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.
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?
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.
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?
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.