unlikely. You got to put your money somewhere. And superannuation funds are primarily invested in the share market. I understand balanced funds have different offshoots, but I think Australia's Super, about 70% of the balanced fund is in stocks and is in shares.

Shane: Growth asset share. 

John: Yeah, something like that. And I choose to have some of my money only in Australian shares as well, because I like Australian shares. There's no reason to believe there's going to be a massive financial crash, and I think we'll be fine.

Shane: So, in effect, you're drawing down an income from your retirement, but you're staying invested in the market at the same time. 

John: Absolutely, yeah. Absolutely. And I have more, a little bit more money now than when I actually retired. So that's how the market's been performing. 

Shane: Through that in staying invested and that long term time as well as I think just to point out that you're drawing, how often you're drawing an income? Fortnightly, monthly? 

John: Monthly.

Shane: Monthly out of your account.

John: There was an article in The Age two days ago about comparisons between super funds and there's a lot of blurb, AustralianSuper, it doesn't always come out on top, but gee, it comes out in the top two or three. It does really well.

Shane: Like I said, John, we haven't put you up to any of this, you’re saying AustralianSuper--

John: But no, and AustralianSuper weren't the only one. No, there were some other funds that did just as well, but there are an awful lot, the majority didn't. That's the thing. 

Shane: I think the key point there is that you're heavily interested in your superannuation. You've got various sources of knowledge and you're on top of top of the market, which not only gives you the knowledge, but it gets back to my point around comfort.

John: Yeah, I genuinely enjoy doing that and genuinely enjoy watching. 

Shane: So, John, I think we could go on for a bit longer. And I've really enjoyed our conversation today. And not only hearing your personal stories, which are really interesting. Not just the chocolate story, but the way in which you've thought about, act and acted on, and most importantly, enjoying your retirement. 

Although the amount of additional jobs you're doing, I might just call it post full time work, period. John, thank you for joining us and all the best to you and your family. 

John: Look, it's been an absolute pleasure and for all of you potential retirees, get out there and do it. It's great.

Shane: Great, thank you, John. 

Thank you for joining us today. If you're an AustralianSuper member and you would like to join us to share your story or have a question or topic you would like us to cover, then click the link in our show notes to get in touch.

If you've enjoyed this podcast, subscribe and share with your friends and family. My name is Shane Hancock, and I look forward to the next episode where we will hear from another AustralianSuper member. See you next time.

Shane: Hello. My name is Shane Hancock, and I am the Head of Member Products, Guidance and Advice at AustralianSuper. And welcome to our podcast, The moments that count. Before we start, it's important to note that the information discussed in this podcast is general only and doesn't take into account your needs or personal objectives.

You should assess your own financial situation and needs. Today, this podcast is being recorded at our head office on the land of the Wurundjeri people of the Kulin Nation. I and AustralianSuper acknowledges the traditional custodians of country throughout Australia.

We pay our respects to elders past and present, and extend that respect to all Aboriginal and Torres Strait Islander peoples. 

AustralianSuper has the privilege of three new members trusting us with their retirement savings. Each of those members has their own story, and today we're going to hear one of those stories. 

I have the pleasure of being joined by Karen B, a member of AustralianSuper. Welcome, Karen, and thank you for joining me.

Karen: Thank you, Shane. Pleasure to be here. 

Shane: Thank you. Now, firstly, you were telling me that you preferred to be called KB, is that right? 

Karen: I do. 

Shane: Okay, so if you're okay with that, we'll refer to you as KB today. So, KB, tell us a bit about yourself. 

Karen: Well, I'm 67 years of age, and I've recently moved to Brisbane from Melbourne about six or seven months ago to be with family. And yet I'm looking forward to my future, and I'm really looking after myself healthwise so that I can live till I'm over a hundred.

Shane: Fantastic. Wow, over a hundred, so you need to have a good retirement plan. 

Karen: I do!

Shane: Excellent. So yesterday when we were talking, you were telling me about your career, and it sounds like you've had a really interesting and diverse career. Can you tell us a bit about that? 

Karen: Oh, my gosh, where will I start? There's been so many changes. Probably my most favorite is working for the Sunshine Television Network. That's where I had a chance to actually sell television advertising and appear on television and also do voiceovers.

Shane: And so you also mentioned a few other things that you did prior to that. So you had a few different businesses or worked in different areas?

Karen: In 2009, I started an eBay shop and it's still running. 

Shane: Fantastic.

Karen: So I'm really looking at having seven streams of income. 

Shane: Wow. 

Karen: I probably do have seven streams of income now. Some are better than others. 

Shane: With that diverse career and diverse aspects of your income stream, when did you start thinking about superannuation?

Karen: Probably about 45 years of age or a little bit older. Back in my day, when I first started working, there was no superannuation. So when it started up, I was very excited about it because the government's helping us with our future.

Shane: Yeah, yeah. And how did you initially, when you got that excitement, how did you start to think about learning about Super and how it might work for you? 

Karen: Well, really, it's your employer, the government looking after you with the Super. And whenever I've come into some money, I've always looked at it, how can I double that money? How can I make that money work for me? Well, you're making money through your superannuation, but I also started to look outside that, how I could build my wealth for a better retirement. 

Shane: Excellent. So you talk about thinking about your retirement. You've talked about Super and how that's rolled. Were there any events or triggers in that particular part of your life or that thought, "I've really got to start thinking about super and retirement..."

Karen: Well, I've had quite a few years where I've been a single mum and I've struggled. And some people say I've put too much emphasis on money, on wealth, but if you can't pay your bills, that's no fun. So probably back during that time, I was looking for a way to make my life better, and if I can build my funds and I have sufficient, maybe I can help others.

And also, I'm a real advocate for being a role model for other women and helping them be successful, even if it's just in a small way or a word of encouragement or a few ideas. 

Shane: Great. So just on that, are there things when you talk about a role model and ideas, are you going about that in any particular way? Is it talking to family and friends? How do you sort of share that wisdom? 

Karen: Well, I first listened to the women that I come across, and I'm thinking about one particular young lady as we speak, a 27-year-old lady from Pakistan who I worked with and always felt that she was gifted and she had a lot of presence and she was able to pick up things very quickly.

So I used to talk to her, and I still do. Not so much now, but how she could build her future. And she was a really good learner. And I saw her build her first home. 

Shane: Right. 

Karen: And came up with a few ideas. Some I'd like to think they were inspired by me, but some of them were also her own. And it was so exciting to see her prosper and develop. It's amazing. It makes me happy. 

Shane: Yeah. Fantastic. And so that emotion that you talk about, making you happy, you talked about when you made the decision that you wanted to pay your bills and the struggles you were having, you wanted to make sure that in the future you were taking care of those particular things.

There's obviously a financial element to that. But what was the feeling that you were looking to achieve out of that? 

Karen: Well, freedom and being able to make whatever choices that you wish. And I feel I'm at that stage now, and it feels fantastic. I can work if I want. I can not work. I can travel. I can spend time with family. All my bills are paid. It's a wonderful feeling. 

Shane: Yeah, that's great to hear. And so I'm getting the sense that choice, flexibility are the things that you're looking for. What are the things you're most enjoying now? I think you've just reeled off a couple, but what are those things that maybe 10-15 years ago you might have thought, "Am I going to be able to do this?" 

Karen: Yeah, well, what's really inspiring me at the moment is my two young grandsons, six and nine, and I'm now being able to spend time with them. It's the school holidays right now. 

Shane: It is. 

Karen: I'm not with them today, but I certainly was yesterday, playing in the water at the water park in Brisbane and having a great time with them and bonding and laughing. So that means the world to me, and I'm able to do it. 

Shane: Just getting back to superannuation for a minute, so you talked earlier about being introduced and the government helping and others. So when you started to see your Super balance grow and you started to increase your knowledge, you talked about some people you turned to.

Did you look at other ways of learning about superannuation and how you might be able to maximize those? So, did you turn to your superannuation fund or financial planners or others? 

Karen: No, I didn't, actually. I just turned within myself. 

Shane: When you were looking at making your own decisions, you were using various forms of information, and you said you diversified your approach to retirement. 

Karen: Yeah, so I started buying property. My first property was in Phoenix, Arizona. And it's very scary too, you need a lot of courage to step out, because I'd never bought a property in America before. And then I followed up with another two properties in Atlanta.

Shane: Now, you've talked a lot about your family and your children, and superannuation has now been around for a number of years for those particular generations. Is it something that you talk to them about?

Karen: I do. I try to encourage them to put extra funds in. You know, it can just be $50 and I like looking at the AustralianSuper app. You just can press a little quick button. It can be as little as $50, a 100, a 150, I can't remember all the amounts, but it doesn't matter how much. If you're doing it regularly, it's going to compound and make life better for you in the future. 

Shane: Is that something you do on your own? Not so much the contribution, but are you checking your superannuation, your investments, quite often, or is it more like a set and forget type thing for you? 

Karen: Oh, no, I'm checking it every few days. 

Shane: Excellent. 

Karen: I love looking at it. 

Shane: How does it make you feel when you're looking at your investments and the pathway that you set yourself on? 

Karen: I'm very proud of myself, what I'm doing, and I give myself a pat on the back. Yeah, it's a good feeling. 

Shane: So you've put a lot of thought to your retirement, and I use that word loosely because I get the sense from you that it is more than just the non-working part of your life. You talked about the flexibility. Now you're there, what are the things you're most looking forward to? 

Karen: Well, I set a goal a few years ago. It was actually before COVID.

Shane: Right. 

Karen: To spend three months of the year in the USA, about the same in New Zealand and the balance in Australia, since COVID I'm not sure, I might be relooking at that, but I certainly will be going to those places regularly.

Shane: Yeah. Excellent. Have you got a trip planned already? 

Karen: Well, my next trip is Sweden. That's where some of my ancestors come from, so I'd like to check that out. And looking at going to New Zealand at the end of February.

Shane: So now that you've set yourself to a way that you think you're progressing in the direction you'd like, tell us a bit more about the future and what you want to do. Extend us on that vision and the trips and family.

Karen: Well, I've also got a plan for my 70th birthday, and what I'd like to do is fly to Florida. 

Shane: Yes. 

Karen: And then jump on a cruise ship to the Bahamas. So that's another goal I've got set, and I probably will take that out of my superannuation.

Shane: Yeah. 

Karen: And I'm saving towards that.

Shane: Fantastic. And that's great to hear that you're thinking that you're superannuation is there for you to enjoy retirement. So when you're thinking about your superannuation, are you seeing that as a resource for many things?

Karen: Well, yes, and I've already put it into place. I'm actually really living the dream already. 

Shane: Yeah, it sounds that way.

Karen: At 67 and I'm just so thankful that I've got such great health to really be able to enjoy it.

Shane: Yeah. And so just talk to us a little bit about health. You talked about at the beginning you had a real focus on health. And we see in retirement, there's the financial element, there's the comfortable element of people feeling comfortable, and then there's health, that's crucial. Tell us what you do to keep yourself healthy and why that's so important? 

Karen: Well, I have had an aerobics business back in the day when it was called aerobics. 

Shane: That's the question I was looking for earlier, and you didn't get me to it, but that's fantastic.

Karen: So, yeah, I started that in my hometown of Bundaberg, and I built that up. And in the end, I was employing two or three other instructors. And I also thought about having the local football teams come in, maybe for a Tuesday night or a Thursday night come in, and they really found it very difficult because the moves are different to the way they train.

So that was exciting as well. And then I also took on some of the local high schools and did a few classes in my lunch break. 

Shane: So you said then that you were an employer of a number of people, so obviously superannuation plays a role as an employer. When you were an employer of people, did you think about the role Super was playing for them?

Karen: Actually, no, I didn't, because I was much younger. And I think age has got a lot to do with it. We all, we just don't think we're going to get old and then it creeps up on us so quickly.

So we really need to prepare when we're younger. But, yeah, I've been guilty of not thinking about it when I was young, but I still think I jumped in in time and was able to make it happen. 

Shane: Yeah, we said earlier it was about 45 you started to really actively think about it. As I said, you've put a lot of thinking and planning into your retirement, but if you could do anything differently, would you do it? And if so, what would it be?

Karen: The only thing I would do differently is start putting money into superannuation regularly back in the beginning, rather than leaving it to the middle part of my life. And I'm now at the pointy end of my life.

Shane: I think, by the sounds of it, you're a long way off the pointy and you're at the enjoyable end of your life, so... 

Karen: Oh, I like the way you think. 

Shane: KB, if you could pass on any tips to your grandchildren or others, what would they be?

Karen: Start off and create a dream, something that you're passionate about, something that you want to work towards, and then imagine yourself doing it. Write it down, read it regularly, and I write it down every day.

And another thing I write down is money comes easy to me. I write that down every day. And I think believing it, seeing it, feeling it, imagining it, and just keep doing that. 

Shane: Fantastic. Thank you, KB. I think I'll be following those tips myself. It's been a pleasure talking to you, KB. Thank you so much. I've really enjoyed our chat and it's a great example of someone taking some real care and consideration and action to manage their next phase. So good luck and enjoy all your planning. 

Karen: Oh, it's my pleasure. And I hope that we've helped someone else and I hope we've inspired someone to really focus on their superannuation. 

Shane: Thank you for joining us today. If you're an AustralianSuper member and you would like to join us to share your story or have a question or topic you would like us to cover, then click the link in our show notes to get in touch. 

If you've enjoyed this podcast, subscribe and share with your friends and family. My name is Shane Hancock, and I look forward to the next episode where we will hear from another AustralianSuper member. See you next time.

While everyone’s idea of retirement may be a little different, living your ideal lifestyle after you finish working will involve careful planning. See what things you could do today to retire with more confidence in the future.