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.

Just a warning, this episode does touch on issues around mental health, depression and anxiety, and some listeners may find this confronting. If you or someone you know needs support, please reach out to Lifeline on 13 11 14.

AustralianSuper has the privilege of 3.3 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 Ross Mitchell, a member of AustralianSuper. Welcome, Ross, and thanks for joining us today.

Ross: Thanks very much, Shane, for having me.

Shane: So, Ross, to kick off, can you just tell our audience a bit about yourself?

Ross: I'm 59, entering that stage of what they call transition to retirement, I suppose, have for 20-odd years been in charge of my own destiny in terms of business and running my own businesses until an accident five years ago where I was a former motorcyclist, so tipped off a motorbike, smashed my shoulder, and then the subsequent recovery period and drugs that were associated with that did some cognitive damage and basically sent me from being a Ferrari to a Prius. So, yeah, I'm sort of semi-retired, but forcibly so, I suppose.

Shane: But as I said to you earlier, at least you were a Ferrari at some stage, so that's something to claim. So, tell us a bit about your work history. So you did 20 years of running your own business. What were you doing?

Ross: Originally, I started business coaching, leadership development, which I loved. Got a little unwell for a while, went back and did some consulting for a couple of years, and then 2014, bought into a cleaning business that was established and was there until the end of 2019. But going way, way back, I was a paper boy.

Selling souvenirs at the footy through school, never didn't have money in my pocket. And some of the things I'd love to have done then was save money.

But I didn't. I was pretty happy to spend it. Joined the SEC straight out of school, did a couple of years there. We went to Kmart and was in a management programme for Kmart until 1989 and then joined the cleaning industry. And that's how I got involved in AustralianSuper originally, which was when, I think, Keating brought in the mandatory super, about 3.5% for memory.

Shane: Yeah, yeah. And you've been a member with AustralianSuper since then?

Ross: Yeah.

Shane: So, talking a little bit about super for a minute and then we'll come back to the injury and the change in plan. So, you had forced super going or superannuation guarantee which helped you start savings and then when you went into working for yourself, it's a totally different environment for super savings. What role did superannuation play in that, if any?

Ross: Frankly, none. And again, I don't live in regret. There's things I'd do differently. If there's anyone listening who's in their own business, for goodness sake, just keep paying super. Just keep paying. It's just that thing that just keeps growing. Even if it has a bad year, it's still growing, it's still compounding, and it's the last thing at nearly 60, I'm sitting there going, geez, I really don't have enough super.

Shane: But at the time, probably if you explain to our listeners when you're thinking about cash flow of a business, super might not have been front of mind.

Ross: No, definitely not. And it's not a business coaching conversation. But certainly the notion of paying yourself first, making sure that you're paid before everyone else is paid, that's a really important message to get across. And honestly, if I had my time over again, I'd probably do it a whole lot differently. I wouldn't change what I did. Just how I did it.

Shane: Yeah, there's multiple considerations when you're running a business that you talked about. We hear a lot of self-employed people that the situation you talked about with super is quite common. I think we're starting to see even more now, again with that term of the gig economy where people are doing jobs and moving around as opposed to working for one employer where the benefit is there is a superannuation guarantee.

So, yeah, it's a good tip and as you say, you can't go back and change it, but it's good piece of advice for people. So, you were in the multiple businesses for about 20 years and then you talked about the motorcycle accident. Can you talk a little bit about that and how that impacted your plans?

Ross: I probably had a couple of warnings that I should have taken earlier and that was sending me a message that maybe I shouldn't have been a motorcyclist. I loved it. I really enjoyed the freedom and the smell of riding out in the bush and the smell of gum trees and stuff like that. Fantastic. Until you get roadkill. I was just out with some mates. I was actually going to my niece's wedding over at Bannockburn and I was out near Pearcedale going to catch the ferry from Sorrento to Queenscliff with my mates.

We agreed we were going to go a certain way. And we got to the first roundabout and one of the guys leading, he stopped at the roundabout and looked back square in my eyes and said, which way are we going? And at that point I applied my brake and unbeknown to me and unseen to me, sand and gravel on the road, on the corner of the intersection and the front wheel locked up, skidded. I was doing less than 10 kms an hour. Skidded, came to basically a stationary upright stop, and then the bike tipped.

Elbow hit the ground, smashed my shoulder. I now have hip problems that I never had. I've got wrist, shoulder, elbow, neck, the whole lot, all from less than 5km an hour speed accident on a motorbike. And then, you know, you follow the doctor's directions and they prescribe you a nerve pain management drug for 15 months.

And it wasn't until I was consulting a psych at one stage and he said, tell me about the drugs. He said, there's your cognitive issues right there. That has been told to me as being the thing that's damaged my ability to focus for any length of time.

I've started things. I've stopped things. I lasted, I resigned from a directorship of that cleaning business at the end of December 2019. Fortunately, we'd sold our home and cleared debt, so we're debt-free, which is really important to be at that point to where I'm at now, not having proper income of any significance. We can afford that because we don't have any debt, but if we didn't have debt, we'd be pretty well in strife.

Shane: So obviously, there's multiple aspects of the injury. There was the initial injury, and then there was the cognitive impact that you talked about from the medication. So when getting back to sort of when the accident happened and thinking about work and income initially, was there a view that, "Okay, you know, this will be okay for a short period of time, then I'll get back on the bike", so to speak?

Ross: I had about three months or so off, not really off the whole time. Part of my role in the business, I was a sales and marketing director, but I did most of the bid management and estimation, all of the leadership stuff, because that was my background. So there was a need to be involved in that. So, whilst I was not really fully functioning, I was still doing things and I think that probably hindered my recovery in hindsight.

Even though I had income protection insurance, I didn't even think about it. In the moments of being injured and looking at how life was going to be, the last thing I was thinking about was, did I have income protection insurance?

And it wasn't until 18 months later my policy renewal came through and I rang my advisor and said, "Sam, I can't afford to pay this." He said, "Why? What's changed?" I said, "Since my accident." He goes, "What accident? You should be on income protection."

That sort of started that ball rolling. But I had endured twelve months of working or attempting to work and being, I thought I was reasonably effective. I probably wasn't as effective as I thought I was, but I still got the job done. But it was hard going, really hard going. And then it's really the last probably three and a half years where the ability to work has been really compromised.

Just, I've literally started, I started a leadership role with people I'd done my training with. I lasted eight weeks, did a couple of years as a shop assistant at Bunnings and I was just, I was over it. I couldn't cope with it. I've started back with a mate of mine, put me into a sales role. I couldn't cope with it. So I haven't been able to cope, which has been the hardest part, as being someone who was really high functioning to being, I just get so anxious and uptight about work.

Shane: There's a lot in there. You talked about after the initial injury of doing little bits of work. Was there an element of, you talked about not having income, but was there an element because you were self-employed in a business that you felt like you had to do that?

Ross: It's funny because if you have an accident and it happened on the road, like I did and got ambulated to the hospital. So I was four and a half hours dislocated in the shoulder before they got it back in, and when they put my shoulder back in, they dislocated my wrist. So it's in a pretty bad way. But you're covered by TAC.

So TAC will do an income payment. It's not heaps, but it gets you by. Some of my business partners decided that we would avail ourselves of the income payment from TAC and not pay me. So, I sort of felt almost compelled to get back to work because we still had our mortgage, we still had all our things going on. TAC payments that was able to get me through a bit, but then I really needed to be back at work for my own sanity.

And my life partner, Shauna, she is just an absolute rock star. Time over again, I would have known about the income protection. I just would have gone straight on it straight away and then recovered properly. But instead I pushed through, and I think that's probably done more damage long term.

Shane: Your comment about the income protection is a really interesting one about people's awareness of insurance protection. So, whether it be within your super fund or outside your super fund, it's not uncommon for people not to be aware of it. And, you know, you look back now and wish you had known, but you can't change it. So, but when you were able to claim, so when your financial planner said, "Hey, Ross, you've got this cover...", what was the feeling first? And then what was the life impact it had?

Ross: It's heavy-going. It's a job in itself just completing the paperwork. And when you're not in a cognitive space to do it, it was excruciating and still remains that way at times. But knowing how much I was covered for as opposed to how much I was paid, because they went and backdated to the most recent year's income, which for various reasons, we kept making sure we managed our incomes down all the time instead of managing them up. So my payments are less than what they... About half of what I was insured for.

Shane: Right.

Ross: Which is why if we still had our old house, there's no way we'd be surviving.

Shane: Yeah. And the decision to sell the home, was that driven by the fact he wanted to reduce that debt and ease the burden there?

Ross: No, not essentially. It was actually more about my ability to manage, maintaining it, because I had no mobility in my shoulder. My shoulder's restricted. Just maintaining the house. I can't work overhead. I can't lift with my left arm about four or five kilos at the max or really struggle. And then the recovery after doing anything takes days.

Shane: You talked about the income protection insurance. Was there any other insurance that you had that you weren't aware of or an opportunity to claim on insurance you were aware of? A TPD, for example?

Ross: Well, I've actually lodged a TPD claim at the moment, so... And because of the difficulties I've had with completing paperwork and the difficulties I've had with my income protection insurer, who's also my TPD insurer, on a completely separate policy. So I was able to get a payment from the TAC, a lump sum payment, which is their statutory impairment payment.

And that's based on the percentage of impairment that you encounter. 39% whole of person impairments is significant. So, that was fortunate because we actually got that payment. I've got the TPD claim in at the moment. I don't know how that'll play out.

Shane: That insurance, the TPD and income protection are both outside personal policies that you have with that insurer. Did you have any insurance through your superannuation account?

Ross: No, I'd actually cancelled that part. And I cancelled that part principally because my super value was so low. The value in my account was at that point was below $100,000. It's a little bit above that now. And I've developed a share portfolio which is separate to all of that. But because of that, I went, well, a TPD payment, if I get a TPD payment out of super from the policy, it was about $100,000. My balance wasn't going up because my payments to the external insurer were being made from my super fund.

Shane: Got it, got it.

Ross: So whatever was going in every year was coming out in premiums, so it was quite expensive, the premiums. And I think right now I'm probably on a par with what I've paid to what I've received. So, anything from here on in is really is a benefit, but no other insurances at all.

Shane: I want to come back to where you talked about the different work that you've tried and the impact that's had on you, but just on super and income for a minute. So is your wife working?

Ross: She's a carer through the NDIS scheme. She's trained in leisure and lifestyle for old age people and young people with disability. Does about 20 hours a week through the NDIS. One of the things we did was we set up a family trust 20 years ago, and that's a discretionary trust, so we can operate anything within that trust that we want to, and we do.

So any work I do, unless it's paid as a direct employee wage, I invoice it through the trust. She invoices all her work through the trust. So, we still have some benefits that we wouldn't necessarily get if we were wage employees.

Shane: And so does that mean that she's not paying super or she is paying super?

Ross: We pay super. We both do contributions every month. It's not a lot. We've just upped it, actually. And she now pays fortnightly, a couple hundred bucks a fortnight in. And we now, 25% of every payment we receive from anyone goes into a GST holding account and or into super. So, we're actually making sure we're covering our tax and still developing our portfolio.

Shane: And are you doing that decision-making on your own accord? Have you got a financial planner that's assisting you, an accountant?

Ross: Got a mate who's an accountant who we changed to him this year for the last tax year, and he's across a lot of stuff. So we really sort of made decisions on our own without doing too much around advice from that perspective, I guess I'm reasonably well-read and whilst I'm slow, I'm still smart.

And I'm smarter for shorter periods of time than I used to be. So, I can do things for a couple hours and then I go, okay, I can't do any more, and then I'll come back to it. So I've read a lot of stuff. I follow a couple of people in the markets.

Shane: Ross, we've only known each other a short period of time, clearly. But what I have gathered really quickly from you is that you're driven and you're an achiever, and you got passion out of that. And you talked about, you used the analogy before of being a Ferrari in the past. You mentioned the different roles that you've tried and Bunnings and other things, and it came through really clearly that they didn't last as long as you'd like them to because you couldn't do it.

One of the things that's obviously really prevalent in society at the moment, but particularly we see it a lot in people that are forced into not working or retiring early, is the mental health impact. And so if you feel comfortable, would you be able to touch on that piece and how you've been able to work your way through it?

Ross: Sure. I do have significant mental health issues. I got diagnosed as bipolar about six years ago, I guess. I'd been through anxiety and depression. I'd been at some really, really low points with depression. Was close to knocking myself off a couple of times. And I don't say that lightheartedly, but I do have a psychologist.

I've been to a psychiatrist. I'm under medication, and I've got things I need to do to just look after myself. I've got a couple of very good mates who are similar to me. So there's normally one of us is in a really good spot. It's rare that two or three of us are in a bad spot at the same time. So, we've got each other to lean on and do. I see a psychologist because I just need to.

It helps me get through some stuff. But my mental health issues have been really... They've allowed me to take a look inside, a couple of times I didn't like what I've seen, but at the same time, I've been... When I've been really depressed, it's been a good learning point. Anxiety is probably the worst and anyone who ever experiences anxiety and depression.

Anxiety, everything matters. Depression, nothing matters. In between is hell and it can be really debilitating. So, to the point, at one stage, when I was running my coaching practise and I'd gone really well for a lot of years, I didn't go to the post office for three months. My wife didn't know I hadn't been, but I didn't go to the post office for three months because it was always going to be bad news.

It was going to be red letters and it was going to be overdue and cancellation notices and final notices and stuff like that. And she didn't know how bad it was because I kept it from her, which was stupid.

The ironic thing is there was client had paid a cheque in the first month of the three months I didn't go to the post office for, that was in days when cheques were paid and it was $8,000, would have been very, very, very helpful at the time, but I just couldn't face the post office. And when I did finally get there, my post office box was stuffed full and then there was a Coles bag full of envelopes. Apart from the $8,000 cheque, there wasn't any good news.

Shane: So, Ross, thank you for your honesty and sharing. It's obviously had a significant impact on you and many others. It's great you’ve got a couple of mates, but there's lots of support available, you said in the beginning, but I'm sure it's extremely tough. Did that mental health challenges only come about post the injury?

Ross: No, I'd had that... I was pretty badly bullied in years 7 and 8, the first couple of years of high school. Everyone else around me became tall, thin and smart. I was short, fat and dumb. That was my internal dialogue. And that ran with me for a long, long time. If I was in a networking function, for example, I would be overwhelmed.

I'd go, oh, there's all these tall people around. They're all smart, they're all looking at me going, who's this loser in the corner? So I'd go, I'd leave. Now, it was my own message, not everyone else's, it was just my own message. So, I reckon my first recollection of being really depressed was at 21, been a long time.

Shane: At which, you know. You said you're 59, going back 40-odd years ago. Probably wasn't well known or recognised or supported or talked about.

Ross: No, no. And I'd moved away from home, I'd moved to the Gold Coast. I was homesick and money was tight. So, my trigger's always been financial.

Shane: Yeah, right.

Ross: So, it's always been a trigger. So, if money was tight, money was really, I felt like I wasn't going to cope. I would just retract into my shell.

Shane: That's a good segue for what we see in retirement. So, you've talked about some things you would have done differently, and we all have times we should have done things differently. It's what lessons we learned. But people working hard and getting to retirement and then not having the money to fund their retirement.

But if we look at the future, and you've already talked about your wife and yourself have got this trust set up and you've got share portfolio and your wife's still working and so on, when you're thinking about the next 20, 30, 40 years of life, what's your thoughts about how that will look from a financial viewpoint?

Ross: For a start, Shane, I hope it's not 40, because that'll put me to 100. I'm not really interested in a letter from the king, and I reckon by 100 I'd be completely overdone. Look, dad's 86, nearly 87. My wife's family, her mother's side, and the grandmothers have all lived it well into their 90s. So, she's probably more the one who's going to last longer than me.

What does the future look like? We're quite comfortable in where we'll end up. There's the old saying, don't worry about what you can't control. We're looking after what we can, trying to put aside money that we can, as much as we possibly can, into the right things, whether it be shares at the moment. So, I want to make sure we're protected for that. So, we'll either park it in cash or whatever and making sure that we're not stupid in our spending.

Things that I've started to do in the last three or four months regularly is do a digital detox. It's easy to just go and sign up for another Stan or Paramount, Disney Plus or Prime or Netflix and Spotify, and all of a sudden you go, I've got seven streaming services. I'm paying more than I'd pay for Foxtel. Which ones am I using? So count that. And all of a sudden you go, there's $800 a year going back into the account. Do I use 150 gig of data on my phone?

About 10. For 10 gig of data, I can pay $25 a month, not $80. There's another $800. When you're earning good money, at one stage in coaching, I was earning really good money, like, great money. My rate was about four grand a day. So it's not an insignificant amount of money. So when you go, it's $800 for the year. Don't worry about it. It's not a problem. $800 a year when you're down, when your income, combined income, is about $150, that's a lot.

Shane: Absolutely.

Ross: So if you've got that happening in two or three or four different realms, pulling that into control, that's 5% back in your pocket. That's significant. So that 5% now goes into the share portfolio or it's what we put into our super again. So, it's that sort of stuff that I guess I'm looking at those things now.

Shane: Yeah. To close, I was going to ask you for any tips you might have for our listeners, but I think that one's a great one. Not just for retirees, but it is one that we do talk to retirees about is people quite often ask the question, how much do I need to live? How much super do I need? How much I need to retire? And the first question, I say, is, what's your living expenses? And so there's what your current living expenses are and then what you think you might need.

And it's a really good tip. I think I need to go home and review my digital footprint that you talked about. Ross, I've enjoyed our chat. I really do want to reiterate our thanks for your honesty and sharing your story and really wish you and your wife, who sounds like she's a fantastic support for you, all the best for the future and hope things work out really well and keep strong.

Ross: Thanks Shane. Really appreciate your time. Cheers.

Shane: As mentioned, this podcast has covered some topics some listeners may have found confronting. If you or someone you know needs support, please reach out to Lifeline on 13 11 14.

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

AustralianSuper has the privilege of 3.3 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 Kulwant Jassal, a member of AustralianSuper. Welcome, Kulwant and thanks for joining us.

Kulwant: Thank you very much.

Shane: So, Kulwant, to kick off, can you give us a little bit of a story about yourself?

Kulwant: I came to Australia in May 1992, and then I didn't get a job for a year. And then I got my job at a company called Toyota, and I worked there for 23 years. And 2017, I joined another company, Yarra Trams. So I was there for another three years, and after that I got retirement. And after that I'm just enjoying my retired life for the last three years.

Shane: You were just telling us about how enjoyable retirement is so we'll come back to that. So, you migrated to Australia in 1992. Where did you migrate from?

Kulwant: I came from India, Delhi.

Shane: And what was the reason for moving to Australia if you don't mind sharing?

Kulwant: It was my wish to, you know, settle overseas. I had a daughter, three years old. I got one son as well so he was born in 1994 and during that time I was working in ships as a marine engineer. I was thinking, you know, I'd like to settle abroad. Yeah. And I heard a lot about Melbourne so I wished to come to Melbourne.

Shane: Yeah, well, it's a great city to be in, but I'm probably a little bit biased. So, moving countries with a wife and a young child at three years old without a job, that must have been fairly daunting for you.

Kulwant: It was little bit, but I had confidence. I didn't face any problem.

Shane: Yeah, excellent.

Kulwant: I just got myself getting used to this place. I just used to go on the trams and explore the city.

Shane: So you said you were in Melbourne for a year before you were able to get some work, was that right?

Kulwant: Yeah, I was in Melbourne since then and I got a job here. I didn't move to any other city.

Shane: So the job at Toyota you got, you talked about being an engineer and...

Kulwant: That's right. It was similar to what I used to do on the ships. I got a job as a maintenance fitter, which was quite related to my previous experience. I was doing a little bit different roles like maintenance fitter and looking after the boilers and other machineries. And then from team member, I got promoted to team leader and then got a job as a group leader there. Yearly I got a promotion.

Shane: Excellent. So, you come to Australia, you start employment with Toyota, you've got a new life, you've settled in, massive changes, young children. When did you start to hear about superannuation?

Kulwant: Before I had my superannuation with the Toyota Super. And that time I was not aware of AustralianSuper, and that time I never thought of other supers. Because you're new in the job. So, I think 2014, I just thought of changing over to AustralianSuper because one of my friend was there and he actually advised me to change to super. So what I did, I transferred partial of the amount to the AustralianSuper, so when I got retired, so that time I transferred all of the amount to AustralianSuper.

Shane: So when you started at Toyota, they sit you down and they say, ‘Kulwant, this is how much money we're going to pay you’. That would have been the first time you would have heard about superannuation?

Kulwant: That's right, yeah.

Shane: And so how was it explained to you? What was the sort of questions you had in relation to super?

Kulwant: Yeah, they said that a part of your salary will go towards your superannuation, which is money getting accumulated for your retirement in the longer term, like, it will give you the returns and after retirement, so that would be your source of income.

Shane: And what was your impression of that concept when you first heard about it?

Kulwant: It was really good and I really liked that.

Shane: Yeah, excellent. And so throughout that work life of 23 years and then followed with Yarra Trams, when did you start to think about being more proactive with your superannuation?

Kulwant: Up to the age of 45, the contribution were just going, whatever, they were deducted. But after that, I started thinking that maybe I should start saving more as I'm getting close to the retirement. So, I started putting extra contribution into my super. So whatever extra money I had, I used to put that in the super. And what was the maximum cap was, so I used to go right up to the cap.

Shane: Right. So, that was from 45. So how old were you when you arrived in Australia?

Kulwant: 1954 was my birth, so '92.

Shane: 38. Yeah. Okay. So, it wasn't that long after you arrived and you still got a young family, so by then you would have had a ten year old and a seven year old, and you started that. So, that's really proactive. So, well done. And was your wife working?

Kulwant: No.

Shane: No, and so she didn't have superannuation.

Kulwant: She used to work like a part time, I'll say, like 8 or 10 hours a week. So I used to normally contribute for her and employer used to put a little bit of money as well.

Shane: Yeah. Okay. So, clearly you've done really well to understand the concept of super and being really proactive. So, well done.

Kulwant: Thank you.

Shane: Did you have a view around when you wanted to retire? Because you talked about how you, I think, were made redundant from Toyota and then you started working at Yarra Trams. Did you have a view around, I wanted to retire at X age? And then did that eventuate or were you sort of forced to retire on someone else's terms?

Kulwant: No, that was my own decision to retire. I think I was 67. I got retired. I decided that I don't want to work anymore. Even company was asking me to work more. But I said, I think it's a time for me to stop now. I thought that I had enough now. It's time to give it a little bit of rest now and start enjoying my life as a retired person.

Shane: And so obviously there's two elements of when people choose to retire, which not everyone has that option, sometimes it's forced on them. So you've had the option of retiring. So, you talked about, you know, I've done my bit, I don't want to work anymore. What about the financial side? Did you sit down and work out whether you could afford to retire, how much you needed to live off, and also did you seek help on that as well?

Kulwant: Yeah, because I was very confident the money I got in super. I got enough money in the super. Also after that, I started getting like a part pension from the government as well. And I think that money was enough for me, and I'm still happy with that. Before retirement, I started planning for that where I should, like, move my money a little bit here and there so I can get the pension and income from the super as well. So I moved my money from super to pension account.

Kulwant: Yeah. To maximise my, like, pension, I transfer some of the money from my account to my wife's super account.

Shane: Yeah. Okay.

Kulwant: So in that case, like, if you have too much money in the super, then you don't get much money from the government as well.

Shane: Right. And because she wouldn't have had a lot of super from not working.

Kulwant: So my friend advised me to transfer some of money into her super. Because your super is getting counted as an asset.

Shane: For some people, and rightly so, that's fairly daunting. I've got to move my super. I've got to set up a pension account. I've then got to contact the government. I've got to apply for Centrelink. How did you find all that process? And it sounds like you did most of it yourself, is that right?

Kulwant: Yeah.

Shane: Yeah, how did you find all those processes and getting it all set up?

Kulwant: It was all right, yeah. I didn't have much problem. Yeah. I just kept on communicating with AustralianSuper and they helped me a lot in setting up everything.

Shane: And what about the Age Pension? How did that process go, applying for that with the government?

Kulwant: Yeah, I applied online because my friend, who was already getting pensions, he helped me in setting up that process.

Shane: And so you set up the pension account with AustralianSuper. You said you took the minimum drawdown of 4%. And you've got your Age Pension coming from the government. And your wife, is she drawing an income from her super? She rolled that over or not yet?

Kulwant: She's not retired.

Shane: Okay, all right.

Kulwant: She got another two years to retire.

Shane: Excellent. So since you've set up the income account with AustralianSuper, have you kept the drawdown amount the same amount?

Kulwant: Same amount so far, I'm just keeping the same.

Shane: And you're monitoring that to say, are you making an active decision not to change it?

Kulwant: Not at this stage. Because once my wife is at a retirement age and that time, I think because my super is enough, so I might stop, I will stop getting my pension. So in that case, I'll have to increase my percentage of pension.

Shane: So you sound very in control of your processes. So, very calm about it, which is fantastic. Let's talk a bit about retirement. So, you've been retired three years now. What do you do with yourself? I think you mentioned earlier, you probably feel like you're busier than what you are when you worked.

Kulwant: Yeah. So, what happened after that, my daughter got busy. She got married and she got two children at the moment. So I'm just busy with them, you know, because she works from home. And normally then me and my wife, we both look after the kids.

Shane: How old are the kids?

Kulwant: One is two and a half years, and there is a boy and the girl is about nine months.

Shane: Wow. I can see why you say you're busier now than what you were when you're working.

Kulwant: We got so much used to that, you know, like, if they're not there for two days and we thought, there's nothing else to do for us.

Shane: Yeah, it's very quiet. Listeners can't see the big smile on Kulwant's face, so it's clear you get a lot of enjoyment from your grandchildren. What are some other things? If you've got any time when you're not helping out?

Kulwant: I do normally do gardening. Yeah. And then we socialise like we got our seniors group, so we just gather in a coffee shop or somewhere.

Shane: Excellent.

Kulwant: We have a cup of coffee every week.

Shane: What about travel? Is there any travel?

Kulwant: Yeah, we do travel as well. Last year, March, we went to Turkey, we got about twelve days. Twelve days tour. We were about five, six families and they're all retired.

Shane: Fantastic.

Kulwant: So we had a really good time. We still have plans to travel. We'll be still travelling, you know? I normally go to my country, India. I've just been there about three months ago.

Shane: Yeah. Excellent. Thinking about the future and funding your retirement. You're clearly on top of those sort of things. But when you think back at the decisions you've made and you've made some pretty big decisions, are there any things relating to superannuation retirement that you think are worth sharing with our listeners, I guess some words of wisdom that people might be interested in hearing from your own experience?

Kulwant: I'll just advise them that, you know, it's good to save for your future. Whatever money you can contribute extra in your saving to the super, that will always help you, you know. That's the main thing.

Shane: Excellent. I think there's some good guidance for our listeners. Kulwant, really nice to meet you, but I think really impressive that you've made a significant shift in moving your family here and your understanding of the superannuation system and what it means for your retirement. You've grasped really well. So I think you're a really good example for people, showing that little bit of interest and what impact it can have when it really matters. So, well done.

Kulwant: Thank you.

Shane: Thank you for joining us today.

Kulwant: Thank you.

Shane: Thank you for joining us today. If you're an AustralianSuper member and would like to join us and 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 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'll 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 people.

Quite often, AustralianSuper members will ask questions that are found through various channels. And mostly those questions are relevant for many members, and so we thought it'd be great if we could share some of those questions and answers through the podcast.

To help answer these questions, I'll invite a guest expert to join me on the podcast. And today I'm very happy to be joined by Richard Land, Head of Insurance Product at AustralianSuper. Welcome Richard, and thanks for joining us.

Richard: Thanks very much, Shane, pleased to be here.

Shane: So, what isn't commonly known by many people, Richard, is the ability to access insurance cover through superannuation. That's what we're here to talk about today. So, what are the types of insurance that someone can take out through super?

Richard: Well, there are three types, Shane, and when you join a super fund, you usually receive a basic level of insurance cover, also referred as default cover. So, the three types are death cover, and that's a lump sum paying to your beneficiary in the event of death. It may also be available as a terminal illness payment.

Income protection can help if you become ill or injured and can't work by providing monthly payments to support you while you're not earning your regular salary and total and permanent disablement cover can provide a lump sum payment if you become totally and permanently disabled and can't work anymore. This includes helping pay for rehabilitation, any debts you have, and the future cost of living.

Shane: Okay, thanks, Richard. So, three types of cover that are available through superannuation. Sometimes people wonder, do they really need insurance cover? What do they need to consider when making the decision on what cover they might need?

Richard: Well, it's really a two-part decision. The first part is, as you say, what cover you need. So, that depends very much on your own circumstances. AustralianSuper has an online insurance calculator at australiansuper.com/insurancecalculator. You don't have to enter your name or any identifying details, but it will ask you about your liabilities, your cost of living and your personal circumstances, your spouse's salary, the number and ages of your kids.

So, once you enter that, it will calculate an insurance cover estimate based on your needs. But that's only the first part of the decision. The second part of the decision is the cost. Remember that the costs of insurance in your super, in other words, the premiums are deducted from your super account. So, every dollar paid for insurance covered means less in your super balance for retirement.

Ultimately, insurance and super can give peace of mind that you'll have the money when you need it most. Most people need insurance and being able to provide a future income. So, just like your car or your home, it is worthwhile protecting it.

Shane: Thanks, Richard. So you've talked about the calculator a little bit. The other element that members have too is they can contact AustralianSuper, speak to our contact centre. But importantly, you can actually receive financial advice from the phone advice team on insurance cover and what's required. But also speaking to your own financial adviser can be very important when you're talking about insurance cover.

Richard: That's right.

Shane: So you've touched on how to work out the cover through the calculator. But when making a decision, what are some things that someone might consider relating to the cover they need? So things like debt, for example?

Richard: Well, it broadly depends on imagining a situation when an adverse event has happened. Say you're injured or you're ill and you can't work for a temporary period of time. So, think about how much savings, how much assets you've got, and think about what you might need to continue.

If you've got kids, think about the costs of their education, for example, if you've got a mortgage, think about the mortgage repayments or the amount that you might need on death to discharge that mortgage, and whether you've already got some insurance with your mortgage provider. Sometimes the banks require you to have insurance to take out the loan. So, all those things come into the mix.

Shane: So, you talked about that lump sum piece with the bit of death and TPD, and then you've obviously got income protection, which is the payment of an income, as the name suggests.

Richard: That's right, yeah.

Shane: And so are there different considerations when you're thinking about the income cover that you require or is it very similar?

Richard: It's just really imagining the scenario. So, I find and the fund's philosophy is that income protection provides cover for what you're missing out on if you become disabled. The TPD in my mind is something to make alterations if you have a disablement event which means you need alterations to your house, alteration to your lifestyle, bit of funding to change the job that you might be working in and to reskill to go on to another job if there's alternative work that you can do.

Shane: So, TPD is paid as a lump sum and the income protection is, as it suggests, an ongoing income stream.

Richard: And TPD is, as it says, you need to be permanently disabled whereas income protection you can be temporarily disabled, unable to work say for a period of six months to 18 months for example and you will receive income payments while you're disabled and until you recover.

Shane: And the other important factor around that is that your super stays intact.

Richard: That's right.

Shane: While you're on the income protection, so you're still earning growth on your superannuation and still acting for its primary purpose. So, Richard, at the beginning, when you were talking about the types of cover, you talked about automatic cover that's eligible for members. So how does the basic cover work?

Richard: Yeah, so basically, AustralianSuper automatically provides eligible members with the basic death, TPD and income protection cover with their super account. It's age-based cover, which really provides a minimum amount of cover for your changing needs as you get older. For example, it's zero before age 25. Then it sort of jumps up to about $180,000 of death cover in the early 30s, which are typically the mortgage years.

And as insurance gets more expensive as you get older, the amount of basic cover, as you refer to it, or default cover tails off as well. So that's how it's set up. AustralianSuper has a principle that insurance premiums for basic cover should not exceed 1% of salary over the member's lifetime in super.

So, remember, that's in relation to the superannuation guarantee is 11%. So you want most of your SG going towards your retirement account. So we have a philosophy that less than 1% should go to insurance premiums. And if you think about your retirement balance when you do retire, we have a benchmark that the insurance premiums should only erode your retirement account by less than 10% of what it would have been if you hadn't been paying insurance premiums.

So, we see that the retirement savings is really the key aspect of superannuation, but insurance is a valuable provider of peace of mind and real financial support when you do need it if you are in the unfortunate situation of needing to claim it.

In relation to basic cover, you only get the basic cover if you're 25 or older and your super balance reaches $6,000 and you've received an employer super contribution after your super balance first reaches $6,000 as I mentioned, and the cost of your basic cover is based on your age and your individual work rating.

The cost is deducted monthly from your super account. Your cover would stop if a contribution isn't made into your super account for 16 months, and many of these conditions relate to government legislation to ensure that super accounts aren't eroded too much by the payment of premiums.

Shane: Great. And in examples like you've just referenced, the fund would be in communication with the member to advise we may be ceasing cover or why you haven't received a contribution, and so on. So, it doesn't just switch off.

Richard: Exactly. In fact, if you haven't received a contribution for the 16 months, you will actually receive three letters of advice that your cover is going to cease before it actually does and you have the opportunity to extend that cover and make sure that it continues. You just have to reply and say, no, I want the cover to continue.

Shane: So, like we say in multiple of these podcasts, it's really important that members are keeping their details up to date with their super fund, like they would with their bank or others, because there's always important communication coming out.

So, Richard, you just referred in that description of basic cover to work ratings. So, obviously people have different occupations and you've talked about age being a factor of the cost of premiums. Can you talk us through what work ratings are and how it impacts someone's cover and cost?

Richard: Yeah. So, a work rating classifies the usual activities of your job into one of three ratings. There's blue collar, white collar or professional. And as you said, the individual work rating is one of the factors which determines how much you pay for your insurance cover. Quite simply, blue collar is the most expensive and professional is cheaper.

When you join AustralianSuper and have insurance cover, you pay what it costs to provide you with a cover based on your work rating. So, members who don't answer the work rating questions when joining the fund receive a blue collar work rating. You could pay less for your insurance if you're eligible for a white collar or professional work rating and your application to change your individual work rating is accepted.

So, it's really important to check your individual work rating via the AustralianSuper app or member portal under insurance. And then use the australiansuper.com/workratingtool to see if you may be eligible for a different work rating and cheaper premiums by answering just a few questions.

Shane: Great. Thanks, Richard. I think even just to dig deeper, people might be thinking, why is blue collar more expensive than professional? But it's a bit like any sort of insurance, there's deemed to be more risk for someone in a blue collar occupation of injury or other things versus to someone who's working in an office. So, that's the sort of basic terms.

Richard: That's right.

Shane: Okay, last question, Richard, is obviously insurance, when we talk about death, TPD and income protection is people may be aware it's available within super or you can purchase it yourself directly outside of super.

Richard: That's right, yes.

Shane: What are the benefits of someone taking out insurance through their super?

Richard: So, with AustralianSuper, we use our size and scale to negotiate discounted bulk or group insurance rates for members of AustralianSuper. We're a profit-for-member fund, so members only pay what it costs us to administer and provide their insurance. And the fund claims a tax deduction on the cost of insurance and passes the benefit on to members.

But Shane, it still can be worth shopping around with direct insurance as rates may vary depending on age and work rating. And some people also prefer to have an individual policy directly with the insurer rather than the fund having a policy to cover all its members. The other benefit is that premiums, in other words, the cost of your cover, are paid directly from your super balance, and that means you don't have to pay for insurance from your take-home pay.

Shane: Great. Thanks, Richard. There's clearly a lot of things to take into consideration when you're thinking about your retirement, but importantly, your life throughout that journey to retirement. And insurance is a big part of that, the same way we insure our house or our car. And you've given us a really good explanation.

Like anything, we do our best to put in place some default mechanisms for our members. And you've talked insurance. But for most members, they'll need to look at their own considerations around the cover that they need. And you made a really good point then around life change. You have children, you sell houses, you buy houses, whatever it may be, so your needs can alter.

So, just to re-emphasize to those listening, take into consideration your own needs. Look at the AustralianSuper website or your own super fund website. There'll be tools available or seek financial advice. Richard, thanks for joining us today on a very important topic.

Richard: Thanks very much. 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.

AustralianSuper has the privilege of 3.3 million members trusting us with their retirement savings. Each of those members has their own story, and today we're going to hear two of those stories. I have the pleasure of being joined by Carolyn and Jeff Harris, members of Australian super. Welcome, Carolyn and Jeff. And thanks for joining me today.

Carolyn: You're very welcome.

Shane: So, you are officially our first couple on the podcast, so no pressure, but it is something we've been trying to do for a while because most financial decisions and retirement decisions are made as a couple. So it's awesome to have you both here. So, I might start with you, Carolyn, because Jeff told me that you're going to be the main spokesperson, and, Carolyn, if you could just give us a little bit of history about yourself.

Carolyn: So, I'm 68, which is a wonderful age to be at, and I have been retired for nearly ten years, which is fantastic. I started off my working career as a 16-year-old, working for Hickory Dow in Burwood. Then I went to work for the Gas and Fuel. And then I had my son, stayed home as a stay-at-home mom, which I loved. Then I went back and studied, and I became a tax agent and a teacher at TAFE, teaching accounting and tax. And then I got divorced.

And I thought, oh, I better get myself a better career, rather than the casual teaching a few days. And was a tax agent three days a week. And it was pretty hard. You have to have six-minute blocks where you charge out. And I said no. Then GST came along and I applied for a GST job with the tax office and I worked there for 14 years before they made me redundant. So that's my career. I've enjoyed super.

I've always been focused on super because my mum, she was a postal clerk back in 1930, and they had super then.

Shane: Right.

Carolyn: So my mum had always told us girls, my sister and myself, that you have to look after yourself, and if you can have super, go for it.

Shane: Jeff, can you tell me a bit about yourself?

Jeff: Yes, Shane, no problems. 8th of January 1968, I commenced my banking and finance career. And that very day, you started work at that time, one of the forms that was placed under your nose was joining a superannuation fund. So as a youngster, I was 16 years old. So right from the start, I always knew about superannuation. The banking and finance career, I had quite a lengthy one.

I ended up an internal auditor, spent 30 years, eight months and 21 days, approximately, and I was made redundant. The work was outsourced to the big four accounting firms at the time. So, unbeknownst to me what I was going to do next, I was at the stage of life where I still needed to work. I'd done a bit of contract work. I was involved in the Royal Commission into the Longford gas explosion. That gave me a bit of work, but I needed something more.

So, similar to Carolyn. I picked up the paper one day and GST was coming along. It was on the beam, everyone was talking about it. And I applied for a position in the public service with the Australian Taxation Office. Day two, I met Carolyn, and I was very lucky. Yes. I think the train trip home, Carolyn rewarded me by providing me a cheese sandwich.

Shane: Wow, treated to a cheese sandwich!

Jeff: Anyway, I was similar. I had 14 years, and we both got to mid-executive range levels in the ATO. I am 72 years of age. So I was looking and thinking about retirement. And at that stage, I went into, I investigated the transition to retirement. So that was one of the first steps I took before I was actually made redundant also in the ATO.

Shane: Right. So, am I right to say, GST brought you two together?

Carolyn: Yes.

Shane: So who says good things don't come from tax?

Carolyn: We love tax.

Shane: Well, clearly, clearly. So it's brought you two together. So, thank you both for an awesome summary. There's so many different things there we'll come back to. But I do want to go back to you, Carolyn, and talk about obviously your mum enshrined the understanding of super. But I understand when you're at the Gas and Fuel that there might have been different arrangements for men and women.

Carolyn: Absolutely. So, for a female, when you joined the Gas and Fuel, you're given the option, you could put in fifty cents a week or a dollar a week into your super and that would be matched. So if you put in fifty cents, the boss would put in fifty cents. And the man that used to work next to me, he had the opportunity to put in six and a half percent of his salary and the boss would put in 11%.

And I thought that's not fair. I want some of that. But being a female we weren't allowed to have that privilege of having a better super. So another lady in the office and myself, we hustled and we ended up, every woman in the Gas and Fuel then was offered the same opportunity.

The reason they said no was because they said women just get married and have babies and leave and they don't need super long term. But one of the things that I did from that was that when I did leave the Gas and Fuel, I had an amazing bundle of money and I should have kept it in super and I didn't. I cashed it in and paid off my home which was a good thing there. But then I had to start off again from scratch.

Shane: Which we hear a lot. We hear that is so common. My own father did that when he was made redundant in the late 80s as well. So it is very common at the time you making the decisions that are right for your family and back in those days you could take your super out.

Carolyn: Exactly, it's not easily accessible these days, of course. In a way, it probably made life a little bit easier if you didn't have a mortgage to pay but then, unfortunately what you do then is if you've got a dollar, you spend the dollar, you're not forced to save it. Yeah. So, it's a bit of a devil when you do that.

Shane: So that initiative that you and your colleague talked to pressure management, that is amazing fortitude and also strength to do that. We still have issues at the moment, particularly with females retiring with less superannuation, the gender pay gap and broken work life due to caring and other things. So back when you did that, that's amazing. It's something I hope you feel very proud of.

Carolyn: Oh, absolutely. I think, as I said, because my mom had been so forceful in my sister and me saying, you've got to look after yourselves because, you know, mum had, well, she'd had a divorce, and she was sort of left out to hang and dry, as they say. So there was an opportunity to take, and I always say, take opportunities.

Don't let those sort of things go by. And also, I think it actually shows women that they can do things. The other lady in the office with me, she was a real forerunner of a lot of women's issues. We weren't allowed to wear slacks. Can you believe that?

This is back in the early 1970s. So that lady and I decided that we would wear slacks because we weren't allowed to wear slacks. So things were really different back in those days.  It's not long ago.

Shane: It seems unimaginable that that would be a challenge, but clearly it was. And just back to the conversation you had about the 50 cents on a dollar versus the 11%, how receptive were they initially?

Carolyn: I don't think anyone had actually ever challenged them. I don't think it was a deliberate intention to discriminate against females. But it was just that in those days, if a woman got married, sometimes in the public service, they actually had to leave. They had to leave, and so things were just different. It wasn't long before we were allowed to have our 6%. So that was good.

Shane: Okay, excellent. Well done. Now, Jeff, you mentioned when you started at the bank you had a super fund or retirement scheme and so at a young age, 16, how did you think about that? Were you thinking, oh, it'd be great to get that in my pocket or you just sort of forgot about it because it wasn't there?

Jeff: It was probably Shane, I think most times it was probably forgotten about, especially when you were very young. It was only if you turned the clock forward 10 or 15 years and you might have been dealing with people who were perhaps older than you were. The conversation would often come around and regards what their fund was doing, whether it was performing well.

So, everyone got a statement annually and would start to talk about it, compare what they had and that would vary obviously, depending on terms of employment, how long people have worked in the job, et cetera. But it was always something that was there. And I think through both careers, as I've outlined, superannuation played an important part because it was the financial backing that I had that was going to get me where I want. I've always had goals, and I set myself goals.

And even at the age of 72, I still set myself goals. I never say I just want to sit down and vegetate. I intend to live life the best I can and to its fullest. So it's important I look at it, and superannuation still is very important to me today. I think Carolyn and myself are very similar in that we're lucky that having the stint with the public service, obviously, we have defined benefits, super. And also we do have the private super as well.

As far as income streams go, we have the benefit of receiving sort of from both ways and we've thrown ours together and it gives us a comfortable lifestyle, so it's very important. And we find ourselves talking to our younger friends, our family as well. We constantly talk about the importance of superannuation, how they should be doing things, whether it's salary sacrificing or whatever.

It's a conversation piece we have. And I think AustralianSuper recently held a session at Jeff Shed World Trade Centre and we brought along Carolyn's brother, who had recently retired. And he probably...

Carolyn: He knew nothing.

Jeff: No, well, he knew what we'd told him and probably that wasn't gospel to him.

Carolyn: He didn't trust us.

Shane: You got him there, that's the first thing?

Jeff: We got him there and it was good to sit back because we feel we have a good knowledge of superannuation and it was good for him to sit back and hear what his future is. So, he's quite comfortable with it. But I often say, don't work too long, because we have that other thing we need to have in life, a lot of people think you need money, but you also need health.

All the money in the world won't help you if you don't have reasonable health. So the important thing is, as we age, to pick a point where you can stop work and start a new life, because that's what you do. The minute you stop work, you start a new life.

Carolyn: I think that people don't realise that super is there to be enjoyed.

Shane: Yeah, 100%.

Carolyn: I think some people actually think, "Oh, I got a bucket of money, oh, I better keep it." But it's actually there to give you a wonderful lifestyle, because when you're busy working, accumulating that super, you can't actually do what you really want to do all the time, because you have commitments, you have children, you have mortgages, you have a whole lot of stuff.

And so you can't actually fulfil the dreams that you've got. And so that superannuation can actually give you the opportunity to fulfil some of those dreams and aspirations, whether that be travel or whatever it be. As Jeff and I, we always talk about, the super gives you opportunities, if you can look at it as a decent asset, like most of us have a house. And the next best thing is really your superannuation, because, as we all know, it came in for everyone in the 1990s.

But people, they just don't seem interested in it. And yet it can do such a wonderful thing for you if you look at it in all the different opportunities. Like Jeff said, he did transition to retirement. That was a great little thing. I had basically no super when I started at the tax office and I went to a financial adviser in the city and I said to that person, how am I going to get super? How am I going to get enough money?

Because obviously, being at the tax office such a short time, you don't build up enough money to retire. Because I had a goal of retiring at about 64. And he said, okay, if you salary sacrifice this amount of money every fortnight, and in this amount of time, you will have $150,000. I go, oh, yeah right. Yeah right. And I watched it, and it was incredible. It was just building up and building up and building up.

And that was one of the best things I ever did, actually, was to go and get some financial advice. Even though we've played in super and we've both accountants and we're all sorts of stuff, we still went and got advice to see the best way forward. For me, particularly because Jeff was different. He had a different super. And so that was a really good thing I did, and I got my goal, and it was amazing. So I was thrilled when I got there.

Shane: I've just sat here for the last five minutes listening to you both and what you have just demonstrated and talked about your experience and the influence on others is exactly the purpose of why super is here, but also the importance of the engagement piece. And so you both had that, I guess, whether it be fortune or thoughts coming from others. So your mother told you about super.

You working, Jeff, in the banking environment helped. And so that first step of understanding the engagement, and you made the point, Carolyn, about a lot of people don't take an interest, and a lot of it is people don't know. They think, oh, it gets deducted every pay. And I don't actually see it.

So it's not like an active investment. And we tell people, if that was your salary, you'd know where your money was. And where it's invested, and even your comment that you made about spending money in retirement. So it's so important. We talk about the working life is the saving part, and the retirement bit is about taking the pay.

So your salary stops from your employer, and then you start taking the pay and you got to spend it. It's your money. I don't think we could have said it any better than the way the two of you have just said it. So, well done and thank you. So, Jeff, when you finished up at the bank after 30 years, eight months and 21 days, approximately, you obviously kept your super in intact and then invested it outside the super.

Jeff: Yes, Shane. I rolled it over at the time, and it remains, it still remains there today, actually. I think one thing if I can just pick up on something you just mentioned, Shane too, I think superannuation, it's a thing that doesn't just stop when you stop work, it's a product that's been built that there's so many uses for it because as we age and we all age we have the people who go through the opportunities of being able to downsize their homes and there's government allowances there, benefits there that you can place money into super, that have limits on it, but you can do that. You also have the opportunity if you wish to go back and do a little bit of work, you can earn some income.

Shane: Carolyn waved at everyone there.

Jeff: Which is outside and Carolyn and I have dipped our toe in that roughly twelve months ago, we went back and...

Carolyn: We're mail sorters.

Jeff:  We're mail sorters for Australia Post.

Carolyn: Dandenong South Post Office Mail Centre. We love it.

Jeff: And it's an opportunity, we're working in a really diverse workforce. It's a great work environment. Carolyn and I have a bit of a contest. We're on barcode.

Carolyn: Who's going to do the most sorting!

Jeff: Barcode sorters, they're called, and the barcode sorters put through 33,000 letters an hour.

Shane: Really?

Jeff: So it's a matter of whether you can keep the machine running smoothly and without stopping.

Carolyn: And when we started last year, because we are the oldest there, we start at 7:00am. And you got to get there ten minutes early and do your warm up exercises. And then you get to your workstations and the bell doesn't ring. But it's not like that. Well, we're casuals. We went on for the Christmas mail rush, so it was either that or working for Dan Murphy. We thought we would drink all of our pay, so we thought we'd better...

Shane: You’d want some cash; you don't want to get paid in goods.

Carolyn: So we thought we'd better go and work for Australia Post. And we had a friend that actually worked in the postal service and we said, would they really want us oldies? He said, you're fit and healthy. He said, they will love you, too. So we just worked for the four weeks before Christmas, so we thought we'd finished. That was it, done and dusted. And they said, oh, no, you can come back next year, Jeff and I said, "We're retired, we don't need to come back and work."

"But you're pretty good." And I go, "Oh, okay." And then they used to say to Jeff in the afternoon, do you go home and sleep? It was from, like, 7:00am to midday. It's just a five-hour shift, so we're going from being executives in a public service to working in a factory sorting mail. It was incredible. We loved it.

There's machines going around and parcels up here, and it's noisy. And it was just something that we'd never, ever been involved in. And that was where we got into AustralianSuper, because Australia Post uses AustralianSuper. Some people used to say, why are you two working?

I said, "We're retired, but we thought we would just do a little bit of work to help the workforce." Oh, so you know a bit about super, do you?

Shane: Yeah, look out.

Carolyn: So, everybody started asking, how much do you need to retire? We go, well, there's no answer to that one. And so it was really good, wasn't it, Jeff, that we were able to say to people, well, think about, what are you earning now? Is that enough? You're not going to pay tax once you get this age, and do you want to go and buy a new car? Do you want to go on lots of trips? There's nothing, one figure does not fit everyone.

Are you single? Are you a couple? Have you got children at home? You're paying university? So, go on a website. There might be some tools that you can have a look at. So we actually found ourselves having a lot of fun, but also able to share some of our knowledge. Wasn't it?

Shane: Ambassadors.

Carolyn: Mentoring. Oh, well, we love it. We just love life. We just can't get enough.

Shane: We're picking that up. With the Australia Post work, what was the motivator to do that? Was it monetary? Was it activity? Was it a bit of both?

Jeff: No. I was reading a newspaper article that said they couldn't get workers, so I think of it, because we'd been out of the workforce for a number of years, it was the opportunity to go back and have a look at what the workplace was like today, almost a decade on.

Carolyn: So, it's really strange, isn't it, Jeff, that we, when some of our friends go, "You're doing what?" We might do two days a fortnight, do you reckon? Just to keep our hand in. And we call it fun. It probably isn't so much fun if you have to do it five days a week and you're going to stay there for ten years, that wouldn't be much fun. It's a great place. It's safe, it's secure.

Shane: Well done. Well, as you said, there's more than you're getting out of it than the monetary, it's the engagement with others and the energy that you get. So, starting to talk about the decision to retire, so how old were you, Jeff, when you retired?

Jeff: 64, I'll say 64.

Shane: And, Carolyn, you?

Carolyn: I was 59.

Shane: So you both retired about the same time?

Jeff: There was some travel planned. We planned some travel to the Kimberley and it was roughly a four week trip. And one day my boss walked up to me and said I was no longer required. I'd been working to complete a task and that task was now completed and I was no longer required. And I thought, well, it's about time I thought about stopping work. I'd worked nonstop since the age of 16, so I'd been lucky there.

And it fitted in with the trip. Carolyn, at that stage, made a decision, she was to continue working because she felt she was a little bit young. Anyway, that was fine. We went off and we received a phone call from a colleague of Carolyn's within about a week of being away and said her area had been, what was the word that was used?

Carolyn: Obliterated.

Jeff: However. Yeah, the area was no longer existent and they were planning to move Carolyn to another role in a different area. And Carolyn sort of thought about it and said, I don't really want to be moved, so can I have the offer Jeff's got? So it was shortly after, it worked out in about four weeks after.

Carolyn: I actually said, "Why should I go to work when you're at home retired?" I'm out of here... So, I retired at 59, which was amazing. The best thing we ever did, though.

Shane: So both of you had plans to work longer if the redundancy package hadn't come along?

Jeff: We felt we had financial needs to probably work a little bit longer. Part of our plan to get to our goals had been we had borrowings, et cetera, so there were some financial needs to continue to service those commitments we'd made. And we just looked at it overall and we undid things, we changed things.

There was some downsizing done in housing and we basically just moved on. We were able to just put together a package that suited us both financially and it worked out quite well. I don't think we ever look back and said it was a wrong decision. So it worked out perfectly, really.

I always say one of my things is the fact that you've worked with people who have been in the organisation from day one. They'll be there at 60 years of age and they'll think about retiring if they've got the opportunity to, 90% of them will have good health. The next decade comes along, you see the people 60 to 70, and you'll have a few ailments in the people you catch up with.

There's no one that seems to get to the 70 to 80 bracket that hasn't been given a number of some description regarding a health issue. And I think it tells me the younger you can think about retiring, I think you take that opportunity to do that so that you can have that life you've been working to put in place, to get out and enjoy the life, because it can stop very quickly for us. And if the health's taken away from us, we're unable to travel, we're unable to do much at all.

Carolyn: And we like to keep busy. So we've done heaps of volunteering work.

Shane: Yeah, tell us a bit about that.

Carolyn: I think we'd only been retired a short time, and we saw in the local newspaper a fundraiser for a young boy, and his name was Oscar, and he had major health issues, he was ten. And the club that we eventually joined, they were trying to raise funds to get a car for the family so that Oscar's wheelchair could be wheeled into the back of the van and securely fastened so Oscar could travel around with the family.

So we donated some money and then the club, it's Lions International, and we met the people there and we really liked them, so we joined and we do a lot of Bunnings barbecues, cooking the sausages, plus a lot of other fundraising work, and we got an immense amount of pleasure out of doing that.

And we've done other volunteer work as well, so that's kept us busy, and it's also opened up a new circle of friends. And so by just putting yourselves out there, sometimes this whole new world has opened up. Sometimes when you can take a step, leap of faith, it comes back many, many times more, in a pleasurable way, for yourselves.

Shane: Yeah, I mean, just hearing the story, your original decision was to make a financial contribution to assist someone in need, and then it's turned into something of fulfilment, both for you and for others and friendships and community and all those...

Carolyn: Yeah, it's been fantastic. Absolutely. And it was the best thing we ever did at the time. And then we've got other friends, friendship groups, and we don't know how we had time to go to work actually.

Shane: We hear that a lot. We hear that a lot. So, outside the charity work, family, Australia Post, tell me more about what you love doing in retirement.

Jeff: Well, the days start, we get up and go to a local aqua centre, where we get in the rehab pool, which is warmed water, and it's a bit like the old Australian barbecue. I'd say the Aussie barbecue, where the men are at one end of the pool, the ladies are at the other end of the pool, and they're talking about each other.

But it's been a group that Carolyn and I are probably the younger ones. And so again, we spend a lot of time talking about superannuation, finance with the group of friends. And it's interesting, when we talk about superannuation, Carolyn and I, I think it's fair to say our personal belief is superannuation is to be spent.

It's not there to be accrued and never spent. But it's interesting some of these people who, as I say, are a lot older than we are in years, are still accruing. So the conversation is, when are you ever going to spend.

Carolyn: So that's the start to our day. So we have our little swim. And at first I went there because I liked the water. And I said to Jeff, come on, you got to come. He goes, no, no, I'm not getting in my bathers. I said, we all feel that way, Jeff. I said, the first time you come, you'll be so self-conscious. But after that, it doesn't matter. You walk down the ramp and you get in the water, and then it's all fun.

And then we all have coffee. We might have lunch with friends there. Then we always walk at 10,000 steps a day at minimal, don't we, Jeff? And we have our Fitbit's on and it tells us when we haven't got up and we need to get up and move a little bit around. We love our little garden at home so we do our gardening and we love cooking so we always cook ourselves up a lovely meal with lots of vegetables and we try and watch a couple of the game shows in the afternoon.

What else do we do? Oh, we look after our families a lot of course, we cook for our families as well. We love having neighbours in for dinner. We have a lot of fun. That's probably our regular day. So then we love to go on trips. So, we get in the car and we drive up to Bendigo for the races or we drive up to Bendigo to see an art show or something or we used to catch the tram into the city a lot and go the Wheeler centre and go to the art galleries and we just do stuff and we never say we're bored, ever.

Shane: Coming to the end, but clearly, you're positive. You're very active and Jeff, you made the point a number of times about the importance of health and spending your money and enjoying your life while you can. Have you thought about the times where you can't maybe do the activities that you want and what you might be required to do in life, or your saving differently?

I know you said you've got the defined benefit fund from the ATO, which probably provides a level of security there. Is there any thought on that?

Jeff: Well, the other thing I think, Shane, that this is not financial advice, but the other thing I think to always remember is with superannuation there is a risk. It's a financial investment. We're reliant upon AustralianSuper to look after the money. But if you choose to spend it on whatever it may be, on travel or new car or cars, new home or whatever, we do have a government pension system which is in place and which can sort of supplement your living and it's designed to at least meet reasonable living.

It might not meet your full needs, but I think that's an important part to keep in mind. I can probably say up front, Carolyn and I aren't eligible for any assistance, but those people, if you plan it, if you wish to plan it that way, you can sort of benefit off both, have your own superannuation plus the government topping up.

Carolyn: I suppose we always talk about finances. We've always, from the time we got together, were upfront about it. I think sometimes problems can happen when people maybe are uncomfortable talking about their finances with people or their partner, even the new partner. And so we've been upfront and we do talk about it if something happens to our health or to each other, what will we do?

So those conversations are important to have, and they should be flexible. Like, things can change. You can't just say, we're going to do this and set it in stone, because situations change. We always promise each other would never put each other in care.

We've made a promise, so that's going to be a challenge in itself if we ever get to the point where we need to look after each other that well. But I think we're always thinking about things like that. You don't just leave something. You have to keep coming back to it, like a will. Like, when you make a will, you shouldn't just make a will and forget about it because things change. And so you need to always come back and revisit it. What are, you know, can I do something like, as Jeff said, we're different.

Jeff actually has his super in Growth still. I'm a Balanced lady. When the GFC hit, Jeff's super went down and then it went up. He goes, see, I told ya. I told ya. It's beaten yours. And so we actually compare each other's super. "You're doing better than me - No, I'm doing better than you." But we don't look at it daily. Of course we don't. But we might look at it probably, reckon we look at it about once a month. We'd look at our balances and see what we're doing.

Like when Covid hit, I was like, oh, should I put it in cash? That's absolutely wrong thing to do. But I had it ready and I thought, nah, don't do that, just leave it. I read and listen to all of the advice about switching between Growth and Balanced and Cash so I just left it in Balanced and it was all fine. It all worked out in the end. It went down and went up, went down and up. And I think that's what people need to look at as well.

If you look at it in a short time frame, you'll often see the variances in quite a dramatic uplift. One thing that's good about super is that we've got ours in pension phase so therefore you're not paying your 15% tax that you pay if it's in accumulation. But if you ever want something out, like if you want to buy a car or you want to go on a massive holiday, you can just ring up AustralianSuper or fill in a form, and within a couple of days, that bucket of money that you wanted out is in your bank account.

It's absolutely brilliant that you can just take out your 5%, or depending on what age you are, the fixed amount, and then if you need more money, you can access it. So it's a pretty flexible tool.

Shane: And again, when it's in retirement and when meet preservation, it is your money. So, yes, the income streams are there to help you with that steady income, to help you live. But at any time, you can access the money. So, people sometimes aren't aware of that. Or as Jeff's alluded to, some of his mates at the pool don't want to do that.

But it is, it's your money and you can access it anytime you like. Now, normally, what I would do at the end of these conversations is ask you for a tip for any of our listeners. I think you provided an amazing insight and tips for our listeners, both on super and retirement, but on life in general. And I've thoroughly enjoyed meeting you both.

And you're actually an inspiration around not only how you've planned for retirement, but just the way you're living now and the values you hold to the community and the enjoyment that I can see in both of you. So, thank you so much for joining us today. I'm sure our listeners will get a lot out of hearing your story. So, Carolyn and Jeff, thank you so much.

Carolyn: You're very welcome.

Jeff: Thank you, Shane.

Shane: Thank you for joining us today. If you're an AustralianSuper member and would like to join us and 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 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'll 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 people.

Quite often, AustralianSuper members will ask questions that are found through various channels. And mostly those questions are relevant for many members, and so therefore we thought it'd be great if we could share some of those questions and answers through the podcast. 

To help answer those questions, I'll invite a guest expert to join me on the podcast, and today, I'm very happy to be joined by Ross Ackland who leads our guidance and advice teams. Welcome Ross, and thanks for joining me on The moments that count.

Ross: Thanks for having me, Shane.

Shane: So Ross, today we're going to cover off help and advice or guidance and advice. There are various terms that people use, but obviously superannuation and retirement can be complex for many people and what isn't known to many people is how their super fund or other institutions can help them through that journey and some decisions. 

So, that's what we're going to cover off today. So to kick off, could you just run us through the types of help and advice services that are available at AustralianSuper and then we'll start talking about the how and the why people might be looking to seek those services.

Ross: Yeah, so the first thing to start with there, Shane, is that we have over 3 million members. But amongst that membership we have quite diverse ages, obviously, we have quite diverse geographical location and ultimately quite diverse financial situations amongst our membership. 

So that means that the type of advice which our respective members are seeking can be quite different depending on the different member. So, what we try to do is deliver it in a way that each of hose members, there's something there which is going to be helpful for them. So, we broadly deliver our guidance and advice proposition through five channels. 

The first of those is what we call our digital guidance channel. This is through the materials that we have on our website that includes online tools and calculators, videos. We have your podcast, of course, Shane, and there's a lot of written content on there as well to help our members navigate and educate themselves on this situation and on superannuation and retirement generally. 

The second channel is our education seminars and webinars. We have education managers situated around the country, and their job is to meet with members in group settings, generally in a seminar. They also do it online via webinars, but also in workplaces where they are talking to members about superannuation and retirement through what we call general advice. 

The third one is access to simple financial advice. This is where members who have got relatively simple advice needs can speak with a financial adviser over the phone for simple personal advice, or what we call structured general advice. 

The fourth channel is what we call access to comprehensive advice. This is a team of comprehensive financial advisers who are in most capital cities around the country. They're available to sit down and talk through with our members, talk through their full financial situation and provide comprehensive advice to them. 

And then the final channel within our guidance and advice proposition is what we call access to external advice. So there are a lot of AustralianSuper members who have financial advisers, and we have 3500 external advisers that are registered with AustralianSuper. What we'd look to do is try and make it easier for those advisers to work with AustralianSuper because that ultimately benefits the member. And then finally there's a subset of those, or about 150 who in certain circumstances we will refer a member out to them for advice if it's appropriate to do so.

Shane: Thanks, Ross. And I think there's a couple of themes there and we'll touch on the sorts of advice that people might seek, but you talk about that help, that information right through to telling someone what to do based on their personal circumstances, we'll talk about that. 

And that external adviser channel that you just talked about. We do talk about superannuation being only one part of someone's financial self. And a lot of times a member or a non-member will need advice on a broad spectrum. And there are thousands of strong advisers in Australia that are able to help Australians with their retirement and savings needs.

Ross: Yeah, absolutely. What we find with that channel is that because our comprehensive advisers are based in most capital cities around Australia, so sometimes there's a geographical reason that somebody's in a region where they don't want to travel to the city in order to receive advice. So that's a circumstance we'll refer them out.

Shane: So, taking a step back and looking at what help and advice can help someone with. So, someone's thinking about something and they're not sure what to do. Give us some examples of what seeking help and advice can help someone with.

Ross: This can come about at any point in someone's life, and so there are many reasons, but there are key times where, as you say, it might be particularly helpful for somebody to reach out for advice. For example, a major life event, such as having a child, they've bought or sold a home, or they've had some sort of change to their health situation, or indeed of a loved one, or in fact their loved one may have died. 

Somebody could be facing financial challenges, like a debt or unexpected expenses, or on the flip side of that, they may have just received an inheritance or had some other form of financial windfall. It might be just that they've made the decision that they want to get a bit more specific with their financial goals and create a budget. Or it could be as simple as they're unsure about whether they've got their money invested in the way that they want to, and they just want to explore that a bit further.

Shane: I think there's multiple examples, but the main theme that you've picked up there is everyone's situation is different, and so there'll be different needs for different people to seek help and advice. A lot of the time we see people not being aware that they can do that. So we're trying to make it more obvious to people in the way in which we engage with them that there are help and advice services available to them. 

But as you said, there's multiple reasons why someone could benefit from help and advice. We've talked about the different types of advice that someone can get, or you've alluded to different types of advice. And so the terminology we've used is general advice and personal advice. Could you just touch a little bit on the differences between general and personal?

Ross: Yeah, sure. So I think the first thing to talk about is, I'll go to personal advice and that is where a person's situation is being taken into account. And then also there's a recommendation taking place in relation to what that person should do. That's in the simplest form what personal advice is. 

General advice stops short of that in that there might be broad foundations about what might be a good thing for somebody to do, but it's not taking into account their personal situation. And so that's at the simplest level, that's the difference between general and personal advice. 

Shane: Yeah, and that's a good explanation. I think the last thing I'd add to the personal advice is that can only be delivered by a qualified financial planner. So just moving into the personal advice space, quite often we'll hear people say reasons why they won't seek advice, and a lot of the time it relates to the cost involved in financial advice, or at least the perceived costs involved in financial advice in some cases. So could you talk us through for the AustralianSuper services and then maybe even just an industry overview of where advice would cost and how that works?

Ross: So I might even talk about it from the level of guidance and advice generally. So with talking through the respective channels before, obviously everything that we have online through our digital channel that's available to all of our members for free. Indeed, it's available to all non-members for free as well.

The second thing is that the seminars and webinars that I spoke about, there's no cost to attend one of those as well. Then we get into the more personal advice type channels. The first of those being simple advice which is delivered over the phone where that's wholly in relation to your superannuation account, there's no additional cost, it's included within your or membership. Through that channel you can receive more detailed retirement advice, such as transition to retirement or starting a pension account. For that type of advice, a fee may apply.

Shane: So you talked earlier about the types of advice, and some I forget, so in that example, it's simple advice over the phone at no additional cost. Someone may want to get some help on, "Am I in the right investment option or do I have enough insurance?" And those are the sort of services that could be provided as part of the simple advice service? 

Ross: That's absolutely right. 

Shane: Okay. And so moving into the comprehensive financial advice topics which you really touched on was, as the name suggests, comprehensive. It covers a more broad topic and in many cases factors into the whole household, not just the individual. So what would be the costs involved in that?

Ross: It's been the subject of much discussion within the industry about the cost of comprehensive advice and there is real efforts within the industry to seek to lower that over time. When you come to see a financial adviser, but this is true for many advisers. The first meeting is complementary and it's all about the adviser and the members or the individual getting to know one another, exploring the person's personal financial circumstances and their goals. 

And there's generally no personal advice which is provided in that meeting. If in that meeting, the adviser and the potential client decide that they want to pursue an advice relationship, they'll talk there about what the cost of that might be and the adviser then goes away. And based on everything they've talked about, there may be further conversations or information gathered. Based on that, they'll prepare what's called a statement of advice and that will be charged for.

The cost for comprehensive advice is very different across the industry. It will depend very much on how complex that advice is. And it is different from adviser to adviser as well. Within AustralianSuper, that's no different. The actual cost will depend on the complexity of the advice. But it's all agreed upfront and in writing prior to any advice being produced.

Shane: Yeah, I think that's a really important point, is that no services will be provided until the client/member agrees to those services and the fees that will be charged. Okay, thanks, Ross, on that cost part and as I say, a lot of people see a cost or a fee and can be fearful of what that might be or afraid of paying that. But obviously, when you're meeting with the adviser, they'll talk through the benefits and the outcomes they're looking to achieve for that service that they're actually providing.

So, another challenge for many people is who do I know is the right adviser to see and how do I connect with that right adviser? So can you give us some idea on how people might think about finding the right adviser to suit their needs?

Ross: I would say that within the industry more generally, that often people will rely upon word of mouth or they will go to a certain institution that they're associated with. Within AustralianSuper, we do receive a lot of members that come to us, and they are seeking an adviser with the different channels that I talked about before. 

What's really important to us is that when somebody comes to us with an advice need is that we effectively triage them to the right channel. So we have a team internally, which is called the advice appointments team, where somebody gets onto our website and completes a form to say that they are keen to receive some personal financial advice. 

Our advice appointments team will pick that up and give that member a call. They'll have a conversation about their situation and what their needs are, based on that, they will work out whether or not that simple advice that we talked about is more appropriate for them or indeed, if they actually require comprehensive advice. If it is comprehensive advice that they think is more appropriate, then the decision will be made to which adviser might be most appropriate. 

Shane: Yeah, and I think that point is really important. So in our case, the conversation that is had between the fund and the member is all about standing their needs and desire. And as you alluded to earlier, the decision on what adviser is referred to for that member can be anything from location, there could be preferences around wanting to see a male or a female. There could be importantly around topic. So that's how we manage it. But you also alluded to at the very beginning that a lot of referrals come from word of mouth, from family and friends.

There's a lot of advice businesses that are built on that model. So again, it's not an easy pathway, but in our example, we're trying to provide that pathway for members to reach out to us and we'll help guide them through. 

So, someone gets an appointment with an adviser and they're preparing, generally there'll be a little bit of a wait time between that appointment time being booked and the meeting. From your experience, what does someone need to prepare for that first appointment? 

Ross: Different advisers or different advice businesses will have different processes when it comes to that. Many will seek to gather a lot of the information from the potential client upfront before the meeting. And so that will involve a lot of their financial situation and whatnot.

I would say that the most important thing in preparing for an advice appointment that somebody could do is to think about what their goals are, what they really want for their retirement, what's really important to them, the quantifiable sort of things are a bit easier to gather and it's a matter of getting the numbers together. The part which can often be a bit harder for people is to think about, well, what is it that I really want? What am I trying to achieve?

Shane: That's a really important point. That last one is that generally when you're going to see an adviser, if not in all cases, it should be in all cases, the output of that advice, if it proceeds, is how does the adviser help you meet your goals and objectives? So it's really difficult for an adviser to work through what that output looks like without there being some thought put into it from the client or from the member. 

So that's really important that pre-thinking is done. But during the meeting, there's some probing questions that would take place that would allow that to maybe surface itself a bit better too.

Ross: Absolutely. And I think that in relation to the numbers and the things that the person is to pull together in order to put the adviser in a position where they're able to give them good advice, it's that it's really important that they understand their situation fully. So, things which are easier for members or for potential clients to come up with there is to understand their assets and their liabilities and things like that. 

They can access that pretty quickly. What we find is that people might not have quite as good an understanding of their living expenses. That can be a little bit harder to understand. And so it's important to spend, if you can, spend a bit of time understanding your living expenses, because that has a really big impact on what the potential advice might be. 

Shane: Yeah. It's a really important point and we do see that, particularly when people are looking at retirement advice. How much money do I need? The question you'll get asked, how much money do you think you need to live on in retirement versus in work time, and that's sometimes, how long is a piece of string... 

Ross: One hundred percent, and I think that this question about what's the number that I need to retire with, well, that is fully a function of, well, how much is it that you're going to need for your lifestyle in retirement? 

Shane: So you touched on this a little bit earlier, Ross, when we were talking about the cost of advice. But could you just go through what someone might expect when meeting a financial adviser? 

Ross: So, meeting with an adviser is basically a chance for the adviser and the potential client to get to know each other. You'll find out a bit more about how they work and work with you and provide advice. It's also an opportunity for you to really share a bit about yourself, your personal situation, your concerns, your plans for retirement and whatnot. 

In most cases, the adviser will use this meeting as an opportunity to understand your needs and provide a quote for any advice fees moving forward, which is what we talked about before. After that first meeting, your adviser will generally prepare your personal financial plan, which has done so via a statement of advice. 

This is where they present their recommendations to you and explain how it helps meet your goals and work through any questions or changes that you have. Once you're happy with the plan, your adviser will work with you to put that advice into action. They will implement that advice.

It's important to remember though, your financial plan is in a set-and-forget type situation. It is good to come back and review that from time to time to ensure that it remains appropriate.

Shane: Yeah, that's a really important point you raised earlier around situations why people might seek help and advice. And quite often those things will happen multiple times through someone's lifetime. So quite often people will think, okay, well I don't have enough money to seek advice or I'm not ready to retire. But there's a range of different times through someone's life it'd be really important for them to seek guidance and advice and that review process ongoing is really important as your needs, objectives, life situation changes. 

So, Ross, before we finish up, I just wanted to see if you could reiterate the situation where people don't know what they don't know. They don't know how to seek help and advice. And so if you could just finish off with a tip from you on if someone's feeling uncertain around do they need help or how to get help, what would you tell them?

Ross: I think that the most invaluable thing that you can do and what a good adviser will help you do is to really help you feel more confident in your situation. That's, to me, the most important part of advice, probably the most valuable part, is the self-confidence and the peace of mind that it can bring to people that have received it. 

And so if we sort of step that back to your question, then I think that for somebody that's in the situation, thinking about what they should do, something that you'll never regret is to go and educate yourself a bit more about your superannuation, about your financial situation and your retirement. 

It might feel daunting at the start, but if you go and take that step, and that can be done, as I said, working through your superannuation fund's website and what materials might be available there, attending a seminar or a webinar, that should be a no-regret action. You can educate yourself a bit more there. 

That then puts you in a better situation to assess where you're at, what your specific advice need might be from there, and then you're in a better position to be able to work through potentially with your super fund to say, okay, this might be the best next step for you to take in terms of your journey. 

Shane: That's a great tip and a great way to finish. So, thanks for joining us today, Ross. 

Ross: 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.

AustralianSuper has the privilege of 3.3 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 Warwick Merry, a member of AustralianSuper. Welcome, Warwick, and thanks for joining us today.Warwick: An absolute pleasure to be here. I'm so excited.

Shane: That's good to see and hear. So, Warwick, can you tell our audience a little bit about yourself?

Warwick: Yeah, certainly. I'm in that age demographic of where I sound like a packet of rice bubbles when I get up, things go snap, crackle and pop. So I'm mid 50s, I've worked corporate for 10 years, started my own business about 20 years ago, and I'm an event host. And just bring energy, joy, and fun to an event and get people engaged in what's going on. So I've been doing that for a while.

Shane: As I said to you prior, I'm a little bit threatened by your event hosting and radio voice here, but we'll keep pushing through. So, tell us a little bit about, so you said you started your own business 20 years ago, was it?

Warwick: Yeah, 1999. So that's 24 years ago now. So, I worked corporate at IT for 10 years.

Shane: Okay.

Warwick: And then after doing that, I found that I had a bit too much personality for IT. So, my wife at the time went away to a conference and came back and told me about this thing called a professional speaker. And I thought, oh, man, that's what I'd love to do. I love the sound of my own voice. I love getting in front of people. That'll be so cool. And then I sort of made this decision that's what I wanted to do.

Shane: So, thinking about that, clearly you had a passion for the area that you're working in now, then you were in a professional career in IT, so how did you process that whole, "I'm in a steady role here, I get paid every fortnight or whatever it may be" into moving into this new world? How'd that go?

Warwick: Yeah, that was tough because I was getting paid good money, no doubt about it. And money was going into my super fund, so that was all delightful. They were paying for my health insurance. I had lived a really good life, and I was just so miserable and I was not enjoying it. I did well, like, I worked for a large IT company for managing the customer service of a large telecommunications client.

So they loved me, but my heart wasn't in it. And I just thought, I've got to do something different. So, hearing about this concept of this professional speaker, and I love the idea of inspiring and energising others. And it's 1999, I had no idea what I was going to talk about. I knew what I wanted to do, but I had no idea what I was going to talk about.

I was in IT, so of course I talked about Y2K, and so I knew it was limited lifespan, but it's what I knew. And it just came to the fore that my true skill set was in hosting and MCing because I can play with the audience. I've done a lot of improv and I've done stand-up comedy. I had a one-man show in the Melbourne Fringe festival. I've done a lot of this kind of stuff and played, and what I find is events can be boring. So, what I can do is I have this gift of being able to bring that to life.

Shane: Excellent. So it's clear, the passion comes out. So, when the decision to move from IT into what you're doing now and what you love. So, you talked about that security. What about financially, did you think, I'm going to be okay here for a little while to try this, and if it doesn't work out, I've got something to fall back on?

Warwick: Yeah, no, it was really interesting at the time. Your family love you and want to support you. So, my parents were like, “oh, no, don't do it. You're in IT. It's so secure.” And talk to anyone in IT, it is not secure. And the company I used to work for no longer exists.

So for me, looking at the numbers was always, you know, how much can I earn? How can I make this work? What were my outgoings? What was I prepared to do? And there was a risk. There was no doubt about it was a risk. But at the end of the day, he who dies with most toys is still dead. And so I had to live while I was alive. But it's so true. You got to live. And so I'm like, well, let me try this without a plan of ‘I can always go back’, but let me try this and if it doesn't work, well, I'll make another decision.

But for now, this is the decision, this is the way, both feet are in this. I wasn't keeping one foot on that, ‘I can always go back’. It was like, "No, this is it and away we go." And I've got to tell you, running your own business is a delight at times. It's evolved vastly and my business has as well.

And there are some months I am rolling in cash and other months I'm having two-minute noodles. And so it's different. It's not the, "I regularly get my X-thousand dollars a month", it does not happen and you've got to be able to live with that. And some people can and some people can't.

Shane: But it seems, it's labouring the same point, but it seems that you were mentally prepared for that in the transition, because your passion was overriding any sensible decisions around finance for example.

Warwick: I'm a qualified accountant, right? And I love a spreadsheet. The thing is, I had done my budgeting, I had done my numbers, and I was able to secure a deal where I got paid a minimum amount. And I thought, we can pay the mortgage with this. And my wife was working at the time. We can pay the mortgage, we can pay our expenses. We didn't have any kids and we were prepared to live frugally, should we need to.

And it's just about, what do you want? What are you prepared to pay to get it in terms of money, time, energy, whatever? And I couldn't stay. I think the thing for me was I couldn't stay where I was. I had to do something, and this is what it was.

Shane: Now, while I link you back to superannuation. So, you were working in a paid job where you got paid a salary, and your superannuation went to your super account on a regular basis, then to become self-employed. And early on you're thinking, ‘man, where am I going to get my first gig from?’ And where did super fit in your priorities when you first made that transition?

Warwick: It so did not fit in my priorities, like, you know, who thinks about super? You're just like, "Oh, as long as I got money coming in to pay my bills..." And then as you get a bit older and look, and maybe for me, with an accounting brain, I've always thought numbers are important. And so I was always aware of it. As I paid myself, I was always sure to pay my super.

And this is one of the traps for self-employed people that they often, they'll look at where do they cut costs or they don't pay themselves, they just do drawdowns and stuff. And yeah, well, just give all the numbers to the accountant, they'll work it out at the end. Superannuation is just so important.

And to be quite honest, I'd hate to just live on the pension. Now, I know many people do, my mum does, my mother-in-law does, and they have some bits of their super sort of put aside, but it's just like I wanted more.

And so I was always looking at, okay, how can I maximise the benefits of super and also look at options? So investing outside of super, which is what my wife and I have done quite heavily, and super has always been part of that calculation.

Shane: So you move across, as you say, you're not thinking about super, which is quite common, particularly for startups. And so then once you started to think, okay, I need to be putting money aside, how did you do that? Did you do it with AustralianSuper? Did you just do self-managed? Did you do a combination of...

Warwick: Yeah, originally I had an alternate superannuation fund. Well, for the first, probably, I don't know, five, six, seven or eight years, I really didn't worry about it. Like, as I paid myself, I always paid my super and that just went into the fund and I would always religiously read my statements, find out where I'm at, just so I knew what was going on. It wasn't one of those, "Oh, that's something for when I'm 55 and blah, blah, blah..."

It was like, I want to know. And then my new wife and I got into property in a big way. And so then looked at setting up a self-managed super fund because there was the talk at the time and adviser was, "Self-managed superfund is a great way to get into property, blah, blah blah..."

And so we did that. Oh, man, those things are not easy to set up. You've got to get a bare trust sorted. There are so many regulations, there's so many things you can't do. And the rules for super kept changing and I struggled to keep up with them and I'm a big believer in getting experts who know what's going on.

So we got to the point where we actually made a loss and so we then went back to setting up super, that's when I joined AustralianSuper. But can I tell you, there was such a relief getting out of that setup. And I've spoken to other friends who have set up their own super funds. It's a pain unless you've got an absolute truckload of money and got advisers you're paying serious dollars for, it's something where the numbers don't add up for me.

And so, came to AustralianSuper because I had a look around and thought, well, what's going to be a good super fund for me? I like the fact that you’re very large and your returns were good because I go for the...

Shane: High growth.

Warwick: High growth. And I'm just in for a penny, in for a pound. It's easy for me to manage. I look at my super every couple of months because I've got an app, I press a button and then I can have a look at it, it's gold! So I can see what's going on. I get my insurance paid for out of the super. So, yeah, it was a lot easier for me because I then didn't have to keep up with what was going on.

And the government, they do have a tendency to meddle in rules and keep changing stuff on you and it's just like I don't want to have to keep an eye on that. And so my wife and I now have some solid super and we do have investments outside of super as well. I was listening to some advice the other day and the tax benefits of super are something that are quite appealing, particularly as I'm now in my mid-50s and looking to retire in the next couple of years or quasi-retire.

Because it's the whole thing of like in doing what I do, I don't think I'll ever stop because I just can't not be on a stage at some description. So, it's important to keep my foot in the water and it's like I don't want to work too hard. By essence, I like to conserve my energy. Some people call it lazy, but I say I conserve my energy.

Shane: I think talking a bit about what retirement looks like and how you get there, but you sound as though you're in a fortunate position. You can make that active decision that you want to keep your foot in for the passion as opposed to you need to do it.

Warwick: For sure, I remember when my mum and dad retired, they sat down and they asked the question, ‘can we afford to retire?’ And I remember thinking at the time, I will never, ever ask myself that question. It's like, when I'm ready, it will happen. They were farmers. I grew up at a dairy farm in South Gippsland and they worked hard. Dad always had a second job because the farm never paid enough. And I'm just like, I don't want that.

Shane: So, when you've started talking about what retirement looks like, you've said you're giving yourself three years to sort of semi-retire, transition to retirement, what about the conversations you have together with Sam? What's she thinking?

Warwick: So for us, we're in a position at the moment where we're looking after mothers, Both of our fathers have passed, our mothers are in their mid 80s. Sorry, mum, early 80s. My mum and her partner live in Queensland and Sam's mum lives just up the road from us and so we are active in their life. That takes fair bit of attention. We don't have any kids, so we will often ask the question, who's going to do this for us?

And that's another reason why you need to have a good super so that we can look after ourselves. So when we talk about what that is for us, so there's going to be travel. My wife is Sri Lankan, born in the UK, but lives in Australia, so she's one of those women of the world. In the last five years, we haven't travelled, but we will look to travel more. We also have a property, 75 acres up near Broadford.

Shane: Nice.

Warwick: Yeah. And so it's our retreat. We go up there, we got a little weekender thing on it and we go up there and just sort of chill out. And we got a dog, a very active dog. He's a toy poodle. Winston the wonder poodle. He runs around, has a great time and I'm like, mate, we got 75 acres. And he's like, yeah, but I'll just stay at your feet.

So there'll be a bit of travel up there, there'll be a bit of work. I can't imagine Sam's going to not work in some description. And in her career, she's able to drop down to part time.

I once had Jeff Kennett speak at a Beyond Blue conference. And said one of the biggest causes of death for men in Australia was retirement. And I've seen so many corporate guys in particular, who are like, this is who I am. And I'm the CEO, and I do this, and this is what I do. And then they retire, and they're like, well, who am I? And their wife's like, well, I don't care who you are, but you're getting the heck out of here because you're under my feet, and I've had enough. You used to leave the house all the time. And so it is that, well, who am I? And what does retirement mean for me? And what can I do?

And so I'm going through that now. Now, I'm very fortunate. I sing in a choir. I've made furniture. I play with epoxy. I do lots of creative little dabbly things. Some of my friends have already retired, talked to them and, like, mate, I had no idea how I had time to work, I'm so busy at the moment. Which is fantastic. And I've a big sense in community, like the Professional Speakers Australia, I've ended up being the president and I've been on the board, so I'm actively working in that community as well.

In the events industry, I'm active there, so there's always lots of things to do and I'm aware that as I age, I'm going to be able to do less things than I used to. I've lost my ladder license. I can no longer use a ladder because the statistics on men over the age of 50 and ladders and emergency departments is horrendous.

Shane: So I just wanted to come back to your point about mental health in retirement, which is a really important factor. So, the points you made are very common and we do see and do hear from our members, particularly where retirement came sooner than had been planned, whether it be injury or redundancy and so on. And there was that connection to the role, but also the fact that they hadn't thought about it.

So, obviously, you're in a position where you're thinking ahead, and in your current role, you have a little bit of control around, assuming the clients keep coming, when you stop and when you start. But I think that's a really relevant point that you raised, that finance is one part, but that's not the most important.

Warwick: For sure, and it's that living a life of happy usefulness. And so whether that is being of service to your community or your family, or there are some families that you take on the role as the patriarch or matriarch in retirement, and you run everything. And there are other families where you're like, "I am out of here, I don't want to spend any time with my family if I can help it!"

So, it is about looking at how can I continue to contribute. If you're just running your life for yourself, it's going to be empty and shallow. How do we support men as they go through this retirement phase? Because men are not known for sitting down and talking about emotions, talking about what's going on for them, appearing not necessarily weak, but vulnerable.

It's like, a lot of men just don't do that. Oh, she's right. And then it just gets messy. So it's like, how do we... How do we contribute? And we've got technology that can help us in so many ways to do different things. One of the things for sure, I'm not going to become a gym junkie. That's not going to happen. I am a nutritional overachiever. And yeah, the gym...

Shane: And you conserve your energy.

Warwick: Yeah, yeah, I keep calm at all times.

Shane: So you've got this vision or plan of transitional retirement and semi-retirement in a couple years’ time, and Sam might do similar. And so funding of that retirement, you talked about investment properties and super, what's going to be the predominant source to start with? Is it the super, is it the investment properties, or is it just a mix?

Warwick: See, there's a challenge for me is that being self-employed, I actually don't pay myself a great deal. And since I don't pay myself a great deal, my superannuation is not massive. Now my wife's is pretty good, which is great, but we do have a significant property portfolio, right? And so that's going to be part of it.

There's been changes in rules around property, so we're actually reducing the number of properties that we have. And we're at the point where we want to minimise the debt that we have. So that will be some of it. It won't surprise me. And we've talked loosely about converting some of those properties into funds.

So, whether or not that goes, some will go into super, whether some goes into indexed funds or something like that, I like the long-term maths on indexed funds, which is essentially what a lot of super funds are. You're getting into that and they do all the hard work and keep the experts doing the expert stuff. And then you just look at it, the numbers, and go, "Oh, that's going up!" And if it's not going up, questions will be asked.

Shane: Excellent. We'll be ready. So, on all of that, as you said, there's some complexity there. There's the access to super that's required. There's your wife's super, and there's the properties. Who do you seek your guidance and advice from?

Warwick: So, we have an accountant that we talk to regularly. I, as an accountant, do a lot of the accounts for all our stuff. We have had other friends who have gone through retirement, so we talk to them about their experience and some of the things that they've done. I listen to podcasts. There's a lot of information out there where you can get some of these different resources.

And look, I've spoken to financial planners over the years, and we've had different conversations at different times. We were at different spots, because there is so much going on that I'm just not aware of. But there are new things happening all the time that I'm not interested in keeping in touch with. And so the experts are. So, I'm a big believer in paying experts for good quality advice.

Shane: Yeah. So, we're coming to the end, Warwick. And so I was going to ask you a question about how confident you feel going to retirement, but I got the sense that's probably not an issue for you. So, what I probably wouldn't mind hearing from you is any words of wisdom or tips for our listeners around consideration of planning for retirement?

Warwick: Yeah, yeah, yeah. Look, the number one message I would have for listeners is don't be scared of the numbers. Like too many people I know and this is whether they're running a business or looking at superannuation, they're like, it's all just numbers. I don't understand it. And then they'll shut down.

So, it's like, take a bit of time to get to understand it. It's too important not to. Retirement is something that you want to, I look at other countries, like, you look at some of the stuff that's going on in, for example, the USA. I go over there and I've been into cafes, and the people that serve me should be retired. They should be home with their grandkids, and yet they're working minimum wage and tips. We don't have that system.

Our superannuation system is really good. Get in control of it, understand it, look at the numbers. The sooner you start, the better. I think it was Einstein who said that compound interest is the fifth wonder of the world, compound interest is just amazing. What you do need to do is look at and review superannuation from an early stage at least once a year, preferably once every six months.

Nothing much is going to change in that period of time, but at least you're keeping a check on it. Don't be scared of taking risks, but understand what could happen if things go wrong. And so it is about risk mitigation, it's not about avoiding all risk and let's just keep it in cash. Look at your finances. We look at our bank statements at least once a week.

We're looking at our credit card so nothing gets through. It's so easy online to just have a bit of a look. Oh, yeah, I know what all those are. Great. Get on with your day. So, it is that whole management principle of what gets measured gets improved.

And so it's like you got to keep your eye on the ball. Keeping an eye on the numbers gives you the ability to respond and go, "You know what, this fund's not working for me, or this investment strategy is not working for me, or this approach is working for me, thank goodness, aren't we doing a good job? Yay!" So, keep your eye on the money.

I think that's really important, and it'll set you up for sort of better success. And it's really interesting. So, I was reading something today that said that people who rent are ageing quicker than people who own their homes or who have government-provided accommodation. So, there is a physical impact of financial stress.

So, therefore it's really important to minimise that stress by going, well, I know what's going on. I don't just go, oh, someone will tell me when I get ready to retire. It's like, no, no, no, this is your life. Grab the steering wheel, drive it, really enjoy it and do whatever you can to make it work.

Shane: I think that last phrase has probably summed up what I've learned from you today. So, you've talked about that in relation to finance and planning for retirement, but going back to your decision to move from tech services into what you're doing now and following that passion has really come through today.

So, Warwick, I've really enjoyed our chat today. Thank you for your time and thank you for your enthusiasm and we really appreciate it.

Warwick: Absolute pleasure. It's been great to be here.

Shane: Thank you for joining us today. If you're an AustralianSuper member and would like to join us and 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 enjoyed this podcast, subscribe and share it with your friends and family. My name is Shane Hancock and I look forward to the next episode where we'll 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 people.

Quite often, AustralianSuper members will ask questions that are found through various channels. And mostly those questions are relevant for many members, and so we thought it'd be great if we could share some of those questions and answers through the podcast.

To help answer these questions, I'll invite a guest expert to join me on the podcast and today I'm very happy to be joined by Fern Havea, financial planner at AustralianSuper. Fern provides advice under the licence of Industry Fund Services and has been a financial planner for over 15 years. Thanks for joining me today, Fern.

Fern: Thanks for having me.

Shane: A really common question that we get from members, and I'm sure you do when members come and see you for advice, is how much super is enough super? And does someone really need $1 million to retire on?

Fern: Yes, I see this question quite a lot and it comes out in different forms. One way is do I have enough money to retire on? And that's because we don't go around and compare our super balances with other people. It's a bit of a taboo subject. Someone like myself, I see what people have every day, I have a look at what our super balances are and things like that. Now, how much is enough really depends on what does retirement look like for me? What am I spending today?

How long do I want my money to last? More often than not, I don't see people with a million dollars. I see people with much less than that. And that's because superannuation isn't our only form of income. We may qualify for some Age Pension. We may receive some inheritance along the way. For every person, it looks quite different. So, I guess the short answer is no, we don't need a million dollars to retire. And it does depend on your situation.

Shane: I think that's a really pertinent point there, Fern, is that everyone's retirement needs are very different. And one of the things that you would take into consideration as a planner is what that person's personal objectives are, and then work backwards from there. So, thank you.

Another common question we get, and it's quite pertinent at the moment with investment markets, is what does market volatility mean for someone approaching retirement or who's already retired? And before we start, it might be worthwhile giving your view around what market volatility is.

Fern: Yeah, absolutely. So what is market volatility? Market volatility is just the range of the ups and the downs that we have in any investment option. For some options, that difference in up and down might be a lot greater. So we call that larger volatility. And we have, of course, more conservative options that don't have as much ups and downs. Now, I do meet with people that tell me, "I'm retiring next year, should I move all my money to cash?"

Well, my answer to that is, are you planning to spend all of your money next year? Most likely no. So when it comes to volatility and what do we do, a great place to start really is education. We need education on each of the investment options available to us. And what does that range of ups and down look like?

Let's relive a share market crash. How much can I lose? Let's go through times of when markets do well. How much can I earn? The other thing we do, well, I do as a financial planner, is I align our goals with the way we invest. So we might decide, well, when I retire, I'm going to renovate the house, so let's keep this in something a bit safer.

We also need our superannuation to fund the first couple of years of retirement. So, here we might look at more conservative options. But I still need our money to last 10, 20, 30 years from now. So, we do expect someone who's approaching retirement or in retirement to still have that exposure to the ups and the downs.

Shane: Great. Thank you. Now, a question we've received on a similar sort of vein is, "I'm coming to retirement planning late, what investment strategy is best for my super?"

Fern: Yeah, that's the "give me the silver bullet", that's what everyone wants. How should I invest my money? It's funny, when I'm just around with my friends and people meet me, what do you do for a job? And I tell them, I'm a financial planner. The first question I get is, how should I invest my money? Now, as I mentioned before, the way we invest must align with our goals.

It must align with my tolerance to the ups and the downs. Some people, when we go through a crash, they see our super has dropped, my investments have fallen. They don't care. They're quite comfortable with that level of volatility. Some people, it's really scary, "I can't really tolerate that, I'm retiring in two years, how can I lose this money... Do I have to work longer?"

So this really is where education comes into play. Now, education can be in the form of maybe reading up on your investment options. It could be speaking to your super fund over the phone or meeting with someone like myself as a financial planner. But I guess the short answer really is it has to align with our tolerance and it has to align with our goals.

Shane: And whether it be speaking to a financial planner or education or using a risk-profiling tool, there are sort of ways that someone can get an indication of their own risk profile.

Fern: Absolutely. A great place to start.

Shane: Okay, so moving on to a question relating to working part-time. So we quite often see people either part-retire or go back to work. So, if someone's planning on working part-time during retirement, what impact will that have on their super?

Fern: Yeah, so we see this a lot. Retirees picking up some part-time work, casual work. And it's great because work is now a hobby. It's a social activity. I don't have to be here if I don't want to be here. That's the great thing of picking up work while you're retired.

It does have a positive impact on your, I guess, your retirement capital. Because if we're working part-time, that means I don't have to touch as much of my superannuation. It might also mean I can spend a little bit more because I have more money coming in from work.

We may be in the position where we're working full-time and we want to reduce our hours while we're working. This is where we can introduce a transition to retirement strategy. All this means is right now I'm being paid for five days a week and I'm going to reduce my days to three days a week, who's going to pay me for those two days that I've left behind?

This is where I can tap into my super to replace that lost income. There are other uses to the transition to retirement strategy, such as saving more, but I'm not going to touch on that today.

Shane: Great. So, basically you've talked on that compensation, for lack of a better term, of five down to three. That's available for people who have met the preservation age. So, therefore they're able to access their superannuation, but they're still topping it up through their contributions. Fantastic. Now, this is, again, quite a common question, and relevant in today's situation, is someone who's got debt and they're getting close to retirement, should they be paying off that debt now or wait till they can access their superannuation? I know that's a very open question, Fern.

Fern: It's a big question there. Absolutely, look, ideally, we don't want to use our superannuation to pay off debt. It also depends on when are we retiring? Are we retiring tomorrow or are we retiring in five years from now? Generally, it's always a good idea to start hacking away at those debts, and that's especially because of the power of compounding interest on that loan. If we're going to use our super, our loan can grow quite a bit, and it means we're using a large chunk of our superannuation.

But this is one of the big advice topics I have to deal with when I meet with members with debt. We need to weigh up do I put more on the loans? And that might be a mortgage, it might be a personal loan, it might be a credit card. Or do I salary sacrifice more to my super? And to weigh that up, I really have to look at a person's individual needs and situation.

Shane: Thanks, Fern. Now, bringing all this together, people quite often ask us when they should start thinking about retirement, but they've also got a lot of things on their plate, generally, particularly life. What are some tips for people that you can provide to start thinking and planning for retirement?

Fern: Yeah. Okay. So, yes, when we think about retirement, it's a whole new world, it's a whole new landscape. And sometimes it can seem so overwhelming, we don't even start. It's the easiest thing for us to put off. Now, a great place to start, is really to have an inward look. Look in the mirror first.

We need to understand what am I spending today? Do I still have dependent children at home? How long is that going to last? Probably forever. Do I have loan repayments that will be paid off in retirement? So, we also have to ask ourselves, will my spending today look the same in retirement?

I have people that come to me with this budget, they tell me, "I want to spend X amount in retirement." Well, what are you spending today? That doesn't seem very realistic. We ideally want to try and spend the same amount we are today in retirement. We also need to understand what are our upcoming expenses. Do I need to replace the car to prepare for retirement? Do I need to renovate the bathroom?

How much is that going to cost? Have you thought about when and how would you like to retire? Are you going to go full-time and just stop completely, or are you going to slowly reduce your working days and then retire? Do we have a retirement date in mind? So when we're grappling and dealing with the retirement question, what are our goals? And those things I went through, we can make goals out of them. Once we know what we want, we can look outside.

What does the landscape look like? When can I access my super? You spoke of that preservation age. That's the earliest I can touch my super. Do I qualify for the Government Age Pension? How much will I get? When will that start?

So, when we're trying to understand the landscape of retirement, we can attend seminars offered by our super fund. Listening to podcasts such as this is great. We have a lot of reading material online, whether it's from the ATO, the super fund. Speaking to your super fund is also a great place to start. Give them a call. What are the advice and education options you have available to me? And of course, I think the best place to start is to speak to a financial planner.

Shane: So, Fern, I think we've covered a range of topics today. So, some key themes for me is a lot of these questions are broad in nature, but personal in response. So the theme here is that everyone's situation is different. There's a view of understanding your own personal circumstances, where you sit now and where you want to be, but then seeking help and guidance as early as you possibly can.

So, whether that'd be through the means that you talked about earlier, it can be as simple as reading articles, education, or at the right time accessing quality financial advice and someone will help set that pathway for you. But the first piece is take the ownership yourself, understand it's your retirement. Reach out to AustralianSuper or your super fund and they'll point you in the right direction.

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.

AustralianSuper has the privilege of 3.3 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 Kiriaki Hamilton, a member of AustralianSuper. Welcome, Kiriaki, and thanks for joining me today.

Kiriaki: Hi, Shane. How are you?

Shane: I'm good, thank you.

Kiriaki: That's good.

Shane: Kiriaki, can you start off by telling our listeners a little bit about yourself?

Kiriaki: I'm three years off from turning 60, so I'll let you do the math. I'm sort of semi-retired. I wouldn't say I'm fully retired at the moment. I took a redundancy package a while back. I was a single mum for a long time, got divorced, had a three and six-year-old. And when I initially started working, I did a lot of casual work. So, I was a court reporter, I was an emergency teacher, all that stuff.

So, it was a lot of casual work in my younger days and prior to the girls, I really never thought about super, I knew it was going in if I earned a certain amount of money as a casual. But I never looked at preparing myself financially for once I got older and when I was thinking of retirement, I think when you're in your youth, you think you're invincible.

So the main thing was working. And then once I had the girls and got divorced, it was like, okay. I really need to start thinking about my future and the girls' future and all that stuff.

And so once I actually got an ongoing role as a teacher, a trainer and assessor, I would ask my colleagues who are accounting teachers, ‘what do you do with your super?’ And they'd go, oh, you need to salary sacrifice and blah, blah, blah. So I got all the forms at work, but I never went ahead head because I was consumed with raising...

Shane: And life.

Kiriaki: Yeah, as you do, and paying off a mortgage and all that stuff. And I know I need to go see someone to give me financial advice, but I think I've kind of managed things. But I regret not salary-sacrificing those twelve years prior to becoming redundant.

Shane: Okay, well, let's come back to that part. Let's take a step back to your early work life. So you talked a bit about a varying role. So what would a work life start out like for you?

Kiriaki: I was initially a court reporter, and so I worked around the courts, recorded the proceedings, etcetera, heard a lot of interesting cases.

Shane: I can imagine.

Kiriaki: Yes, really enjoyed the work, but that sort of dried out with the digital era, so we weren't required as much. So then I always had the teaching degree in the background, but I felt I wasn't ready or I didn't have the life experiences to do that. So, I went off prior to even the court reporting and did a lot of travelling for a year, came back and a friend said, ‘do you want this job?’

And I went, ‘oh, yeah, okay, I'll work at the courts.’ I had a legal background. Did that. And then I thought, you know what? I'm ready to teach. I think I've seen enough and got back into it, particularly after the divorce and where I really needed to earn some money again, because for the first time in my life, I had to go on Centrelink.

Shane: Yeah, right, so you were a court reporter and when you got divorced, and then you obviously thought about not only a career change, but the need to work more permanently.

Kiriaki: It wasn't so much a career change. It was, I need work because I've got two young kids and I'm a single mum now and I need to pay the bills, the mortgage. So, yeah, I started doing some emergency teaching and then did a trainer and assessor course. And started work at one of the big institutes here.

Shane: So it wasn't primary school teaching?

Kiriaki: No, I did some emergency in primary and secondary but then I found that I really enjoyed the VET sector, the adult education.

Shane: And obviously you referenced that you're a single mom and I think you said the girls were three and six. So that in itself, managing a full-time job and how did you cope with that challenge?

Kiriaki: It was really hard. The priority was of course their health and their education. I couldn't afford to send them to private schools, so they did great. One's graphic designer now for gaming and the other one's doing animation at another institute here. So they've done really well. They're fine young women.

Shane: You've obviously talked about the challenge and I shouldn't have assume, but obviously employers back then probably weren't as flexible as what employers are now. How did you find your employer helping you through that?

Kiriaki: Yeah. Look, because it was initially casual training, I had a certain amount of hours, but then they would ask me to do hours and a couple of times I refused and they weren't happy. And I thought my kids come first. And once I was made ongoing, things settled and I knew that I now had an income and I had some money I could spend on the girls or we could do extra activities or if they wanted a particular toy. Yeah.

I mean, I wasn't in dire straits, but mum and dad did assist me a lot. They'd look after the girls while I was working or pick them up after school.

Shane: So, that network was really important.

Kiriaki: Oh, yeah. Very supportive.

Shane: And so you did the teaching and assessment. How long did you do that for? Once you were permanent?

Kiriaki: I was with this institute for 12 years.

Shane: Yeah, great.

Kiriaki: So, I was training people to work in business admin office roles, especially in the legal sector. That role became redundant. I was getting a lot of mothers, single mothers coming into the course, or mums that had, their kids have sort of left home and they're like, what do I do now?

So a lot of them would come and do this course and say, I was a secretary 20 years ago and I want to have a career now. And you just see their confidence grow and that was the joy and the achievement of, ‘I can do this’, you know.

Shane: So, you were getting quite a bit of personal satisfaction out of that?

Kiriaki: Absolutely.

Shane: Yeah. And that's hugely important in a role. So, you said there was an opportunity that this team had to downsize and so then you put your hand up to be...

Kiriaki: I put my hand up. I thought, "Okay, I need a break." And I took the package. And since I took the package, I have gone overseas twice now. I just got back from a holiday in Greece, and my partner of six years now, he's like, let's just enjoy, let's just go away once a year. We're getting older and let's do it before our hips go or legs go, you know what I mean?

Shane: Yeah, absolutely.

Kiriaki: Because we like walking around and he goes, I don't want to be pushing you in a wheelchair, et cetera, especially Greece.

Shane: Yeah, no.

Kiriaki: So, that's what we've been doing. And I did pick up a day working as a casual trainer and assessor with Indian students who were trying to get their permanent residency here. And I was just told three days after I got back that they were merging classes and they no longer required me. And this is the thing with casual work. You're disposable. But that's okay. I'm fine with it. Because I thought, okay, whatever, I'll find something else.

Shane: Just roll with it. And so the package you took was a redundancy package. And so you then received that. And did you think about, "Okay, how am I going to use this package? Do I consider putting it in super, do I consider other things?" Did you seek financial advice around what to do with it?

Kiriaki: No, I have put aside some savings anyway, so the redundancy was this extra money that it was now my time and my time with my partner, because the girls had gotten to an age. They're mature young ladies. So, now it was, okay, you've worked hard. Now go have a break. And it's done me wonders.

Shane: So, taking a step back, obviously, you talked about the focus in life was to provide for your daughters and be available. So, obviously, savings and particularly superannuation might have been something you're aware of, but it may not have been a priority. Would that be right?

Kiriaki: That's correct. My priority was to get the wage in and to have enough to pay the bills so I'd budget it for everything. So that was a priority. So, usually there was nothing left over to, even if I wanted to. And I remember at one time when I was on Centrelink, they had sent me that the government would contribute to your super. So I did that.

Shane: But when you obviously started working full-time, you’re getting superannuation paid by your employer. How much interest did you take in your super then and notice that sort of growth?

Kiriaki: Every time I got my statement from AustralianSuper, I've gone, oh, it's gone up. Okay. And I haven't taken risks with my super. I've got a conservative little plan, and it's fine, the money's building up, but I was just saving on the side and budgeting. So, it's only now that I'm sort of thinking, okay, if I really want to fully retire, I really need to go see someone.

Shane: Yeah, yeah. And the fact that you're now enjoying your life. You had to do it hard there for a while, and it's great that you've got the opportunity to do the travel. And you're still young. You still got...

Kiriaki: I know, but you just don't know what's around the corner.

Shane: Yeah, that's true.

Kiriaki: And as you get older, your body changes. You want to really enjoy life, and you want to have that money to enjoy it. And I'm not saying I'd go on a luxury cruise or whatever people want to do, but for me, it's just travel. I've always wanted to travel. I was fortunate to go to India.

One of my Indian students said, would you like to come to my wedding? So I said, where's the wedding? And he said, Delhi. And I went, and I just enjoyed it so much. It was such a great experience. And if I hadn't picked up that job just that one Saturday, I wouldn't have met these students. And I really didn't know much about the Indian culture, and I learned so much from these guys. It was amazing. And I love teaching there. I love the students, put it that way.

Shane: But it just shows that obviously there was a two way connection there. If the students asked you to their wedding.

Kiriaki: And the parents kept calling me, ‘oh, you're the professor’. And I'm thinking, I don't have a master's degree, but I'll take it, I'll take it!

Shane: Just roll with it, just roll with it.

Kiriaki: Yeah.

Shane: So, obviously, you seem like you're in a really good spot at the moment, enjoying life. Now, you just said at the beginning that you're thinking about permanently retiring. And that's something, to be honest, that we kind of see less of, people are stage-gating retirement, they might not work for a while and then they do a bit of work. So at this stage, are you still in limbo around what the next few years will look like?

Kiriaki: I still want to work, Shane. I kind of get bored at home. So, one to two days, but I'm not sure if I want to continue the teaching. It's quite stressful because you're dealing with people and every student's different. Everyone's got needs, so you take on a lot of their energy. So, you go home and you just talk about, "Oh, this happened today..." I just sometimes think I'll go do a barista course and just become a waitress.

And then my girl said, nah, mum, no, no, you'll be standing all day. Then I think Bunnings. I love gardening. Maybe I'll work in the garden centre. So, these are the things I'm thinking about, because it's not about ambition now, for me now it's about relaxing, having an income coming in, seeing a financial adviser, getting that advice. What should I do now to get me through until I can't travel anymore and I'm at home watching the Real Housewives or something.

I'm not sure. All I know is I want to continue travelling with my partner. I'd love to take my girls to Greece. I think the pinnacle for me would be to take them to Greece and revisit the culture. Because now they're getting into, ‘oh, we're Greek and we've got this heritage’, yeah.

Shane: I think, you know, what I'm hearing also is that work at one age of your life, particularly when the girls were young, was a means to an end. And now it is about personal fulfilment, a little bit about how you can fulfil a lifestyle. But even the idea of Bunnings or a barista is about personal satisfaction as much as anything else. And would that be right?

Kiriaki: Yeah. I think once you see your kids are in a good space and they're travelling on their own path, you think, okay, I've done that job. They'll always be your children. I mean, one's 23, one's 20, but they're still my babies. And I think all parents out there know that you still support them, you still love them, you care for them, but they're on their own journey now and they're like, "Mum, have a great time when you're in Greece and what are you going to get me?" sort of thing. But it's my turn now. I have worked hard and I want to enjoy however long I've got on this Earth.

Shane: It's so great to hear you did the hard yards and with a single focus. And I think there's an element of what I'm hearing is you've got a plan without having a plan. So, you've got what you want to fulfil in the time that you believe you can physically do it. So when we think about the next few years, are you going to proactively look for this job at Bunnings or elsewhere?

Kiriaki: I do shop at Bunnings. I do go and spend a lot of time in their garden section.

Shane: Why don't you rock up on one of those green bibs...

Kiriaki: I should, I should. Look, the work stuff, yeah, look, I'm always on SEEK and I'm sort of checking stuff out, but I think I'm in kind of limbo.

Shane: Yeah. So when it comes to your super, so regular contributions from your full-time employer, what sort of tracking and interest do you have in your super at the moment?

Kiriaki: I've just looked at the last statement and this is why I thought, ‘okay, I've got no gig now, let's go see a financial planner’. And it makes more sense to me to see someone that could do something or give me that advice moving on so I can continue to enjoy my life now and not worry. And be able to, if I just want to work two days a week, I can do that. Why should I go and work three days and even just casual gigs. I might go do the waitressing. I might want to do the Bunnings. I might do both. I don't know. I was even thinking of doing a barber course. I could do that. I could shave heads and talk to people.

Shane: That's a big part of the job, talking to people.

Kiriaki: It is, yeah. And again, my daughter said, mum, you'll be standing all day. That's okay. I was standing for twelve years.

Shane: Yeah. So when you think about going to see a financial adviser or seeking some guidance on your retirement, what are the things that you're thinking about you want help with? Because when you go and see them, they'll say, "Okay, Kiriaki, what's your goals, what's your objective, what's the things that are worrying you?" What are the things that you think about there?

Kiriaki: For me, look, it's more about having a bit of that nest egg and asking them if I was to live to this age, how much would I need to have a decent lifestyle, something that would pay my bills. I've paid off my mortgage, so I don't have to worry about that anymore. So for me, it'd be essentially paying the bills and having enough money to go overseas.

If my daughters need to buy a car or... I know that they're going to have certain needs. I mean, I'm sure if they get married and if it's a Greek bloke, I'm going to have to fork out a lot of money for a big, fat Greek wedding, you know what I'm saying?

Look, it's more about having enough, saying to the financial planner, how much do I need to live comfortably and how much would I need if I was sick? And then it's also talking about those issues. If something was to unexpectedly happened to me, do I have to take out certain insurances, etcetera, to protect my home, which will go to my daughters. I don't want to see that go because I get sick or something happens.

Shane: Yeah. And I think you've made a really good point. So when I asked you that question, I didn't know how you would answer it. But you've really made a strong point for our listeners here is when people are thinking about getting help or financial advice, the main thing that a good financial planner will do is help you understand how you'll achieve your objectives, no matter what they are.

And everyone's objectives are different in pre-retirement, post-retirement, it's clear for you, it's about how do you fund a certain lifestyle and how do you provide for your girls that you've worked hard doing for forever. And so for other people, it will be different. And that's the sort of starting point for a financial planner to sort of understand what your objectives are and then work backwards from there and tell you is that achievable for one. And then secondly, to achieve that you need to do X, Y and Z, whether that be other sacrifices of other things.

Or in your case there's a chance they may say, ‘Well, you'll look like this with your continued process’ or ‘You are still young, you could still continue to work part-time.’ So I think it's a really good example of providing a planner with your goals. And it sounds like you've got a pretty good handle on what you want to achieve. And you touched on a minute ago too, which some people don't think about is what about when I'm not healthy and what that looks like and am I not going to be a burden on my family and other things? And that's something to factor in as well.

Kiriaki: I think absolutely, because we're all getting old. And sure, my heart says you're still 21 and you can still party. I found out I couldn't party in Greece.

Shane: Too many hills to walk up.

Kiriaki: After two gin and tonics, I was like, ‘oh, God, do we have to walk up that hill to the hotel?’ But look, it's just looking after my family. And when I get old that I'm not that burden and until I'm still able to walk, it's about heading off overseas and having experiences, and that's what drives me, because now it's my time. The girls know I love them, but, yeah, it's time for me. And they say, "It's your turn, mum."

Shane: They sound they're supportive.

Kiriaki: Oh, absolutely!

Shane: Yeah. And so when you think about all the things that you've experienced and you got a long way ahead and you got a plan to have a plan, which is great. Any sort of words of wisdom you want to leave our listeners with any sort of lessons that you've learned over the time about setting yourself up and getting through life?

Kiriaki: I think if you are receiving contributions into your super, my biggest regret is not doing the salary sacrificing because there are those benefits and people can look into that. That's my biggest regret, because if I'd done that, the total amount would have been larger, like I said it's about having that nest egg for the things, the unexpected things that happen in life and they do happen, there are good times, bad times but I think people struggle when they get ill or anything that happens in life that's kind of negative when you don't have that money to be able to go see a good doctor or to visit your kids or whatever it is...

Go get some financial advice, because I'm going to be doing that. And for the next chapter of my life, I guess life is like chapters, you raise your kids, they move on, and as a woman I'm like now, ‘what do I do with my life?’ And I've always been funny with money because for me I didn't have it for a long time and it went elsewhere and it went to the girls growing up and education and all that stuff.

Shane: But that were the things that were rightly important and I think even your comment around, you know, regret not making salary sacrifice, at the time you weren't in a position. So, I think it's an understanding, and really, when you talk about chapters, even when we talk about members of AustralianSuper, we know there are different segments in people's lives where super has a different role to play, whether it be savings or safety nets.

And then getting into pre-retirement is when they get really engaged. So, for you to be three years off 60 is generally where people are starting to seek advice. So, you haven't really missed the boat there.

Kiriaki: Oh, good!

Shane: But I think the point that's really relevant is in hindsight, you look back, but realistically, was it possible? And you look at everything you've achieved with your girls and the position you are with holidays and so on, well, things may not have changed. And so seeking advice, I think, is a really good tip. Whether it be full financial advice or reaching out to your super fund or others about certain guidance is really important because there's different things in your life that may not even be a major financial contribution that you need to do, but taking interest in your super, whether it be investments or you talked about the insurance that you have, is really important.

So I think that's a really good tip. So, Kiriaki, I've really enjoyed our conversation today. I'm a bit jealous about all the holidays that you're going on.

Kiriaki: You'll get there, Shane!

Shane: Yeah, maybe, my kids are a bit younger.

Kiriaki: So, you get it.

Shane: I'm at that stage, but yeah, anyway, we'll work through that. So, thank you for joining me today. No doubt that you'll make every post a winner because you've done that so far. So, thanks again and enjoy the next stage.

Kiriaki: Pleasure. Thank you, Shane.

Shane: Thank 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 people.

Quite often, AustralianSuper members will ask questions that are found through various channels. And mostly those questions are relevant for many members, and so therefore we thought it'd be great if we could share some of those questions and answers through the podcast. 

To help answer these questions, I'll invite a guest expert to join me on the podcast and today I'm very happy to be joined by Chelsea Fletcher, Financial Planner at AustralianSuper. Chelsea provides advice under the licence of Industry Fund Services and has been a financial planner for over 20 years. Chelsea, welcome.

Chelsea: Thanks Shane.

Shane: So the topic we're going to cover today, Chelsea, is downsizer contributions. So can you tell our audience what is a downsizer contribution and how does it work?

Chelsea: Sure. So, a downsizer contribution is a special type of contribution that allows eligible homeowners to add money to their super after selling their home. This is a once-off contribution, and can only be used once in your lifetime. You can use the proceeds to purchase a smaller one to downsize, then contribute the difference into your super to boost your balance and increase your retirement outcome. 

You can contribute up to $300,000 from the proceeds of the sale into your super. The amount is per person, so a couple can potentially contribute up to $600,000 in total. Your contribution is accepted as a personal contribution, no taxes payable and the amount will not count towards your non-concessional contribution cap.

The contributions can't exceed the total sale price and I will note that all contributions need to go into super accumulation account. If you're a person who has a pension account, you will need to open a super account in order to be able to make this contribution.

Shane: Great. Thanks Chelsea. That's a good tip. So who's eligible to make a downsizer contribution into their super?

Chelsea: Okay, the people that are eligible, you need to be 55 years and over. You have to have owned your home for at least ten years. The home must be in Australia and it can't be a caravan, a houseboat or another mobile home. The proceeds from the sale of the home must either be exempt or partially exempt from capital gains tax. So under the main resident exemption, so it had to be the family home at some stage.

Unlike regular contributions, you don't need to meet a work test or age restrictions when making a downsizer contribution. This is particularly beneficial for retirees or people who have scaled back their work commitments.

Shane: So you referenced earlier, Chelsea, that you have to be 55, if you're in a couple, do both people need to be over 55?

Chelsea: Correct. Yes, both have to be over 55. But that's actually a really good segue into the next area I was going to talk about in terms of ownership. So the house can actually, or the property can be owned by one spouse. And assuming you meet all the other requirements, you can both make the downsizer contribution of up to $300,000. 

A couple of more things to make note, you must make the downsizer contribution within 90 days of receiving the sale proceeds, and you need to notify your super fund about the contribution's eligibility. You can request an extension of time to make the contribution, for example, where the delay has been caused by a factor outside your control, such as ill health or a death in the family.

However, an extension of time won't be granted to allow you or your spouse to meet the age requirements.

Shane: Great. Thanks, Chelsea. So, what are some benefits of making a downsizer contribution?

Chelsea: Look, there's many. But obviously for the older Australians, it's an opportunity to get money into a concessionally-taxed or a tax-free environment. It's a once-off opportunity, as I previously mentioned, to really allow people to significantly increase their super balance beyond the usual contribution limits and age restrictions, especially for older Australians looking to enhance their retirement savings. 

It allows people previously locked out the ability to start an account-based pension, like an AustralianSuper Choice Income account with these new super funds, and then to be able to draw a regular income to help provide a more comfortable lifestyle in the later years of retirement.

Shane: I think on that point, Chelsea, as a financial planner, I'm sure you quite often see people who have spent a lot of their savings in life paying down a mortgage and their house is actually probably their biggest asset.

Chelsea: Oh, definitely a lot. And especially people who, like I said previously, locked out, people that are getting maybe 65, 66, 67 before the rules changed and their retirement savings was their home. Superannuation, as we know, hasn't been around for most people's working life. The older Australians, that is. 

So, a lot of people use their home as a way of being able to save partially for their retirement. Maybe they're planning to downsize at some stage and the issue was being able to then draw a regular income. There's not many products out there that allow the benefits that superannuation and super pensions have.

So I think it's so much more inclusive for a lot of Australians now to be able to put money into super, whereas before it was seen for people, older Australians that weren't able to, they were being locked down and they felt excluded from these benefits. They're missing out on that tax-free earnings. Being able to be in such a diversified fund like AustralianSuper, where you've got $300 billion, you've got the ability to draw a tax-free income, you've got the flexibility to access a lump sum if you want, whereas when people were downsizing, they had this amount, they had to then look at options to be able to invest it outside. And maybe it's not as beneficial as super can be.

Shane: So obviously, you've talked about the benefits. Are there any other considerations that people need to think about?

Chelsea: Yeah, sure. Look, the downsizer contribution, so as I mentioned, it's a non-concessional or after-tax contribution. And it doesn't count towards the contribution cap. It won't affect your total super balance until it's recalculated at the end of financial year. These are complicated areas, but look, for most people a total super balance, it just means that if you've got over a certain amount, which currently the standard cap is $1.9 million, that you can no longer contribute beyond that.

So this is not part of that cap, so for some small percentage of people, this can be a benefit. It's not exempt from the transfer balance cap, which means that the transfer balance cap is how much you can have in a super pension environment. And that's also currently the standard cap is $1.9 million at the moment. However, some people have different caps depending on if they started a pension previously. 

So, the downsizer contribution, it doesn't matter what you have in the super environment to be able to make the contribution. However, if you want to transfer that to a pension account, you need to stay within that limit. So look, for most people, this is not an issue. Everyone has their own transfer balance cap and total super balance limit, and definitely the one place to go, I mean, obviously we'll talk about this, about getting advice. The ATO have all this recorded. 

If you have access to your MyGov account, you can actually see what contributions you've made to super. You can see your balance from the previous financial year. You can find out what your total super balance and balance transfer cap is. So, it's really important to make sure, beyond downsizer contribution, any contribution, if you're not sure what you can do, definitely the first place to go is MyGov. So I mentioned there's no age limit, so it doesn't matter how old you are to be able to contribute.

Shane: So, quite often members will ask questions on any strategy that, "Will it impact my Age Pension eligibility or other government benefits?" How does downsizer contributions fall into that category?

Chelsea: Yeah, look, this is, I think, the biggest area that people want to take into consideration before they do anything and that the downsizer contribution may affect your Age Pension eligibility through the asset test. So, obviously for older Australians who are not receiving any government entitlements, it's not going to impact, but if you are in a position where you are currently receiving Centrelink, then it will impact that you're unlocking an asset. 

In terms of eligibility, your eligibility to Age Pension depends on firstly your age and then it goes on the income or asset test. So, whichever one affects you the most is the one that Centrelink use. Your principal home, it's not included as an assessable asset for Centrelink purposes. 

However, as I was saying, when you do sell it, it will count the amount that you don't use to purchase a new home will count for Centrelink and that could impact your entitlement substantially. So the proceeds from the sale, if they are going to be used to purchase a new home will not be counted for up to 24 months. 

However, they will be deemed for income test purposes. If you put this money into superannuation, it will count straight away. So does that make sense? So, essentially we're in a position where if someone sells their home and purchases, let's say they purchase another one and they unlock $500,000, for example, and they're a couple, they could potentially get that into superannuation. 
But that amount, that $500,000 will count as an assessable asset for Centrelink. And that for most people, could lock them out of receiving Age Pension entitlements.

Shane: So it's clearly a consideration. But also, you touched on earlier about the age limit. So obviously Age Pension availability and superannuation and the ability to make this contribution. There's varying age bands, so there's a whole bunch of different age factors we need to think about.

Chelsea: Definitely. And look, I think that the great thing, like I said, there's no limit to how... You can implement this strategy at 85 or way down the track. So, for a lot of people they want to keep their existing home, but they also don't want their lifestyle income affected and so this is a great way that potentially some people can use their superannuation to be able to generate an income for the first few years and then downsize. 

So, they've reduced their assessable assets for Centrelink and then they've moved up again, but that still doesn't mean they don't qualify for some entitlement. So, look, everyone's situation is different and this is where it's really important to get some advice by a professional like me. At least go to the ATO and find out what your limits are and get that information to begin with.

Shane: And finally, the contribution is called a downsizer contribution. So to be eligible to make a downsizer contribution after the sale of the home does someone have to buy a new home and if they do, does it have to be a smaller, cheaper residence?

Chelsea: Good question. So, no, you don't need to purchase a home. So, to be eligible you just need to sell your home and follow those requirements, the ten years and put the money in within 90 days, et cetera and have it be your family home at some stage. But no you don't need to. 

And the other thing is you can purchase a home that is more expensive than the one you actually sold to still qualify. So, in a very unique position where people have money outside super and they are qualifying for the downsizer and they want to purchase a more expensive home if they've got the funds they can actually do that too. So yes, unique, but possible.

Shane: Great. Thank you. So, Chelsea, thanks for joining us. As you've explained really well, there are opportunities in downsizer contributions, but you've also highlighted the need to seek information and advice and you've called out that the ATO website has a range of information on downsizer contributions, eligibility criteria, and obviously seeking financial advice for something like this would be really important also.

Chelsea: Yeah, look, definitely, superannuation can be complicated and this particularly has certain requirements. I will say also that if you are looking at making this contribution that you do need to notify the fund, but use a special form. So, we actually have a downsizer contribution form that you need to complete. So we make sure that the fund allocates it correctly and processes it correctly under the right contribution limit.

Shane: Great. Thanks for joining us today, Chelsea.

Chelsea: No problems. Thanks 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. 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.

AustralianSuper has the privilege of 3.2 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 Warren Morrison, a member of AustralianSuper. Welcome, Warren, and thanks for joining us.

Warren: Thanks for having me.

Shane: So, Warren, before we get into super and retirement, can you tell our audience a bit about yourself?

Warren: Well, I'm 65 years old, and I had the opportunity to take early retirement, having previously worked for the state government. And they were handing out packages at the time. And I put my hand up and said, "I'll take one of those", because I think they wanted to get rid of a few oldies that were there. 

Before that, I already started preparing myself for my retirement and back in 2017, I did a course to be a celebrant, to marry people. I was always an MC. And then one of my mentors, who was marrying all these people said, you'd be great as a celebrant.

And I did my nephew's wedding. And when I saw that celebrant, I went, "Hell, yeah, I can do much better than her." Being Italian, they were all asking me in Italian, "This one, testa dura" which means she's got a hard head, this celebrant. And I'm going, "Mhm..." and they all said, "Warren how come you not do this?" 

And I went, “okay, just give me five, and we'll discuss it”. So, I went back to college, got that while I was still working full-time. And then I started doing weddings. So that was my preparation for my retirement, because I wanted something to do in my retirement.

Shane: Just taking a step back prior to the retirement package and the transition to the celebrant role. So what did you actually do? Tell us a little bit about your career.

Warren: My last position was Executive Assistant to the Executive Director of Engineering for the state government. So, I had one executive director, six directors and 210 staff that I had to look after. So it was a pretty big job. It could be stressful at times when you're looking after them and then dealing with the minister's office as well, which is more stressful, like getting your boss to get an appointment with one of them. 

And the person that I am, I would always talk to them in the lift when I worked at Spring Street, like, because I would say, "What are you having for lunch?" And it'd be Minister Win or Jacinta Allen. And they'd go, "Uh, salad sandwich." And I'd go, "Oh, good, so am I." Or once I said to them, "Have you been to the workers floor?" 

Shane: Yeah, right. 

Warren: I watched my boss just slide down the lift. She nearly hit the bottom, and they went, "What's the workers floor?" And I said, "Level 20." And they go, "Okay." So lo and behold, up they come. Not going to my boss's office, coming to me!

Shane: Well, that's your job. 

Warren: I just went, big gulp. And then they all go, "Um, yep, here we are, so take us around." So then I had to take them around. So it was good.

Shane: So, were you in government your whole career?

Warren: No, only 13 years. Before that, it was private enterprise. I worked for the Trading Post, it was called Census in those days. They owned the Trading Post Paper. And prior to that, I worked for Rupert Murdoch at the Herald Sun. So I looked after a section there. And then prior to that was Westpac for 20 years. That was my first job. 

Shane: Yeah, right. 

Warren: In Westpac.

Shane: So first job, but you were there for 20 years?

Warren: First job, yeah, straight out of school. Before that, I was doing a paper round, chemist round, I did every round, but worked in the local supermarket. And then I remember at school I was pretty good at commerce. We had a subject called commerce. It was all on banking, so I remember applying for the job, and then they're saying, "Wait till you finish your school, and if you pass, come back." And I remember that I took my mother with me. 

Shane: What did you do? 

Warren: I was very embarrassed, and she made me go and have a suit. And if you can remember, if you're this old, ‘it's a great bag of fruit, it's a Salvatech suit’. So that's where she took me. And I looked like a clown when I think about it. The lapels on the suit were bigger than, like, flaps on a plane, they were huge. And then I was in the interview, and here's all my friends in jeans and just a jumper, and here I am with this tie that nearly came right across my chest. 

And he came out and he goes, "You." My mother went in first. I trailed behind, and he said, “the rest of you can all go home”.

Shane: You made the effort.

Warren: Well, he said, "You look like a banker." 

Shane: Yeah. 

Warren: So, sitting there and I said nothing. And my mother said everything. And he did ask the question, can he speak? Because he'll need to speak for this job.

Shane: Your mum can't come to work with you.

Warren: Yes. And then he did tell me later, I think about three months into the job, he goes, "You know who got you the job?" And I went, "Who?" And he goes, "Your mother." And then he said, "We really wanted to hire you because we knew you had parental care, that they cared enough to come with you." So, thanks, Mum. She's up there doing whatever she's doing, but yeah, so that was my first job and I lasted 20 years there.

Shane: Yeah. I'm not going to tell you my full story about my first job, but there is a common theme that I couldn't go for the interview because I didn't have a shirt or pants to wear and had to wait for my mum to come home to take me shopping to buy, that was the era. So you started at Westpac... 

Warren: Yes. 

Shane: And you said it was your first job that lasted 20 years.

Warren: Yeah.

Shane: What sort of roles were you doing within that 20-year period?

Warren: Oh, I started off, as it used to be called, a batch clerk, which meant you were the slave, literally, for all the people in the bank, you had to make their tea. I had a list on the wall that Fred had white tea with a teddy bear biscuit and you had to make it. 

Then they'd give me petty cash and I'd go and buy the toilet paper. It was so embarrassing, especially with your friends walking past you, going, "Ha ha ha, you work in a bank..." And I've got toilet rolls in my arms. Or they played the jokes on you straight away, which they give you all the ledgers, in those days, no computers, so it's ledgers. 

"Warren, can you take this down to the post office and get them balanced?" And I was like, "Yeah, yeah, okay, I've got to get these balanced, got to get these balanced..." And I'd line up and they could tell straight away, people in the post office going...

Shane: Here's another one. 

Warren: Here we go. And I'd go, "I'm from the bank and I've got to get these balanced." And they'd go, "Son, son, son...." Yeah. And then I'd go back or there'd be a note on your desk, "Warren, can you ring this number really urgently, it's Mr. Lyons, as in LY." I went, so you dial it and it goes, "Good afternoon, Melbourne Zoo." 

And I did say once "Is Mr. Lyons in?" Then they went, “oh son”, and they hung up. But then I did it to all the new recruits too, after I progressed. 

Shane: Yeah, you earned your stripes. 

Warren: Because then you progress in the bank. And then I became number one teller. Cha-ching. 

Shane: Yeah, excellent. In the city where you were at?

Warren: No, I was in Toorak, in the village. I had all the fancy schmancies. I had yes, everyone, movie stars. I held Liberace's hand as he went shopping. Sir Eric Pierce, if you know him, he was lovely. So we had everybody. We had the Grosby's Footwear people, which were lovely. And I used to like petting Lillian's coat because it was full mink and we did a commercial there with John Cleese, so I met John Cleese.

Shane: And then did you continue into that branch land?

Warren: Yes, went into that, then went into PR. They sort of saw the potential in me, so I did a bit of PR and advertising for them. From there then I progressed to credit card division. In the credit cards, I was an officer that went out to all the businesses and determined in those days whether they could actually have an EFTPOS machine when it first came out. 

Shane: Okay. 

Warren: So you had to have lots of transactions before you got that for free. So I had to work out whether you could or not. I went to companies like BHP.

Shane: And they passed the muster? 

Warren: That was like back in time. They had a tea lady and she took about an hour to get us that tea. 

Shane: Yeah, okay. 

Warren: It was like Faulty Towers. But yeah, I signed them up. So you had to sign them up. And then from there, when I left there, then I went straight to the Herald Sun and looked after their classified section. 

I had a stint at Legal Aid as well, in criminal law, that's an eye-opener. So where I looked after a barrister and I had to type all the case notes for each case. So, yes, you have to type verbatim what they say... There's a few words I didn't know how to spell because the client was, they'd say this word and you'd go, how do you spell that?

Because they'd done some act and I had lots of funny, funny times there, too. I seem to find the funny things in everything.

Shane: Tell you what, just hearing this story, your career, you could write a book.

Warren: I'm planning!

Shane: There you go. 

Warren: And now with the celebrancy, I've got enough for a book of all the weddings that have gone wrong. Not on my half, but like crazy things that happen with weddings. And now I do funerals as well, there's even more crazy stuff there.

Shane: Wow. Warren's weddings and funerals for a book, nice, I like it.

Warren: Yes, it is! 

Shane: Okay, I could talk about your career forever. But anyway, so let's go back to, so you've been offered the package for retirement. So before you took the package and we'll come back to what that looked like and how that's set up your retirement. Were you thinking about retirement prior to that?

Warren: Yes, I've always thought about retirement. I didn't want to be like everybody else that I saw growing up in your family, your mum's friends or uncles and aunties and even my own father. When he retired, he just drove us to insanity. More so to my mother, because he didn't have anything to do. He'd worked worked since he was 14. And I can honestly say that I never saw my father have a day off. Never.

He was up at six and then we wouldn't see him till six. So he worked nonstop. But he didn't have anything else in his life except us and annoying us and especially annoying my mother. And my mother would ring and say, just, can you come over and talk to your father? That was after I left home. And I go, “what do you want me to say?”

I go, dad, what are you doing? And one day I was over there. She goes, "Watch, just watch your father, watch what he's doing." Out to the clothesline, I'm thinking he's bringing in everybody's clothes. He just took his own and he put his own, folded it all up. And I go, “what about Mum’s?” He goes, "She got legs." And then all of a sudden he has lunch. And my sister made this lunch for my mum. 

Meanwhile, my poor mum was going through chemo and lots of things. He sat at the table and I go, “Dad, what are you doing?” Goes, "You snooze, you lose." So he ate her lunch. 

Shane: Ate your mum's lunch? 

Warren: Yeah, literally. So I just looked at him and thought, oh, what am I going to do? I don't want to be annoying anyone. Or I mean, we did try to get him delivering the pamphlets. Disaster. He took the dog with him. The dog got off the lead, pushed him over. Pamphlets went everywhere, so everybody in the street had to come and help him, pick him up and then take him back home. So we needed an outlet for dad, so we eventually found one.

Shane: So when you were thinking about, what do I do after retirement? Pamphlet delivery wasn't one of those things?

Warren: No, no!

Shane: So sounds as though when you were thinking about retirement, you were more thinking about, how am I going to keep myself busy? What about the financial side of supporting yourself in retirement? So I'm assuming you didn't know early years that you're going to get this package. So what was your sort of plans around funding your retirement prior to that? 

Warren: I think for me, that was the fear. There's a fear factor for everyone that's getting closer to retirement is, how am I going to live? How am I going to support myself, do I still have the same lifestyle that I have? And I wanted to make sure that I did have that. So again, in 2017, when I got encouragement that I could do other things besides MC-ing functions, I started to think about in a literal way, like, how am I going to support myself?

Because I'm thinking, I'm going to be 67. I'm on the pension. So, of course, what does everybody do? You log on, you have a look, and you go, oh, that's not enough for underpants, really. So I went, what can I do? I've got to be able to do something to have that cash flow. So that was my biggest fear.

And then when the opportunity arose to take the package, I mentally worked it out straight away that I've got this amount of time before I'm 67. Because I was going to retire right on my birthday. When I turned 67 at 12 o’clock that afternoon, I was handing in every badge, every key, every computer that I had, because I had two, believe it or not, to work in the government. I was just going to hand it all over and say, “gentlemen, ladies, have a lovely time, adios amigo, I'm out of here”. Because I was not going to work one day past 67.

Because I had other colleagues that were like, 72, 75 in the government and they're still working. And I kept saying to them, why? And, I mean, everybody's got their own story. There was a lot of really sad stories, like they'd had to remortgage their home because of their children, stuff like that. And that really was very upsetting to hear. Whereas I was fortunate, I owned my own home, so I was lucky that I was able to do all that in that time. So, yeah, when that came around, I mentally did a calculation and to this day, I'm still living off my package. I haven't touched my super. 

Shane: So prior to the package and you’re thinking about retiring at 67 and you looked at what you could get off the Government Age Pension, had you taken any real interest in your superannuation, taken any action, seen a financial planner, any of those sort of things?

Warren: Yes, I saw a financial planner before I even got the package. And unfortunately, at the time, it was like a lottery. You could put your name in for the package, but it wasn't a surety that you actually got it.

Shane: So you saw the financial planner once you knew you were getting a package. But prior to that?

Warren: Even before, I said, I need to see somebody who's going to help me because I didn't know what do I do with this super and then what do I do with the package? How does that all come together? Like I said, I was with another financial institution and he advised me about AustralianSuper, that it was the best for me. And we sat down, we spoke about a lot, might have helped that I married him and his wife. 

Shane: Right. 

Warren: That was a good omen. 

Shane: You provide professional services to him and vice versa.

Warren: Correct. So he helped me out immensely. And he said, “listen, wait till you get the package. And then what we'll do is we'll amalgamate it all together, we'll put it all in AustralianSuper. I'll look at different avenues for you”. And I said, “great, that's great”. But the scary part there when you've retired is you've got all this money in super. Now I've got the package and it's adding up to a really good amount of money. 

But they wanted me to actually post it to AustralianSuper. I couldn't get him to do it. And then I got one phone call saying from this institution, apparently, that we need your bank details and blah, blah, blah.

And I said, oh, that's okay. I said, Let me open my computer. I go, I'm looking at an email from you, and it's all there. So how about you read that email back to me. And what I got back was, "I don't have to read that to you." And I go, "You know what, you do, read it back to me."

And then I hung up. Then I rang this institution and they said, no, we haven't called you, nothing. And I went, oh, my God, I could have fallen into that trap. Like these scammers who think you're 65 and you look 65 and you're not quite with it, not this black duck. I was right onto it. And then I knew that I nearly got scammed out of all that money. So for all those people out there, just be really careful. Be astute with who you're talking to. And if they can't read it back to you, then hang up. So, yeah, it's a warning to everybody.

Shane: It's a great tip not only to be aware of who you're talking to, but even with super, what we commonly see is people not understanding or taking ownership, that it's their own money. 

Warren: Yes. 

Shane: Because they haven't seen it, they might be a little bit less engaged in that conversation. So well done and it's a good tip. So you took the package just in relation to super, so you rolled your money over to AustralianSuper. So you get to that point of retirement and you've taken the package. And you mentioned a minute ago that you're still living off the package.

And so within your superannuation, with AustralianSuper, do you have it as a pension account or is it still sitting in the superannuation account where you're not drawing money from it regularly?

Warren: No, well, I'm drawing money from it because the package is in there as well, so it is practically...

Shane: So you're getting a pension account and when are you getting paid, fortnightly or monthly?

Warren: Fortnightly. And it was good because when I was talking to that previous institution, you couldn't find your money, you couldn't do anything. And as he said to me, “I've set my mother up who's older than you, and she can work it, so you should be able to work it”. And I did. And plus, the communication for me, just ringing and getting somebody on the other end to talk to me about my account never happened before. It was like, “no, you have to fill in all these forms and fill this out”.

I went, “I can't be bothered, so you don't worry about it”. But with AustralianSuper, I've spoken to them about three times, and they've reassured me, no, no, that's okay. You've done that right. And because I was petrified that they never got my money. So that was the catalyst for me to say, “wow, this is great for me”.

Shane: And so quite often, people put the money in a pension account, an account based pension, in our case, that's called the Choice Income Account. And so the amount that you chose to draw down on a monthly basis, have you altered that over the years or has it been the same amount?

Warren: I started off with a smaller amount, and then I knew that I just needed that little extra, so I just bumped it up a couple of hundred dollars and now it's perfect.

Shane: So, you're feeling comfortable that you're spending, living the life that you want to live and you mentioned that your balance has still been growing in that particular time of the drawdown?

Warren: Yeah, I still fly business class, everybody.

Shane: Good on you, good on you. We'll come back to it. We'll get back to it. Come back to any holidays you might be going, So, going back to the early conversation around when I asked you a couple of times about retirement. You didn't go down the pathway of the money side until later on when I really probed, because it seems to me you were really thinking around that next stage of your life, around what I'm going to do.

Warren: I used to be a national champion roller skater. I've come back to that as a judge. They took me off to Perth to judge nationals. And I was on the whole panel and did the big wave when they mentioned my name. And there was a couple of young skaters who wanted to learn judging, and a friend of mine was there, and they said, "Girls, you're sitting in the presence of skating royalty." 

Shane: State champion. 

Warren: And then I went, yes, ten times state champion. And I went on and they go, "That's enough, you can stop now." So I've come back to that, which is another outlet for me as a retiree. So I've got my passion back after 35 years out of the sport.

Shane: But you talked a bit about before the impact of how your dad was, retirement, and so it's that influence around your activity and focus that's played a part in your mind.

Warren: Heavily, and watching your uncles too, they worked at a job, and now I can see it doing funerals. Like, I might do a funeral for a guy that I did one not long ago. He was 62, younger than me, which really upsets me. And then they go, he never fulfilled anything in his life. He went to work and he went home, went to work, and all his plans that he had, he never did. Because, again, the financial situation, like, you have to sit back and think, well, what's more important, your life or your job? And for me, it was not the job anymore.

And also becoming a grandfather was another catalyst... to the little fella. It was a whole bunch of things, but it was mainly that I need to live my life now. And the financials, like I said before, that's the thing that gets stuck in your brain. How am I going to survive? For me and it's no shame. I was on a very good package. I mean, a good salary. I had money. But I thought, when that goes, what do I do? But then you have to prepare. So the biggest thing you can't do, well, I'm saying for myself, is retire and still have a mortgage. That's very hard. I know I watch all the commercial that say, you've got equity, you can do this, you can do that. 

But for anybody out there they really need to be able to pay that big debt, that's your biggest debt in your life. Pay that off and then you'll reap the benefits. 

Shane: And that was a focus for you in your working life, to reduce your debt? 

Warren: Get rid of this camel or whatever they call it on your back.

Shane: Yeah. So obviously you focused on paying down your house and that is a major asset. If you hadn't have received a retirement package, do you think your retirement would have been different based on living off your superannuation and the pension or do you think nothing would have changed?

Warren: Nothing would have changed because I had that focus that, come 67, that's it, that's doomsday.

Shane: And you're okay, that you think you would have been able to fund your retirement in the way that you're living?

Warren: Yeah, because I had all these other activities going on. I've even been offered to MC some shows, which I did, and also sang in them. And so there was little gigs that were coming in that I thought, wow, this is good. And the MC part, people don't realise that they do have talents, but they probably haven't tapped into it. 

I was working at Westpac and one of my colleagues said, "Warren, you're pretty good with people. Can you MC my wedding?" And I went, "You gotta be kidding me, MC your wedding, I don't think so..."

So I researched it. I thought, I can do this. So I researched it. And you know what? The first one was nerve-wracking. After that, people saw me and said, oh, so I started doing that. So that was a little bit of income on the side when I was actually working.

Shane: But was it more about the enjoyment you got from the MC at that stage. Then you worked out maybe it can be revenue stream as well?

Warren: Yeah, correct.

Shane: You referred earlier about being healthy in retirement. You look like a pretty fit guy. What sort of things do you do to keep yourself healthy now?

Warren: Well, now I've made it--

Shane: Apart from roller skating. 

Warren: No, I haven't put the skates on, because, funny thing happened, again I was thinking, what am I going to do in retirement? So I went back to ice, because I was originally an ice skater. So I bought the boots, had it fitted, sat there. And the gentleman said to me, "So, you're a bit.. umm" I said, "Old, is that what you're thinking?"

Like, this is not my first rodeo. And I said to him, "I just want to know if these boots are going to be okay, because I'm really working on a triple." And he went, "Triple?" I went, “yeah, I'm ready to go”. Because his daughter was a skater. 

Shane: Yeah, right.

Warren: And I said, no, mate, I'm hoping I can stand up and just whizz around the rink. So I started skating. Not too bad. I'm thinking the old boy is still landing a few jumps. 

Shane: Still got it. 

Warren: She saw it and high fived me and she said, do one more before the lesson. That is a big mistake in skating for me.

Shane: Yeah.

Warren: As soon as I went up in the air, I knew this was not going to land pretty. So I landed in the splits, and that was the end of my ice skating career.

Shane: Right, okay. Well, they say a man's got to know his limitations and you worked it out!

Warren: Another bit of sporting prowess in your retirement. But getting back to that, I try to swim every Tuesday and Thursdays. 

Shane: Yeah, okay. 

Warren: And walk lots.

Shane: And clearly you're active both physically and with your mind and your activities. But have you thought about what the future might look like if your health did decline or other things, how that might impact your lifestyle and how you might fund any change in lifestyle?

Warren: I think the shock for me was finding out that I was a diabetic, but it's only type two.

Shane: Is that recently?

Warren: No, I've had that for a while now. I used to stir my mother, who was a type one diabetic, and then most of the family were diabetics, but I'd escaped it right up until about three years ago, so I could have a bag of lollies in front of them and really stir them up. 

But then it happened and I got it. And now you do have to look after yourself, and you got to watch your weight, especially now with acting and going up for commercials. They ask you your pant size, your underpants, they ask you everything, shoe size...

Shane: So just to close this out, Warren and you talked about how early, I guess one of your tips was for people to try and pay off their home before they retire, where possible, but any other words of wisdom you want to leave our listeners with about preparing or living in retirement?

Warren: Yeah, in hindsight, just think about your retirement seriously. And if you haven't got anybody else to feed off, find someone and ask them the question. Or find somebody who is already on the pension and ask them how are they doing it to get some knowledge. And for me, I got lots of advice from everybody that wasn't sinking in. So what I did was I rang up Centrelink and I made an appointment. 

Shane: Yeah, great. 

Warren: I said, I need to talk to somebody because I don't know what I can do. And I sat down with one of their officers and, yeah, she set me straight, this is what's going to happen when you go on the pension. I went right. Good. Now I know. Now I'm set. So it's a matter of knowing what you can have and what you don't have, and then trying to work out what you're going to do in between. Like, we've got another friend who wants to retire, he's a builder.

And I said to him, he said to me, "What advice you got for me?" I said, "Listen, you only want to work one day, two days, ring around the nursing homes and see if they need a maintenance man." So you've got to think outside the box. The people that just become couch potatoes are really sad to me because they're the ones that I'm burying. And it's like that old adage, if you don't use it, you lose it. So you got to keep active, grab it with both hands and run with it. That's my advice to everyone. 

Shane: Yeah. And I think that word retirement for you is living quite a full life, post-work life.

Warren: Well, they all say that I'm busier now than when I was working.

Shane: And that's great. And we hear that bit, and I think just your comment or your tip about seeking information, so knowledge is king and you referenced, you know what you need to do now. And so that's really important for people to understand, is learn and understand what that means for you, because everyone's retirement and everyone's journey is very different. So, Warren, I've really enjoyed our conversation today. So, Warren, thank you so much for your time. 

Warren: Thank you for having me!

Shane: And take care. 

Warren: 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 people.

AustralianSuper has the privilege of 3.2 million members trusting us with their retirement savings. A really important topic for many Australians is the Government Age Pension. And to cover this topic, I'm joined by Steve Lambou of Industry Fund Financial Services.

Before we start, Steve, and ask some questions on Government Age Pension and how it works, I just want to point out to our audience that the points we're going to discuss today are accurate at the time recording, which is September 2023 and may be subject to change. So, Steve, let's get into it. So can you tell our audience what is the Government Age Pension?

Steve: Well, the Government Age Pension is essentially the main income support payment for people who've reached Age Pension age. It's a safety net to help eligible older Australians pay for their basic living expenses. Fun fact, 62% of Australians over 65 years of age receive either a part or a full Age Pension.

Shane: So you use the term safety net then, so can you just explain what that means in relation to the Government Age Pension?

Steve: So the Age Pension currently for a couple, it's $802 a fortnight for a member of a couple each. So that's if they're getting the full Age Pension. Especially this year, we've seen inflation just go through the roof and last year. So, that's why we say it's a safety net. Is that going to give someone a very lavish, comfortable lifestyle? Absolutely not. But it does give someone enough income just to meet their essentials.

Shane: And obviously, the assumption of people saving for their own retirement, and if they are unable to do so, or they spend their own personal retirement savings, the Government Age Pension is there.

Steve: It does kick in. And we find that quite often with a lot of our members here, they might have a certain amount to retire on and they're doing pretty well. And then they'll say, and this comes straight out of the members' mouths, they will say, "I'm not too fussed if my super is not going to last till 98 years of age, because I'll have the Age Pension to act as a safety net when I'm 80 years of age", for example.

Shane: So quite commonly, people ask us, and I'm sure you, as a financial planner, how am I eligible to receive the Government Age Pension? Can you sort of talk us through eligibility?

Steve: There's a few criteria for that. So, a common myth is people think they reach a preservation age. And finishing up at work. So, obviously, the superannuation rules and the Age Pension rules are different. People think as soon as they retire, it's almost their God-given right to get an Age Pension. And they sometimes find out the hard way there. First things first, you have to reach an Age Pension, a qualifying age, which we term the Age Pension age.

We'll get to that in a moment with the details and specifics. Residential status, so, generally speaking, you need to be a resident for at least 10 years in Australia, and five of that needs to be consecutive. And then there's a means test as well. So, again, in Australia, we operate under a means test for Centrelink, where your assets are assessed and also an income test is assessed. What you find is whatever gives the lowest amount, that's the test Centrelink will apply.

Shane: Right. So, basically. The means tests applying to what your assets are. Does that assets include your house?

Steve: It doesn't include the house unless it's over 2 hectares. So I had one client live in Proserpine, nice part of the world, just near Hamilton Island. I helped him with his Age Pension application a few years ago. You would not believe, his property was 2.01 hectares. And he did ask me, "Do we need to tell them exactly what it is?" And I said, "We need to tell them." So, yeah, that's the only one I've had that's ever been over 2 hectares.

Shane: We might keep on the theme of the assets test. What are some examples of assets that are included in the test?

Steve: Look, some of the assets, they pretty much include pretty much everything. But there's a car, for example, there's home contents. They are quite lenient with home contents and how that's assessed. I've had many clients over the years give their insured value. So some people will say we're insured for $250,000, for example, and they've given Centerlink $250,000. What's happened? They've just done themselves of $200-300 a fortnight.

So, Centrelink will accept $10,000 for a couple. For a vehicle that's assessed as well. But that's generally at trade-in value as well. So it's commonly trade-in value is assessed. Financial assets, as we mentioned, property is not assessed unless it's over that 2 hectares, investment properties are assessed.

So we get that commonly asked as well. Investment properties, money sitting in the bank is assessed, shares, superannuation. Really important, it's not assessed if you're under Age Pension age, your superannuation and that's in the accumulation phase. As soon as you convert to an account based pension, which is Choice Income for us, that is assessed as an asset. So that is a real strategy that we focus on with our members. Bear in mind that super won't be assessed.

Shane: When we look at the value of an asset, how does that affect your Government Age Pension? So you talked about the things that could be valued and how they might be valued. You used the example of household content. So what's the impact of an assessment to your Government Age Pension?

Steve: Well, as we mentioned, there's a means test for your assets and also they'll look at the income test at the same time. Obviously the assessment of all those things is going to have an impact. There is cut off thresholds so there's an amount that Centrelink will assess and say if you're under that threshold you potentially get a full Age Pension.

If you're over that, there might be a reduction. So you might get a part Age Pension. If you're well over that there's also a cut-off amount. So they'll assess all those assets that we spoke about. There's also an exemption under the asset test as well. So as we said, the family home's exempt unless it's over 2 hectares. So, someone residing in Brighton, $15 million home, believe it or not, can get a full Age Pension.

Shane: Okay.

Steve: Doesn't sound right, does it? But it is possible. Superannuation accounts that we mentioned under Age Pension age. Funeral bonds, so there's limits there. So people can pre-purchase funeral bonds to pay for a funeral. At the moment it's $15,000 a limit. But that's obviously be subject to change.

Cemetery plots. So when we run seminars, people ask this all the time. You could potentially own half of Springvale crematorium worth $15 million and still get a full Age Pension. So that is uncapped as cemetery plots. But generally people have one.

Shane: So there's a lot of different elements of assets and assets tests and we'll talk a bit about where people can get some help from later. So we've already alluded to income tests. So can you give us an example of what's involved in the income test?

Steve: Well, the income test, it's a little bit more complicated for clients, so it does include employment income as well. And we'll touch on a few things there where people choose to work past Age Pension age. But the income test, so, employment income, it might be part-time, it might be full-time income. Financial assets. Now, financial assets are treated quite differently.

I think Centrelink just to keep things simple and make things fairer I guess for a lot of people, they don't actually look at what your income is. Say you've got $300,000 in shares or in the bank account. They just don't have the resources to actually look at each individual's unique situation and say, "Oh, Shane Hancock's got $1,684 in dividends this financial year." They can't do that.

So what they do is they'll say, and it falls under Deeming. So Deeming is, it's a set of rules used to work out income earned from your financial assets and it is just based on financial assets.

To give you an idea, we'll just say for a couple, the first $100,200 at the moment, again, this is subject to change, is assessed at earning 0.25%. Anything above that is assessed at 2.25%. So then Centrelink will work out an annualised amount and then convert it to a fortnightly income.

Shane: So you could be earning multiple times that, but you're only being assessed at earning the amount that you just referred to.

Steve: Correct, it is quite generous. Centrelink have said they've come out and the government's come out and said last year in the budget, they won't change that. So those deeming rates are four or five years old when cash rate was almost down to zero. So as you know, the cash rate's a lot higher than that now. So that is likely a change in July of next year. But there's no guarantee of that.

Shane: Yeah, so that's in relation to income earning on assets. What about employment?

Steve: So employment income is added onto Deeming. So that's assessed. So there's no Deeming on that. Whatever you're earning, they'll assess. Now, there is a thing called the Work Bonus.

Shane: Tell me a bit about that.

Steve: Which I think is sensational. So the Work Bonus, it's basically an incentive for people to work past Age Pension age. So essentially, to keep it simple, your first $300 of every fortnight earned in employment income if you're over Age Pension age is exempt. So someone that's earned $1,000, they'll assess $700 of that fortnight.

And with that, there's a Work Bonus. There's an accrued amount, which was, it's generally $7800 of unused work bonus. But for this calendar year, it's going to finish up December of 23. They've upped that by $4000. So that might be relevant for some people. But to give you an idea, I had one of my clients, he's 70 years of age. So this is two years back. I just said, you thought about applying for the Age Pension? He thought, don't be ridiculous.

I said, there's a chance we might be able to get an Age Pension for you. So the gentleman was earning $72,000 per annum, lo and behold, we actually got him a part Age Pension of about $1780 a fortnight. Obviously depended on if he's done any overtime time or not. But he thought it was the greatest thing since sliced bread.

And I was actually surprised myself, because it's a decent income there, but purely because of that Work Bonus. And that's the beauty of receiving advice from an adviser, is most people aren't aware of that. They can still work and still get a part Age Pension. So it's like a best of both worlds for these clients.

Shane: It's a really important point. I know I've had experience with family members or other members that we've come across, who, there is a perception that people think that you can only apply for the Age Pension once, but that example is a good one. So you may not be eligible, you may not meet the assets or income test upon retirement.

But your situation can change. So you can apply for the Age Pension in the future, like your client that you've just talked about. And that's really important for people to understand is as their situation changes, to reassess their eligibility.

One thing that I did skip over because we moved into asset income, but just going back to the qualifying age for the Age Pension.

Steve: So qualifying ages, it has changed over the years, what they've done now, to give you an idea, anyone born after 1st of January 1957, the qualifying age is 67. Anyone that was born before 1st July 1952 was 65. And then there's a tiered system. So 1st of July '52 to 31st of December '53 is 65.5.

1st of Jan '54 to 30th of June '55 is 66, and 1st of July '55 to 31st of December '56 is 66.5. So it does vary just depending on when you were born.

Shane: Yeah, and just linking that back to your comment earlier about the difference between the eligibility date for the Age Pension versus the preservation age, or when you can access your superannuation, they're not exactly the same.

Steve: No, they're not related at all. I actually caught up with the member last week at 70 years of age, and I said, "How come you haven't applied for the Age Pension" And he said, "Oh, I didn't realise I could because I'm still working."

Shane: Yeah, right.

Steve: And he was blown away. He's only earning a small part time income as a self-employed. But I said, well, it's a good thing you've come in, because that could have continued for another couple of years. He's still working, but he could have applied four or five years ago.

Shane: Great. So just on the age, does someone have to wait until the day they turn their eligible date to actually apply for the Age Pension, or can they apply for it prior?

Steve: Look, Centrelink's given us a guideline. Generally, three months before is an age where you probably should be applying. Sometimes they get done in four weeks, sometimes they can get done in three months. It just depends how busy they are. But you can actually apply three months prior to reaching Age Pension age.

Shane: And so if someone isn't eligible for the Government Age Pension, for various reasons that you've already alluded to, are there any other social security benefits you can apply for?

Steve: There are. We deal with this quite often here with our members. So some people aren't eligible, obviously, due the assets or the income test, but if you are, there's the pension concession cards. But if you're not it, there's a Commonwealth Seniors Healthcare card, and that gives you a few little perks. And there's also the Low Income Healthcare card. So the Low Income Healthcare card gives you a little bit more. It actually gives you some energy concessions as well.

Which people absolutely love, especially with your winter gas bill. I wasn't too pleased with mine. But look, it does give them some relief there. The Commonwealth Seniors, obviously, things like the cheaper pharmaceuticals under the PBS scheme, giving a little bit extra under the Medicare safety net, so a little bit of an extra rebate there so they're still means tested.

Now, the Commonwealth Seniors is a lot more generous. Obviously it doesn't give you as much, but the Low Income Healthcare card gives you a lot more and people absolutely love it.

Shane: Steve, you've talked about all the different nuances in relation to social security benefits, and particularly Government Age Pension. There's a lot of information for people to process around their eligibility and when they can apply and so on. Where can people seek help in understanding how they can navigate that system?

Steve: So as we mentioned, it can be quite a complex process there, applying for the Age Pension, they'll look at your assets, income and a few other variables as well. It's always a good idea to speak to your relevant super fund to access different advice options, but we always recommend, especially for more complex situations, to contact Centrelink.

There's a financial investment services officer, they call it FIS. And they can help as well, just to make sure that the member is not missing out on anything and make sure everything's done spot on because the last thing you want where all the information wasn't given accurately, and then two years later, Centrelink sometimes comes back and says, "You owe us $7,000" for example.

And that can be quite stressful for the members. So, we always recommend, obviously, come and see us for advice, but also speak to your FIS officer in Centrelink and that pretty much makes sure your application process is going to be spot on.

Shane: That's great. Thanks, Steve, and thanks for joining us today to cover a very important topic.

Steve: 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 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.

AustralianSuper has the privilege of 3.2 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 Lisa Aldenhoven, a member of AustralianSuper. Welcome, Lisa, and thanks for joining us.

Lisa: Thank you for having me.

Shane: So, Lisa, can you tell our audience a little bit about yourself?

Lisa: Yes. I am 64, I'm semi-retired and I have had many careers throughout my life, but I think my favourite is being semi-retired.

Shane: Tell me a little bit about the careers that you have had before we get into semi-retirement.

Lisa: I started off life as a cadet journalist on The Melbourne Herald. I had always wanted to do acting, but I felt I needed a backup career, so I became a cadet journalist. After a couple of years, I got offered, initially a six week role in The Young Doctors. So I became the first cadet in the history of newspapers in Victoria to resign.

And I moved to Sydney. And fortunately, I then ended up having almost three years in The Young Doctors, until, for reasons which I've never quite got over, they decided to send me to Newcastle to study tropical medicine. And that was the end of my Young Doctor's career.

Shane: So, your character was sent to Newcastle? Yeah. Right, okay. I was going to ask a question around that sort of thing. I do remember the Young Doctors.

Lisa: I played the fat, daggy nurse with glasses who on the initial character breakdown, they said that my brother in the show was Dr. Holland, who was the hospital sex symbol, and the promise was that I would, after six weeks, lose the glasses and become a swan. Unfortunately, I was so good at being the fat, daggy nurse with glasses that they kept that character, yeah.

Shane: And so after Young Doctors, did you continue acting?

Lisa: Oh, look, I did a number of guest roles. I was the first person to die in Prisoner. I was in Cop Shop, Holiday Island, Carson's Law, lots and lots of soaps in the 80s. It's very disappointing to get to my age and realise that my career highlight was when I was 20. However, after Young Doctors, I did guest roles and things, but I actually wasn't very good at being unemployed. And as an actor, you spend a lot of time unemployed.

So I came back to Melbourne, using my journalism background, I got a job with a PR agency and then I went into Amcor in their corporate affairs department for a couple of years. Then I rejoined Herald and Weekly Times, and I was there for ten years as marketing manager.

Shane: Okay.

Lisa: So, I did that. Finally got retrenched in 1999 and I freelanced for ten years doing marketing consulting. I worked for a market research company doing their specialist recruiting. Then the GFC hit and we had a change of federal government and a lot of the market research work dried up. So I decided it was time to rejoin full-time work and got a job as a medical rep, which was probably the worst job I've ever had, but I did that for about nine years.

Then finally, I was coming up to my 60th birthday and my then-partner convinced me that I should retire and live off my super and be able to sort of have a life with him. Unfortunately, not long after that decision, he decided he was bored and he moved out. So I found myself at 60 with no job, no partner and no prospects. So, that's when I very much became reliant on AustralianSuper and all things that come with that.

Shane: Right, okay, well, we'll come back to that. There is a little bit of irony in that you ended up in medical sales and you started on the Young Doctors. But we won't talk about that.

Lisa: Yes! Well, in fact, there was one day very early on and I was in a doctor's clinic and a doctor walked in and he said, "I know you." And I'm like, no, you don't. "No, I really do, I'm sure I know you." And bit of toing and froing, it turned out that he'd been a fan of Young Doctors. He said, "You're the reason I became a doctor."

Shane: Wow! There you go. There's the motivation!

Lisa: There you go.

Shane: He should have become your best client, I would have expected.

Lisa: Oh, yeah, he was.

Shane: Of course, sales is a contact sport, you need to make sure that you're taking--

Lisa: That's it, yeah, no, I always had great access at that clinic.

Shane: So, you did comment that your highlight of your career was when you were 20. But it definitely was a very diverse career, which I'm sure had peaks and troughs, but you kept changing through into different things of need and desire. Was there a balance there?

Lisa: Well, yeah, I mean, look, you take the opportunity, certainly the sort of straight corporate world that was Amcor was probably not really my thing. I found that very difficult. Being back at Herald and Weekly Times was fabulous. And can I say, I mean, those were the days when you actually weren't embarrassed to say you worked for News Limited. Look, being part of that daily news cycle was just fabulous. You're at the centre of everything that happens in the state. And that I found really good.

Working as a freelancer from home was great. Obviously, you pick your hours. I did okay. I did well enough for 10 years, but also that can be a bit isolating. And look, being a medical rep wasn't all bad. You get to travel around. I had Tasmania as part of my territory, so I'd go spending a week in Tassie every six weeks, which was great.

Shane: Beautiful part of the country.

Lisa: Absolutely. Just get to drive around and pop in and say g'day to people.

Shane: Well, knowing you for a very short period of time, I can see that you're a very personable person. So I could see how you would have enjoyed that. Going back to your work life, and we'll get to retirement in a minute, but at what stage did superannuation become active for you in your career?

Lisa: Look, like most people, you just have money taken out on super. And I really wish that I had understood super better when I was younger, I used to naively think all I needed to do was pay off a house and I'd be fine. The other thing I didn't comprehend was exponential growth.

And I used to think that you would retire with a certain amount of money in your super account and that would be it, that you would just keep drawing down on that money until it ran out, not realising that, in fact, that money keeps growing. And I must give credit to Scott Pape. I became a regular reader of The Barefoot Investor every week.

And that started to make a lot of sense. And I was always torn between, you hear about the great things that can happen with super and how much money you can earn. And I had been always in regular funds through work, and I wasn't seeing any growth at all.

In fact, it used to be very disappointing every year when you'd think about, you'd be putting money away, your balance wasn't growing at all. And when I became the medical rep at one of our first conferences, they had some representatives there from our default superannuation company, and they were offering financial advice and you could make an appointment to go and see their person.

So I made an appointment and I went along and it was this little shop front in Hawthorn. And I walked in and this guy had a big whiteboard and he had all this scribble over the whiteboard, and I'm thinking, ‘how are you making money?’ And that's what I asked him, once I was there and saw the shop front and saw that he had no support staff. And so I asked him how he made money and what...

Shane: Relevant question.

Lisa: And he then started talking about commissions and that I would pay a fee for his advice. And basically he wasn't prepared to tell me anything unless I coughed up the $3,000 up front. And despite all the very impressive charts on the whiteboard, there was nothing that was telling me that I was going to be making any more than 2, 3% each year less fees. And I walked out of that office and again, Scott Pape had been recommending a couple of industry funds and I rang AustralianSuper and they made it so easy.

Shane: How old would you have been at this time?

Lisa: I would have been about 54. So I had already started salary sacrificing and when I was freelancing, I used to put extra money into super, but I just wasn't seeing any sort of growth. And I switched the money to AustralianSuper and it was... I won't say it was overnight, but it was very obvious very quickly how my money was growing.

So, I started salary-sacrificing more into my super account. I had always been someone who had believed in having a good amount of cash behind me in the bank. And again, as I neared 60 and I could see the sort of growth I was getting with my super and my ex-partner and I, he was very financially aware and he also had a good amount of cash in his bank account.

And he and subsequently I, we used to literally change banks every three months chasing those introductory interest rates. And you'd think you were doing really well because you are getting 3% or 3.5% for three months, which again when you break that down to a three-month period is really not even enough to buy a good dinner at some restaurants. Plus, of course, you pay tax on that money. And it just made no sense to me at all. So I then started moving my cash reserves, or the bulk of my cash reserves into my super as well.

Shane: So, you said earlier that you'd wish you'd taken interest in super earlier, and that's quite common, particularly when people are trying to fund a house or other things. But you've also just told us about your salary sacrifice when you were contracting and you've really thought about your super. So at some stage you've really taken a keen interest in your super. Was that at that stage of reading the articles you were talking about? Or was there another life event that made you think about or you had a vision of, "Okay, I want to retire at this age, I need to actually get serious..."

Lisa: Look, I was always aware of super, but once the penny dropped about the interest, well, the growth, the potential growth, the tax savings. And again, with salary sacrificing, you put a $100 in a week, or whatever it might be, the actual difference in your take home pay is not $100, it's...

Shane: Yeah, whatever your tax is.

Lisa: $50 or whatever. You don't even notice it. And so now I encourage all my young friends to just take a bit out every week and put it into their super.

Shane: Can I go back a step to the conversation around the financial planner? So clearly at that time, you had a need for some guidance and help or advice, and so you sought this advisor because they were introduced to you through your workplace. And you referenced a cost associated with that.

And financial advice does actually cost money because it's a professional service and there's generally good value attached to it. But I sense there was more to the decision not to progress with that advisor than the dollars. Was there a trust issue that you felt?

Lisa: One tries not to judge people. I was really cross because at conference they had said, come along and see us for free. They didn't mention that there would be fees up front. So, A, I was annoyed at that. The second thing is when I went to this little shop front on Glenferrie Road. It was pretty scummy. And the bloke that I met, I don't want to sound like a snob, but I'm going to. But you look at someone, you look at maybe how they're dressed, how they present themselves, you want someone at least to have an air of confidence, not look like they're a beaten person.

And this bloke didn't look like he was successful in life. And the other question that I always ask is if I was your, depending on their age, if I was your sister, your mother or your wife, where would you tell me to invest and how much money do you have in super? And people hate answering that question, but I think if they're going to be telling you and saying, this is where you should put your super, I want to know if that's where they put their super and I want to know how well or not their super is going.

The other thing that really, really annoys me and when I got retrenched from the Herald Sun at that point, again, part of the retrenchment package was to be sent to a financial planner. And I had been sent to a fairly well-known company. And they were the ones, they told me to split my super across two retail funds, which I did. And the second thing, and so I sat there and talked to this bloke for an hour.

At that point, I was 40, I was single. I didn't have children. I didn't have parents that I had to look after, and I owned my house. And the first thing he said to me was, ‘you need life insurance’. And I said, ‘Why?’ And he's like, ‘oh, because you want to be able to leave money to people? What about your dependents?’

I'm like, ‘have you not heard a single thing I've said in the last hour?’ I don't have dependents. I already have a house that I'll be leaving people. Why do I need life insurance? So they managed my super for a number of years. And around the time of the GFC, my tax guy may or may not have given me a hint that things were about to go pear shaped.

And I rang this company and said, I want to take my money out of shares, I want to put it all in cash, for now because I think things are going to go really bad, we can put it back in. And they refused and I was very angry about that, so I then cancelled them and so that's when I was looking for someone else to...

Shane: Right, so clearly that word trust, and focus on you as the client is what you were looking for and that was missing. And so then am I right to then say you just thought, ‘Okay, I had to take control of this myself and find my own source of information and make my own decisions.’

Lisa: Absolutely, absolutely.

Shane: So I think you mentioned earlier that you retired at 60 and that was a joint decision at the time where you were working with your then partner, what were the considerations that you had at that time to say, ‘okay, is this the right time? Am I going to be okay?’

Lisa: When I first retired, I had got a part in Neighbours and there was talk that that would become an ongoing role, so I had this fantasy that I could get back into acting and have a lovely time in my 60s. So, that's when I sort of threw the job in. My plan was that we were going to travel. I was going to hopefully pick up some acting work. At that stage, I wasn't thinking about living off, I knew that eventually I'd be able to start drawing down on my super, but I wasn't planning to do that immediately until my partner left.

Shane: Yeah, okay.

Lisa: Then I was in trouble. And look, at that stage, I know the rules have changed, but AustralianSuper did actually offer a free financial advice session. And I came into head office. I sat with this bloke for over an hour and he was brilliant. He was the kindest, nicest fellow and once everything was laid out on paper and I could see that I could start drawing down on super and the money wasn't necessarily going to run out. And plus, I am in a lucky position. I do also have a little holiday house down on the Great Ocean Road. So once my ex had moved out, I put that on Airbnb, so I managed that myself. So that's now...

Shane: Whereabouts on the Great Ocean Road?

Lisa: At Skenes Creek.

Shane: Yeah, lovely.

Lisa: Just near Apollo Bay. It backs onto a farm, so I've got cows at the back fence and the ocean out the front windows.

Shane: A lovely part of Victoria.

Lisa: It is a beautiful part of the world.

Shane: So the conversation you had with an AustralianSuper financial planner was had post your partner and yourself splitting up?

Lisa: No, no, that was pre, it was all... So, that was, well, look at this, and then that's when I started moving more money into super. So, I was going to set myself up and then obviously, I had to bring all that forward a bit more quickly.

Shane: Yeah. So that decision to bring it forward, so you had the breakup and then you had to think, ‘okay, what does retirement look like for me on my own?’ What was your mindset? Was it like, "Okay... I'm okay." And you then started to focus on where you're going to spend your time?

Lisa: Once I got my head around the idea that that money wasn't going to disappear because I was drawing down on it. And, in fact, we're now talking four years and my balance is probably more than it was when I started drawing down. You've also got to remember, within this time frame, a year after this, of course, we had COVID, how could we forget?

So that, again, was a reset on everything. And because I had worked, I was still doing a little bit of freelancing with a market research company. I'd started doing that again and obviously the Airbnb all stopped, but I was able to get JobKeeper, so that meant I could then, and I reduced the amount that I was getting from super and lived a very quiet life, like everybody.

Shane: Yeah, for a couple of years. So you've talked a lot about how you were funding your retirement around the income sources. So, JobKeeper or super or the Airbnb, did you feel like you had to make any other lifestyle changes, reducing spending or less holiday? Was that a consideration where you felt really comfortable with the income sources?

Lisa: No. Look, every now and again I think, "Do I need to reassess this?" Look, I'm not an extravagant person anyway. I'm a fairly minimalist in terms of my favourite saying is never pay full price for anything. So I only ever buy clothes that are on sale. Because I am single, I don't travel a lot. I was in New York a couple of months ago, which was interesting.

I have always probably been careful with money without being stingy. And so I've always lived within my means. My mother's mantra growing up was, if you can't pay cash, you don't buy it. So I've never been someone who's lived on credit. When I bought my first house, the aim was to pay it off as quickly as possible. And so that meant maybe not travelling when my friends were travelling, or not doing things that other people were doing, because I always just wanted to be debt-free.

Shane: So you had values instilled really early from your mother, by the sounds of it, and that's held you in good stead over time. So getting back to one of the first things that you said when we started talking was, the best job you've ever had was semi-retirement, which is where you are. Can you tell me a bit about what semi-retirement looks like and why it's so good?

Lisa: Well, you're free to do whatever you goddamn like, whenever you goddamn want.

Shane: Like coming for a podcast!

Lisa: Like coming for a podcast. Like waking up in the morning and just thinking, "Nah, it's too cold, I'm not going..." Well, I've got a dog, so I do have to go out every day, but it's like a secret society. And I think, like a lot of things in life, we don't talk about the ageing process, we don't talk about what life is like for retirees until you get to that sort of age.

It's like women and menopause, you never talk about that, but there's all these things, and suddenly you get there and you look around you and since I was probably the first in my group of friends, and I have tried to encourage a lot of my friends, showing them what I had done, showing them how it worked for me, and I can think of three women who've all followed suit.

And it's ‘how good’ is our kind of motto now because we can just go and do tours around Parliament House or go to the Botanic Gardens when we want to or come into town and just wander around. It's a beautiful day today. So this afternoon I'll take my dog down the beach because I can. And that's the thing about retirement.

People always say that you don't actually spend as much money as you did before you retired, when you retire, and that you can actually live a simple life. And it's true, because it's lovely just walking around your suburb, getting to know the area that you live, you don't have to be spending huge amounts of money to be having a really gentle, nice life.

Shane: You've definitely sold the dream. So was that how you envisaged retirement or semi-retirement or you hadn't actually thought about what it would look like?

Lisa: I hadn't really thought about it. I used to whenever I've been going for job interviews and things, and people say, ‘where do you see yourself in five years' time?’ And I'd be always like, ‘Well, I've got no idea, who would know?’

Shane: So you talk about what you're doing now and what you're loving, and I can just see the enjoyment you're getting out of retirement. Is that the continued focus, just see what happens? Or do you have future plans around what you might want to do?

Lisa: Yeah, I mean, I look at, for example, the Airbnb thing and think, how much longer do I want to be schlepping down there and changing beds and cleaning? But I actually really enjoy the fact people love being at my house and providing a really lovely place for people to go and have a holiday.

And I mean, the great thing about the Airbnb is obviously you're in absolute, total control of how often you rent it out, you can block it out at a moment's notice if you want to. I make a minimum three-night bookings because it's not worth my while going down there for two nights, and then I always block out plenty of days in between so that I get to enjoy the house as well. It's just being open to whatever possibility comes up.

I auditioned for a Korean TV series a couple of weeks ago, which was only a very small part. It was only a three-day shoot. One of those shoot days is in Korea.

Shane: Wow. And so the acting stuff is still something you're really keen on pursuing? Seems that's a bit of a passion.

Lisa: It's great fun. It's really good fun. I just love turning up on set. I love watching. I worked in production, sorry, in my abridged version of my career. I left a few things out, but I did work as a production coordinator after I left Young Doctors, and that was mainly on commercials. So, I was in charge of booking crews, locations, casting, that sort of thing. And that was great fun too, because it's just a magical world.

Shane: Yeah, it does sound a lot of fun, a lot of fun.

Lisa: It is.

Shane: On a, I guess, a more serious note, you're obviously thinking about what retirement looks like now. And you've talked about how you're funding your retirement. You've talked about being single and all those sorts of things. Have you put any consideration to what care may be so into the future as you get older? Around what you might need to look at if looking after yourself, if that was to be required?

Lisa: Had to put a real damper on everything.

Shane: I'll bring it back up. Don't worry. I'll bring it back up!

Lisa: No, look, I'm a very optimistic person and I don't intend to get sick. However...

Shane: Good plan, done!

Lisa: Yeah, done. Next question. That's the problem solved. No, look, obviously all those things, my mother died at 72, so that's not great. I have one sister who lives in Queensland, so if I needed care, I would be in trouble. But there's ways of approaching that.

Shane: Options. I am sorry for putting a damper, but I think it is a consideration.

Lisa: It is a consideration, obviously. Look, I am, touch wood, very fortunate that I have no underlying health issues that I'm aware of. I'm very fit. I keep fit.

Shane: You have a massive positive attitude I'm picking up as well.

Lisa: No, I'm a very good actor most of the time. I mean, look, life's not always great. And particularly when you get older and when you're on your own, that's not ideal. And this isn't the way when you talk about how you envisage life or this is not how I imagined my life would turn out. But what choice do you have? You play with the hand you're dealt and you've got to make the most of it, because what's the alternative? We all have choices.

Shane: And the way in which you've talked about your current life, there's no doubt you're making the most of it. The pitch that you gave us around semi-retirement and how you're living it, it was just fantastic and positive. So, you're clearly doing that.

Just to finish off, and I think you've sort of addressed this a little bit throughout our chat, but any words of wisdom for people out there thinking about preparing for retirement?

Lisa: Look, absolutely put as much money into super as you can and start doing it as early as you can. And I would certainly, absolutely recommend industry funds as opposed to retail funds. And I think the other big thing is you want to get as big a balance as you can. Having accumulated that balance, and once you do start drawing down on it, don't be afraid to spend it. Don't be afraid to enjoy it, because you've earnt it.

Shane: And it's your money.

Lisa: And it's your money, again, I guess there are people who've got kids who want to leave something for their children's future, but the best thing you can do for your kids is to live a happy life, I think. And that means living a good life. And if you need to spend money, spend it.

Shane: I think that's a great tip. Lisa, thank you so much for joining us.

Lisa: My pleasure!

Shane: I've really enjoyed our chat. Your career has been amazing. Semi-retirement sounds awesome. Thanks again and all the best for what comes next.

Lisa: Thank you very much.

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 that are found through various channels. And mostly those questions are relevant for many members, so we thought it'd 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 welcoming back Helen Harrison, who's previously been one of our superstar experts to talk about a really relevant topic, which is retirement, but more importantly, unplanned retirement. Helen has been a Financial Adviser for twelve years. Helen provides advice under the license of Industry Fund Services. Welcome to the podcast.

Helen: Thank you, Shane, great to be back.

Shane: So, Helen, when people think about retirement, in a lot of cases they're thinking about a particular age when they might be able to retire. But a lot of people and a lot of our members retire unplanned. What are some of the reasons why someone might need to retire earlier than they originally planned?

Helen: Yeah, that's unfortunately true, Shane. Most people want to retire around the age of 65, but recent data from the ABS shows that that's more likely to be around the age of 56. Some of the reasons why people may need to retire earlier than planned - illness, around 13% of people retire early due to sickness or injury, family responsibilities, so it may not be them that is sick or injured, but they might be caring for a loved one. 

Retrenchment often as people get older and they've retrenched, finding work again becomes more difficult or just burnout. Some people have just had enough of work and just want to take control of their retirement.

Shane: So, as a financial planner, there'd be multiple different situations that someone would come to you for advice. But if someone's facing unexpected retirement, what are some of the things they could do?

Helen: The first thing I would suggest that they do is really get an understanding of where their money goes, whether that's doing a budget, keeping track of their spending. There is a great tool available on the Australian government's MoneySmart website that could help. But it's really important that you understand what your fixed costs are, such as rent or mortgage repayments, food, regular bills. 

Understanding what your fixed costs are is really important moving forwards and also understanding what your variable costs are or what are the things that you may be able to cut down on. Good things that you could do would be looking at trying to reduce your power bills, phone providers, things like that, where you can compare different providers to see if you're getting a good deal. 

More drastic measures could be something like downsizing your home. If you've got debt, it's really a good idea to reach out to your provider to try and work out some kind of payment plans. A financial adviser or a financial counsellor might be able to help. Or you could even contact the National Debt Helpline, who could help you work out a plan on either freezing repayments or reducing these and putting some kind of payment plan into action.

If you've had to stop work due to sickness or injury, you may have some insurance either through your super fund or held outside of your super. So it's really important to give them a call and understand if you're eligible to make a claim. And the last thing you can do is really understand when you can access your super. So, most people have to wait ‘til their preservation age, which is between 55 and 60, before they can access their super.

So, understanding when you're able to access your super and also understanding what your qualifying age for the Age Pension is, which for most people is about 67, to understand what options are available for you in terms of generating some kind of income.

Shane: Thanks, Helen. I think there's a lot of good tips there, particularly the reference you made for people who may be finishing work due to ill health and the importance of insurance, and understanding what insurance you may have available to you.

So, you just touched on at the end there around someone being able to access their superannuation, possibly whether it be through unplanned retirement or retirement. So we use the term a preservation age, so the age in which a person can, in effect, have access to take their money out. If someone does have access to their superannuation, what are some options for them?

Helen: The first thing I would suggest that they do is go to our website and have a look at our super projection calculator. You can put in your current details, so your age, your current super balance, if you've got a partner, you can put their details in, you can put in what you're hoping to spend in retirement. And it will show you how long we expect your money to last based on your current situation. 

So, Shane, if you have met your preservation age, you could consider starting an account based pension or opening one of our choice income accounts. Effectively, this turns your money into an income stream during your retirement, but it still stays invested in the markets, where it could continue to grow. 

You've got a flexibility to also take lump sums out on an ad hoc basis if you need to for any unforeseen expenses. If you're forced to cut down your working hours, but not retire fully, you could consider a Transition to Retirement Income account, where you also will receive regular payments and can top up your take-home pay. Again, this is still invested in the markets where it could continue to grow.

Shane: Great. Thanks, Helen. Outside of superannuation, there's obviously a range of different government benefits that someone could access. So, obviously if they've reached the age of access to the Age Pension, but there may be some other forms of government assistance that someone could seek.

Helen: Absolutely. So if you've been forced to stop work due to illness or injury, you may be eligible for a disability support pension. You could apply to Centrelink to see if this is available. And if you are, or if somebody that you're caring for is sick or injured, you may also be eligible for a carer's payment or a carer's allowance. 

If, however, you have reached the Age Pension age, then you most likely will be eligible for an Age Pension. You just have to apply to Centrelink and give them all the information about your income and assets and then they will make an assessment of your eligibility.

Shane: So, Helen, if someone did access this superannuation earlier than they had planned, through early retirement, as you just discussed, but then in the future, for some reason, down the track, they were entering the workforce and then earning superannuation, can they contribute to superannuation again? What can they actually do?

Helen: Yeah, absolutely. You can now contribute into your super account without having to meet a work test until you turn 75. If you don't have an existing accumulation account, you can very easily open one of those online. And absolutely, if you change your mind and want to go back to work later on, that's absolutely fine and you can still continue with your income stream.

Shane: So, that's great. So, I think for some people, they might think, once I've made the decision to access my super, that's it. In the future, for whatever reason, whether it be through a new role or other areas of income, there are different ways in which you continue to grow and contribute to your superannuation. 

Now, obviously being forced into early retirement can be quite overwhelming for whatever reason it may be. Can you give our listeners some tips or ideas on where they might turn for help and support?

Helen: Yeah, absolutely. As we discussed, if you have to stop work due to sickness or injury of yourself or somebody else, definitely going to Centrelink and seeing what they can help you with is the first port of call. There are also some really great community organisations or centres where you can get some free financial counselling.

Often, if you've got some debt, they can help you with debt repayments or help you with a budget just so that you've got a more clearer idea of your current financial position. If you're struggling from a mental health point of view, there are lots of free online or over-the-phone services that can help you better understand your mental health. And also a visit to your GP to potentially look at some kind of mental health plan might also be beneficial for you.

You should also contact your super fund, most super funds, offer simple over the phone advice, or you can seek comprehensive financial advice if you feel that your situation is more complicated and speak to a financial planner.

Shane: Great. Thanks, Helen. So, as we said, people retiring earlier than they planned can be a really difficult and overwhelming situation, but it is quite common, and so, particularly your super fund is there for you for your retirement needs. So, by all means, always reach out to your super fund and if it's in the case of AustralianSuper, we can help point you in the right direction of other areas of help and assistance. 

So, Helen, as a financial planner, I'm sure you have clients that come and see you, who have been forced into early retirement. Can you give us an example where that has happened and where the member or the client has possibly been shocked in that outcome, but then through working with you, how that might have set them on the right path?

Helen: Yeah, I have seen people who predominantly have been retrenched earlier than they would have liked to have stop work. A gentleman that comes to mind was forced to stop work around the age 58. Initially, he was very shocked. As he'd intended on working until 65. However, having a look at his finances and looking at the finances of his partner and combining their situations together, we realised that the situation wasn't quite as bad as they had anticipated. 

And we were actually able to start an income stream and get a regular income that wasn't actually much different to their current living expenses. In the follow-up, he was quite happy now in retirement and realised that, you know, making this decision that was forced upon him wasn't actually too bad and they were really enjoying the time that they were getting to spend together and travelling around Australia.

Shane: Thanks, Helen. That's great. It actually does demonstrate the importance of seeking help and support in these sort of situations. It is actually quite common that we hear from some of the members we talk to on this podcast is that even when they had a planned retirement they weren't sure what they were going to do and the common theme is they actually didn't know how they had time to work. So, Helen, thank you for joining us today and we'll get you back very shortly.

Helen: 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.

Australian super 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 Michael Moore, a member of AustralianSuper. Welcome, Michael, and thanks for joining us today.

Michael: Thank you very much.

Shane: So, to kick off, Michael, tell our audience a bit about yourself.

Michael: I'm 64 years old. I have a wife and one daughter who's currently attending Melbourne Uni doing graphics designs. And I work for Second Bite, a company that picks up food that would normally end up in landfill and redistribute it to charities so that people can get a meal.

Shane: How long have you been doing that for?

Michael: Six months, I think I'm up to now, but, yeah, we had a situation where my wife was working at Kilmore International School, August the 2nd last year, and they got an email saying the school will close on August the 4th. Yeah. So, she was full time and I was part-time before that, and so we both went part-time and then eventually she just couldn't hack it anymore and wanted to retire. So I got into full-time employment.

Shane: Sounds like Second Bite is a significantly fulfilling organisation.

Michael: It's fantastic. Yeah. It's just great to be able to do something for the community and give a little bit back.

Shane: We'll come back to what you're doing now in relation to employment and the transition from full-time to part-time to full-time, but just take a step back. Talk us through your work-life journey.

Michael: I went to university. I was doing a Bachelor of Science. Had some family difficulties, so I had to leave that and get into the workforce. So, I worked at CSL and then I worked for the Department of Agriculture, did that for 10 or 11 years. And then in those days, you were allowed to cash in your super. So, when I left, I bought a house, and I was allowed to take all my super, which was ridiculous.

So, I bought a house and then got into cooking. Started doing cooking after that, but with zero superannuation. So, I then joined AustralianSuper, which was probably one of the best decisions I've ever made, and have maintained that since about 1988/1989, so yeah.

Shane: And so you went into cooking. You were working in restaurants and cafes?

Michael: I started doing an apprenticeship with a bakery in Bridge Road, Richmond with a view to buying the business. And so that happened. He taught me, did my apprenticeship with him, and then eventually took over the business from him. Opened another coffee shop in Kew and then used that to begin cooking. So, I would cook all the lasagnas and spaghettis, and they would go to the shop in Bridge Road Richmond and then all the cakes and coffee scrolls and things would come from Bridge Road Richmond to the cafe in Kew.

Shane: That's a fairly significant shift in career. So, you had the cafe and the shop and the cooking and then where did you progress from there?

Michael: From there I was in the business with in-laws and my then wife, my first wife, we got divorced and all of a sudden the in-laws, their attitude changed, the trust went from 100% to zero and I just couldn't operate like that.

There was always someone looking over my shoulder. They just didn't trust me anymore. And I said, just because I divorced your niece, it doesn't mean I'm all of a sudden going to steal money from you. So anyhow, I left that with a considerable debt. They then stung me, so I had to get a job.

So, I got a job as a storeman just to make ends meet with Ramset Fasteners in Richmond. Went through and became the store manager, became the state store manager and eventually the international distribution warehouse manager.

Shane: Excellent.

Michael: In Dandenong, yeah, when they bought a significant asset in the USA and became a multinational Pan Pacific supplier.

Shane: And did you stay with them until…

Michael: No, I got poached by actually one of our suppliers. They said, look, come and work for us. So, I went over and ran their warehouse in Preston, all the logistics and filling orders and everything. So, did that for a few years. And then my wife, my then girlfriend rang me one day and said, I'm pregnant. And I was 45 and she was 44.

And so we both went, "What the hell!" She had three children from a previous marriage, so she said, no, I don't want to do this anymore. So, I became the stay-at-home dad.

Shane: Yeah, okay.

Michael: Did that for six years.

Shane: Good on you.

Michael: And then eventually got back into cooking. Went back and worked for the Australian Ballet. So, we also serviced the Arts Victoria, the National Gallery, and I did all the cooking and also for the Australian Ballet School.

Shane: What a diverse career.

Michael: Yeah.

Shane: And fantastic around the six years you spent home.

Michael: Oh, that was brilliant, that was brilliant.

Shane: Whilst it's common now, it probably wasn't as common back when you did it.

Michael: I remember going to a concert for the Fairies in South Morang, and it was a two-and-a-half thousand stadium and I was the only male there.

Shane: Yeah, wow.

Michael: There were 2,499 kids and women, and there was me. I was the only one. Now, as you say, you see dads picking up kids all the time. But then there was me and maybe one other at our school. No one was doing that.

Shane: And you'll be the one that was better for it, spending that magnificent time with your daughter.

Michael: My daughter, still, when she comes to talk to us together, she talks to me. And my wife says, "Why don't you talk to me?" I'm the caregiver. I'm the one she's been talking to all her life. It's the same as dad saying, "Why don't you talk to me?" when kids talk to their mum.

Shane: Yeah. So, going back a bit, obviously in a changing work environment you've had, you talked earlier about accessing your super to buy a house, working for someone else and then working for yourself, and then, in effect, being a stay-at-home dad where you wouldn't have been earning super and then back in the workforce, which is quite common, where people are having a sporadic relationship with their superannuation.

You did also mention that, in effect, you sort of regret the fact that you could access your super to buy a house, but at the time, it would have been the most important thing for you and your family to purchase that house.

Michael: Yeah, well, it got us in. But, I mean, after we sold that house, we bought another house, and that's when interest rates went up to 18.5%. And that's why I left that position in the negative, because the house, it doesn't happen often, but it's happened once in my life where the value of the house went down and all of a sudden you've got a mortgage that's worth more than the house.

It just killed a lot of people in terms of financial stability. But luckily, I was with the help of my parents and being able to get a job and work hard and go back up to the top again, it's worked out all right. But, yes, when I was at home, I think even the insurance stopped. They wouldn't let me do insurance anymore because I wasn't working.

Shane: Yeah.

Michael: Then after that, I got prostate cancer. Well, I was told I had it. And there were two options where they slice you open or they use the robot. But to use the robot was $15,000 to $20,000 with no rebate. And so, once again, I had to access my super to get the money to do that. So, once again, the super went down. Meanwhile, my wife's working in a very lucrative position, and her super is going up and up and up and up and up. So, as a couple, we were all right.

Shane: I'm sorry to hear about the cancer. And unfortunately, you had to access your super, but also, it was something that additionally helped you to do what you needed. And you referenced your wife was working, earning that super.

But quite often, particularly in relationships, or not quite often, in almost every situation, that combined retirement savings is hugely important, and particularly in a family upbringing environment. And so you've had that benefit, as you said.

Michael: Yeah. And also the divorce. There's always that idea of what happens if things break up when we get divorced. You know, I've got no super and she's got a reasonable amount of super. I understand from women's perspectives who's been stay-at-home home carers, all of a sudden they get divorced, what happens?

Shane: It's a big issue. Absolutely. So, you've been through quite a large journey of life, and you now reference that I think you said you went back, you reduced from full-time down to part-time.

Michael: So when the school closed down and we were both part-time, luckily we came across a fantastic financial adviser who was independent, and he introduced us to working towards a retirement.

Shane: So, Transition to Retirement?

Michael: Transition to Retirement account, so we worked out what we wanted our retirement income to be, and then we used our Transition to Retirement to make our monthly income the same as that.

Shane: Right.

Michael: So that we could have four or five years of living at that amount.

Shane: How old were you when you started the Transition to Retirement?

Michael: It's probably about three years now I think, I think I was 61.

Shane: So you could access your super. And so you then, Transition to Retirement is that you're able to draw some of that money as an income out of your superannuation account, which would then compensate for a reduced working two part-time jobs. So you in effect said, "I want to earn X thousand a month." Some will come from your Transition Retirement account with AustralianSuper and the other part–

Michael: From two part time jobs.

Shane: At the same time, you're also contributing to your superannuation because of the income. So, you're in effect topping that up. So, for those listening, that's sort of the concept of a Transition to Retirement account. So, that tipping point in relation to particularly the transition retirement strategy was seeking advice? How did you come about that advice? Was it word of mouth?

Michael: Yes, word of mouth, yeah. A person at her school used this guy. He just lived not far from us. And as I said, he was independent. So, we met with him and he showed us straight away a few... Because we thought we were savvy, but…

Shane: There's a lot to know.

Michael: There's so much to know. Once he told us this and this and this, we were just like, "Oh, holy moly..." And just at that first meeting, he showed us that he could save us $15,000 just that year.

Shane: Okay, through the transition retirement approach?

Michael: And moving my wife's to AustralianSuper and all those, we had some money put away and what to do with that and what to do with this and other things and just moving it all around and making it earn the best possible return. And from an independent, he said, "Look, AustralianSuper is the best, you really need to get into AustralianSuper."

Shane: So you met with that adviser about four years ago?

Michael: Yeah, about three or four years ago.

Shane: Have you met with him since?

Michael: Oh, yes. He's now our… We've got a contract with him. We pay him every year.

Shane: And you've had to change things or it's just reassurance that you're on the right track?

Michael: Like last year, it was time to upgrade our cars. The services were starting to cost $1,700 to $2,000, you know? They were so many years old, so we said to him, what's the best thing to do? And he come back to us and he said, look, what you need to do is we had some money put aside for the purchase of the cars. And he said, put that into super. He also advised us never to close our home loan.

Our home loan got down to $2,000, and he said, don't ever pay that $2,000 off. Just pay $50 a week, what you need to pay to keep it open. And so we used the money to put into super. We used the loan to buy the cars. And my wife got all her tax back, every single bit of tax she paid for that year, which offset the price of half the cars, more than offset the interest that we'll be paying on the loan. And it increased our superannuation by $50,000. A normal person would not think of that. You know what I mean? I don't know if people do think of things like that.

Shane: So, I think that point or what I'm hearing is the benefits of the advice that you're receiving, both, there's a financial outcome, clearly, you're talking through, but there's also, I guess, a comfort and confidence outcome that you seem to trust this person, but also your ability to relax and focus on other things, knowing that this strategy is in place.

But I think quite often advice costs money. But I can see from your interaction that you see the value in what you're paying versus the outcome that you're receiving, which is really important. So, what I'm hearing in your sporadic working life or different working life and health and other things, you seem to have a fairly good understanding on where your super is at and otherwise, so you've kept in contact?

Michael: Yeah, when we first had a meeting with him and he said, how much super have you got? I was able to tell him to the dollar, how much has your wife got, this amount. And other questions, you know, and I was able to rattle them all off. And he said, that's very unusual. He said, most people go, "I don't know" when they're asked about super. And that, as you said, people have a lot going on in their life.

Maybe not all of them have the ability to do those sort of things and keep an eye on it. But having a computer where you just put in your password and then look and see what your money is and how it's been going for the last six months.

Shane: How often do you check your super now?

Michael: Probably every month.

Shane: Okay. Yeah, that work you're doing now, that's a paid role?

Michael: Yes.

Shane: So, you're getting super paid into your account now, so you're checking the contributions going in and then the payment. But you're also getting this constant reminder of your super because you got this Transition to Retirement. So, you're getting your payment into your bank account.

Michael: Plus the last few years when I was working part-time, I had to make sure that I put a $1,000, and I think it's now $1,500 in by myself each year because then you get a government contribution, which was a $1,000, but is now $500 and also putting in, my wife made contributions because her money was so much.

Shane: So is this through the adviser, was giving you this piece of advice?

Michael: Yes, yes, I knew about putting the $1,000 in yourself.

Shane: It doesn't surprise me, you're all over it.

Michael: So, yeah, if you take a $1,000 and you get $2,000, and it's now $1,500 and $500, I think. But who's going to say no to a $1,000 a year or $500 a year just by understanding what your super is doing for you?

Shane: So you're both working part-time now, is that right?

Michael: No, she's retired completely, she had a time where the people at the school, she was working part-time and she was such a good teacher that they were just hounding her to work full time and they kept giving her classes and it was just overbearing. Not worth it.

So we again sat down with our financial adviser and worked out if I went full time and what my wage was and what our choice income account that we then opened up, what we could take out of that, that she was able to retire full time.

Shane: Great.

Michael: And she's taking over the cooking.

Shane: Yeah. Okay. I was going to ask what she's spending her time doing.

Michael: No, she's doing all the cooking and looking after the house and all the things that stay-at-home person does that I was doing before. I think a lot of my friends when I was doing it, the biggest thing that they found amazing was, "You mean you wash the clothes and mop the floors?" And yeah, that's what I do. That's what you have to do.

Shane: It's called living.

Michael: Yeah. And that was the thing that they didn't think of taking the kids to school or making the sandwiches and that, but it was the cleaning the toilets and mopping the floors and I can't make my wife work full-time and then come home and have to mop the floors and vacuum the lounge. It just doesn't work like that. Well, not in my opinion.

Shane: Yeah, absolutely. So, what's your thoughts around when does full-time retirement come for you?

Michael: Well, we had it worked out with all our figures and that to age 67. My wife's only seven or eight months younger than me. So, we had it out, worked out for 2028, when we both hit the required age. But now that I've got this job, I'd like to keep doing it. There's another guy in the same organisation who works with me who's 73, and he's still working. So, it now becomes, how long can I do it? Because it's a fairly physical job, some days I have to pick up, literally pick up a ton of food and put it into the back of the van.

Shane: That's quite physical.

Michael: It's very physical.

Shane: And so your desire to work possibly longer, what's the driver of that? Because you said, "Now I've got this job", is it actually specific to this job?

Michael: Yeah, fulfilment. I mean, if I could still be cooking, look, the best thing in life for me is, as my wife says, Saturday afternoon, Sunday afternoon, close all the doors around the kitchen, have the radio at full blast, and just cook.

That's my happy time, but the fulfilment from this job, particularly when you deliver, when you get there and 20 people walk out of this health centre or community centre or wherever you're delivering to, and then you see the people lining up outside and the joy on their faces when they come in and they know that that night they're going to have broccoli soup or cauliflower and even some of the things like leg of lamb, being able to have a leg of lamb and roast potatoes.

Shane: All the things many of us take for granted.

Michael: And the other thing is, we also do the Master Chef, when you watch, I don't know if you watch Master Chef, but if you've ever seen when they open the doors and all that food that they get to choose from?

Shane: Yes.

Michael: Well, we pick that up. That's what we pick. So you get prime ribs, duck and foie gras. So, imagine you've got a family of five kids and you turn up and all of a sudden you get to choose duck and foie gras and oysters. And it's just unbelievable.

Shane: I can see and hear the joy that you get from it. And it's really common that we hear people the reason they want to continue to work longer is actually the fulfillment side. And you've got that balance where it seems that you and your wife have made some really strong strategic decisions based on advice, which has allowed you to get that comfort on the financial side. And now the personal fulfilment that you're getting is fantastic.

Michael: None of this would have happened without the financial advice that we got four years ago to set up our lives, a transition to retirement. But look, in that three years, our retirement has changed. So, I'm very aware that you can never say, "What are you going to be doing in five years..." If I could go back in my life five years, there's no way knowing that I could say what I'm doing. You know what I mean? Not a hope in hell would I be able to say that my wife would be retired and I'd be working full-time five years ago. Not possible.

Shane: And obviously, having a plan helps. But also having that constant, particularly from a financial viewpoint, you talk about the constant engagement you have with your advisor if those plans change. So, beyond the significant enjoyment you get from your work, are you planning on travelling or are there other things that you and your wife want to do together?

Michael: Well, it's quite funny. My cousin moved to Italy in the 1960s, and she's got an Italian family now, grandchildren, great-grandchildren, and we always said all our lives that we were going to go and see her, and it had just come to that stage where we hadn't gone and seen her. So, again, the financial adviser showed us how we could get enough money put aside to do it. So, we went to Italy and saw, you know, and cousins come from all over the world from Houston, from Hawaii, from Germany, for this celebration.

Shane: That's a family reunion for sure.

Michael: It was a family reunion in Italy, and it was just brilliant. But what it did make us know is you can only look at so many churches, you can only stand in so many plazas.

Shane: Good food, though.

Michael: No…

Shane: No? You weren't happy with it? Or you were, you're probably a harsher judge than I am.

Michael: No, it was terrible. It was awful. It was absolutely appalling. Like, some of the meals were just appalling.

Shane: Right.

Michael: So, I don't know if we didn't choose the right restaurants, but anyhow, what we realised was that going to a beach in Queensland or a mountain in Tasmania or in Australia was far better for us than traipsing all the way to Europe and then walking around through various churches and steeples.

Shane: So, travel within Australia is still something on the agenda.

Michael: Relaxation. So, what we've decided now is that our holidays will be at the beach, at Darwin, you know, watching the sunrise. Not going to Germany, not going to London. So, it's really helped us to know that what we enjoy is relaxation.

Shane: And the thing about retirement is it's your retirement.

Michael: Exactly.

Shane: And so you do what pleases you both. And that's the flexibility that you've created. So, last question from me, and I think maybe I know the answer to this, but I'll ask it anyway. Any sort of tips that you could give our listeners around the thing that you think was the most important thing you did to set yourself up for retirement?

Michael: Speak to a financial adviser I would say.

Shane: Advice was the most important thing?

Michael: Advice was the most important thing, yeah.

Shane: And the thing that you referred to earlier is the trust and rapport that you're able to build. And there's thousands of high-quality financial advisers in Australia.

Michael: Know what your super money is doing, I think is the second thing. Know how much you've got. Know how much you need. We were bombarded with these things, "You need a million dollars to retire."

Shane: Yeah, we actually did that as a topic on one of our previous podcasts around “Do I really need a million dollars?” Because you're right, it's sort of bandied around. And the ultimate answer to that is the way you've answered previously is it's up to the individual. What is the income that you want to live off? What are your ways of earning it? There is no one retirement.

Michael: And that's the good thing about the Transition to Retirement, is saying, is this money enough to pay your rates, to pay, like, electricity and gas has gone through the roof and we've had to make some changes to our budget, our weekly, monthly budget to accommodate that. So, it's actually physically made changes in our life, as the cost of living has changed just in the last year.

Shane: And that's clearly a common challenge for all Australians, and particularly for retirees where their income opportunities are reduced, so absolutely. Michael, I've really, really enjoyed the conversation today.

Michael: Thank you.

Shane: You've been through different, varying parts of life roles, stay-at-home dad. But it's so pleasing to see you and your wife in a position that, as I said, you've tailored your retirement to you and I think a lot of our listeners will learn a lot from you. So, thank you and all the best for the next part of your journey.

Michael: Thank you very much. It's been most enjoyable.

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 that are found through various channels. And mostly those questions are relevant for many members, so we thought it'd be great if we could share some of those questions and answers through this podcast.

To help answer those questions, I'll invite a guest expert to join me on the podcast. One of the most important areas of impact on our members' retirement savings is investment performance and hence has a high interest level for members.

And that's why today I'm very happy to be joined by one of the leaders of our investment team, Justine O’Connell who is the Head of Portfolio Construction. Welcome, Justine. Thanks for joining me.

Justine: Oh, thanks, Shane. Thanks for having me.

Shane: Justine, can you tell our audience a bit about yourself and what your role at AustralianSuper is?

Justine: My role is Head of Portfolio Construction, like you said, and it sits within the broader Asset Allocation Team. And in simple terms, my team is responsible for constructing the PreMixed investment options that we offer to our members. So, the flagship portfolio that we talk about a lot, particularly when we talk to members, is the Balanced option.

But we also offer a range of investment options across the risk-return spectrum, from high risk to low risk. And so my team is really focused on what asset classes we need to allocate in each option to meet the objectives within the constraints that we set for each option to deliver the retirement outcomes for members.

Shane: Thank you. Very important role for members and how they're investing their money. So, commonly, members will ask funds, what is going on? What's happening in the market? And it would be remiss of me not to ask you, what is your outlook of the investment market and what are some of the signs you're looking out for?

Justine: Well, there's always a lot going on in investment markets. So, you know, one of the most important things that we do in the asset allocation team and obviously in portfolio construction is we have an investment process which helps us to focus on the key things that we think really drive the economy and drive markets and then give us insights into how to position the portfolio.

So, hopefully it's helpful for members to understand we have two key inputs into our investment process. The first is the outlook for the economy and then what that means for investment markets. So, how are investment markets like equities and bonds going to respond to what's happening in the real economy?

The other key thing that we really always want to think about is value. And everyone knows what value is. And the same applies for asset classes or assets. Sometimes they're expensive and sometimes they're cheap. So, we want to think about when a good time to buy those asset classes is.

So, in terms of your actual question, the outlook, something we focus on at the moment. I know everyone will be aware that global central banks, and certainly the RBA as well have been aggressively hiking interest rates in order to bring down inflation, which, after a very long period of being pretty benign, has been much higher than it has been over the past sort of 30 years.

So, we're in quite a different environment than we have been for a long time. In the US, which is a key market for us in terms of informing how broader investment markets work, the Fed Reserve has increased rates to its highest point in the last 22 years, and in Australia, we are all aware that rates are now over 4%.

So what are the central banks trying to do? That's a pretty blunt instrument, but what they're trying to do is slow demand. And what typically happens when they increase interest rates and slow demand is that employment increases. And typically when policy or interest rates are very tight or very high, the result is that the economy ultimately ends up in recession.

When the economy is in recession, what then typically happens to asset classes is that risk assets or growth assets like equities, fall and other assets like fixed income and cash tend to do better in that sort of environment.

Shane: So when you say equities, you're talking about shares.

Justine: Shares, yeah. So, listed shares in particular. So, that's our outlook at the moment, really driven by central bank policy in terms of the outlook for the economy. So then when we look at asset classes in terms of what's expensive and what may look a bit cheaper, mainly across the board, most asset classes, particularly growth assets like listed equities, are a little bit expensive.

So, we've got a scenario where our outlook is for a recession because of tight policy and certain assets are more expensive than they have been historically and more defensive assets like cash and bonds look a little bit more attractive on that basis.

Shane: So based on that, and thank you for that explanation, have we as the fund looked differently at how we would invest now in this particular period?

Justine: Yes. So then the next step really, and that's key part of my team's role is to bring together the outlook and valuations and also to monitor a number of different factors in the economy to continue to test that is then to say, well, how do we actually want to construct the portfolio?

So, at a really high level, the portfolio is what we refer to as defensively positioned. So, that means we have more in bonds and cash than we usually would hold through a long-term cycle and we have less in equities. And we think about that versus a benchmark that we have for allocating assets.

We are a long-term investor in unlisted assets and so we still have a reasonable allocation to unlisted sets both mainly in infrastructure and also in private equity. So, we hold a bit more in those assets because we believe in the unlisted premium over the long term. So, we want to own and generate returns for members from those assets.

Shane: I was going to ask you this question later, but considering you've just referenced unlisted assets, can you just explain to our audience, some examples on what that is and why that is accessible for you guys to invest on behalf of our members that maybe an individual may not be able to do it themselves?

Justine: Yeah, absolutely. As I mentioned, we obviously invest across a number of different asset classes. When we're building the portfolio, we invest in listed equities, and most people can access listed equities. There's a number of different ways that people can invest in listed equities.

But we can really broaden our investment opportunity by also investing in unlisted assets and that just firstly gives us access to more investments because the world is comprised of both listed and unlisted investments and we can also use our scale and our strong cash flows. So we're really so lucky to have a really strong cash inflow profile and that gives us the ability to hold unlisted assets and invest in unlisted assets through the long term.

Some examples of unlisted assets are we hold a number of toll roads both here and offshore. Sydney Airport is another good example of an unlisted asset that we were able to buy with a broader consortium and we obviously own a number of large direct property investments offshore and in Australia as well.

Shane: There's some great examples there and I think it's one of the things that we try to demonstrate to members through different forums around those unlisted assets that we hold that as an individual it'd be almost impossible, but also the long term nature. So if you're going to Sydney Airport, you're paying for car parking, maybe think about your retirement, that's assisting.

But I think your point then around the ability for us to hold those through the members' money that's being invested allows us to continue to be active in our other investments. So I think it's really important for members to understand that they are owners of worldwide significant assets.

We've talked about the current investment markets and members – and consumers, Australians – are generally on higher alert in investment markets at times of uncertainty, but obviously we have a long-term view to investing. And you've touched on some of the key areas that we consider. Can you talk me through some of the core beliefs that AustralianSuper has when investing money for the long-term for members?

Justine: So the most important core belief, and I know this is true across the Fund, but certainly in the investment department, it resonates in everything we do, is that we are all focused on one thing, and that is generating the best returns within our risk appetite for our members to give them the best retirement.

And that's something we think about and refer to when we're thinking about these direct investments, what's in the best interests of our members and will generate the best return. So that's really foundational, I think.

In terms of more our investment beliefs – and this really struck me when I joined AustralianSuper – but we believe strongly in active management. Over 90% of the portfolio is actively managed whether it's, I referred earlier to how we're thinking about managing our asset allocation, but we actively manage the Australian equities portfolio. All parts of our portfolio where we think we can add value because every additional per cent – I was going to say basis point – but every additional per cent makes a significant difference to the end balance of members. So if we think we can make money, we should do that.

The third point is really around scale. I think it's a privilege to have the scale that we have and the strong cash flows that we have and we can use that in two or three really important ways. The first one is to reduce costs and we do that by internalizing teams. We think we can reduce external manager fees by doing it ourselves internally and using our scale. We can also with those internal people, we can generate great investment insights. We have over 300 investment people in the department and we can leverage those insights from the stock pickers in Australian equities to the economists and thematic long-run investors in the Asset Allocation Team.

And thinking collectively and sharing knowledge is so important to generating ideas and generating returns. And obviously we spoke to the other benefit of scale which is really around our ability to invest outside of listed markets and open up our opportunity set to invest not just in Australia directly, but also overseas and generate better returns for members that way as well.

Shane: I think that just picking up on that point you've talked about scale and one of the things that's really important for us in the fund is being bigger is only important if it makes us better. And so you've talked about that size is allowing us to have better net investment outcomes for members. Just reiterating that point that being large is one thing, but you need to use it for better member outcomes. And that's coming through very clearly in the way in which we think, and our core beliefs in investing money.

Justine: Yeah, I think that absolutely, because you're right, it only works if you can generate better net investment returns. It does require you to rethink over time how you invest, because how you invest a portfolio of $50 million relative to $100 billion is going to be different.

And we've got to a scale where it makes sense to internalize because we can realise those scale benefits and reduce costs. But that's the point at which you do it when you can realise either cost savings or better return outcomes.

So we do have to change how we invest. And one of the key things that we have talked about for a long time is moving more, investing offshore, setting up teams offshore to really open up the investment opportunity set and also to be able to invest at the scale that we are.

Shane: So that point there, again, for a member, reiterating what we said earlier about unlisted is the size and scale allows us to invest in assets that, as a smaller fund, we may not have been able to. And then you correlate that back to the member, that a member would not be able to for that outcome and that member benefit that drives all our decision making. So just taking it back a little bit, Justine, when you're talking about actively investing, can you explain to our audience the difference between active investing and passive investing, which people commonly ask us?

Justine: Yeah, absolutely. So the objective of passive investing is to achieve or to deliver the return of an agreed benchmark. So to try and make that real for someone listening, you often hear about the ASX 300 or the S&P 500 or the NASDAQ. They're all defined as benchmarks or indices. So, a passive investment in that context, it would deliver the return of that benchmark. That would be success for a passive investment.

Justine: Yeah, absolutely. So the objective of passive investing is to achieve or to deliver the return of an agreed benchmark. So to try and make that real for someone listening, you often hear about the ASX 300 or the S&P 500 or the NASDAQ. They're all defined as benchmarks or indices. So, a passive investment in that context, it would deliver the return of that benchmark. That would be success for a passive investment.

Active investing, in contrast, aims to make more money than that agreed benchmark. So, taking that same example for, say, the ASX 300, you may have an objective as an active investor to deliver the return of the ASX 300 plus 1%. And to achieve that objective, you then have to take deliberate deviations or different share allocations compared to that benchmark to generate a better return.

So you basically need to pick shares that do better than the average index and hold more of them over that period to generate that outperformance. If you don't hold the right shares, you do worse. And that's actually really hard to do sustainably over the long term. That's why we have really big teams of researchers and portfolio managers making those decisions to try and beat those benchmarks across the portfolio

Shane: Great. So as you reiterated earlier, we're an active investor, we use our size and scale to look for value and opportunities for our members as opposed to sticking to the benchmark. And you talked about those things that we might invest more in, but there'll be also assets that we choose to invest less in that an index manager may do.

So, Justine, question directly from a member: "Why can't members invest in overseas listed companies through the Member Direct investment options?"

Justine: So, trading in international shares can be complex. It exposes the member or the investor to different currencies other than the Australian dollar. And there's also a range of different tax regimes depending on which country you're investing in. But overall, it just means it's more complex and much less straightforward to invest in directly. But we do offer a number of other ways to get exposure to international listed shares.

Shane: How do we do that?

Justine: So I might talk through a few different ways. So, on our investment menu, we have what are referred to as DIY options, which are effectively single sector options and one of those options is an international shares option. That's an actively managed option that aims to outperform an overseas benchmark, and that's very straightforward for members to invest in.

We also offer the Member Direct platform, and across that platform there are a number of options to invest in international shares via ETFs. And via an ETF, you can get an exposure to a range of diversified companies and you just need to invest in the one option. So, it's a lot more simple for members.

So an example on the Member Direct platform is the NDQ, which, for example, tracks 100 of the largest non-financial companies listed on the NASDAQ or FANG, which invests in leading next-generation technology, including household names such as Apple, Facebook, Nvidia these days, et cetera.

So on the member direct platform there's broad-based ETFs which just invest across a range of sectors and geographies. But there are also then sort of more sector-specific international investment options like I've just mentioned, that are more focused on technology stocks for example.

Shane: And you referred earlier to our PreMixed option. The most commonly used PreMixed option is our Balanced option.

Justine: The Balanced option, yes.

Shane: Which also has exposure to international-listed companies.

Justine: It has over 50% in equities, of which around just under 60% of that is in international shares. So a reasonable proportion of the portfolio. We also have the high growth option which is mainly invested in shares either listed or unlisted by private equity infrastructure listed equities. And that again has a large proportion of the portfolio in international shares and that aims to outperform CPI by around 5% over the long term.

Shane: So, ultimately a member has multiple options to invest in, in this question in relation to international shares; a PreMixed option like the Balanced fund, where the member is just looking at their risk profile and in that example you've talked about it being, as the name says, balanced between high risk and medium-low risk, or they can be more specific in how they wish to invest, but using investment vehicles like our DIY mix or ETFs, as you referred to. So, there's options there available for members depending on their appetite for being directly involved or through a PreMixed option.

Justine: Yeah, absolutely.

Shane: Just to finish off and keeping in mind that this is general advice and not personal advice, but particularly with markets the way they have been, what would you say to someone who keeps a close eye on their super and thinking about retiring in the near future as it relates to investments?

Justine: So super can and usually does form a really important part of an individual's retirement solution. I would recommend getting professional advice on what would work best for you depending on your risk appetite and your personal circumstances.

I think that's really important, particularly as a member nears retirement. As general rule, returns are positively correlated with risk. So, high returns involve taking more risk, lower returns involve taking less risk. Just in really simple terms. One of the biggest risks for members retiring at 60 is the longevity risk, which refers to the risk of basically outliving your savings.

Given that people in Australia on average, live for another 20 or more years after retirement, super assets could be viewed – or should be viewed – with a longer investment horizon to think about managing that risk. So, often when you think about it, when a member retires, you still actually got a pretty long time horizon for investments.

Shane: I think that's a really pertinent point, and something that's quite commonly asked by members is, some people will think, I've got access to my money on retirement and 100%, it's your money, but the benefit of keeping it invested in the market for that period of time allows you to still have that longer-term horizon.

So, that's a really important point that you raise, and as importantly, that people should seek guidance or advice around their own personal objectives and needs. Justine, thank you so much for your time today. We've covered a lot of ground on a topic of significant interest for members and our listeners. So, thank you for your time and I look forward to having you back in the future.

Justine: Oh, it's my pleasure. So, thank you very much 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. 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.

Australian super 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 David, a member of AustralianSuper. Welcome, David, and thanks for joining us today.

David: Thank you.

Shane: Before we get into retirement and your life to retirement, from what I've read and heard, you've had a very interesting life. So, tell us a bit about David.

David: Well, David came to Australia 60 years ago, at the age of 27, got a job immediately with Ford Motor Company.

Shane: Right.

David: With superannuation.

Shane: Excellent.

David: But it was voluntary then. So, four years later, when I quit and went to another job, a better job, more pay. I collected my super that I'd contributed and I spent it. And I got super in the next job.

And after six years of that, I quit, went back to Ford. I was invited back to Ford. And I got my super in my hand and I spent it. I put it, I was to deposit it on a house, but I spent it. So at the age of 37, I took a look at myself and said, you've wasted about 17 years with no superannuation, and it's not going to be all that long before you retire.

It seemed a long time at the time, but... I needed to start being serious about it. Now, Ford had a very good superannuation scheme, and I was lucky enough to be in senior management, it was very good.

But I retired at 55 because I had been working overseas, and I came back to Australia in 1991 on a very good deal and had put quite a bit in my personal savings account. But my superannuation was not worth very much. In fact, I retired after about 18 years of countable service with Ford with about $350,000.

That was in 1991. Now, that sounds a lot, or it may sound a lot, but it wasn't a lot. Even though the retirement experts said, yeah, you can live on $25,000 a year, I found that to be nonsense because my first year's expenditure in 1991 was something like $55,000.

Shane: Yeah, okay.

David: So it was crazy. So, luckily, I walked out of Ford, an early retirement with a nice package, but not much superannuation, and I went to work for CSIRO.

Shane: Before you did that, had you planned on retiring at that stage at Ford?

David: No, but let me explain. In 1991, when I came back from an overseas assignment, the market was in an absolute mess. It was a bad recession, a bad recession, and I didn't want to stay at Ford and watch all the jobs start drifting away. They had an early retirement scheme.

Shane: Like a redundancy type set-up.

David: Where they were encouraging people to leave. And I had signed a contract to say that I would not leave until three years after coming back from overseas.

Shane: Okay.

David: But I prevailed at the time and said, look, it's pointless my staying here. You haven't got any exciting jobs for me, so why don't you let me get what do they call it, the golden handshake?

Shane: Yeah, yeah.

David: And they said, okay, we'll do that. So that's what I did. And as it happened, CSIRO was just looking for a Chief Executive of the newly opened Australian Automotive Knowledge Centre.

It was right up my alley because it involved trying to persuade the companies who make components for cars, persuade them to do more research, which is what the government wanted, and that's why the thing was funded. So I got into that, and it was supposed to be for three years, but it turned into ten.

So I retired for the second time, and then I was overseas again when I got a phone call asking me to go back to CSIRO for another eight years. So I was something like, what, 73, more when I retired.

Shane: So you retired from CSIRO after ten years, you then went overseas, and then they asked you to come back, so you were holidaying, living overseas?

David: It was a holiday.

Shane: And they brought you back and it's been another eight years, yeah, okay.

David: So that's why I was lucky.

Shane: Yeah. Well, as we talked about earlier, hard work turns into luck sometimes.

David: Well, I was lucky because that enabled me to put as much as I possibly could afford into superannuation. And the superannuation scheme at the time was a lot looser than it is today, so I was able to tuck it away and wound up with a pretty handsome nest egg.

Shane: So let's wind back to the beginning. So you came to Australia in your 20s and you started at Ford. Where did you migrate from?

David: From Zambia.

Shane: Okay.

David: It was Northern Rhodesia when I left there, but it was becoming independent.

Shane: Okay.

David: People were being killed and hassled and I had a wife and two babies and it was impossible to tell, really, I was lucky enough to be able to leave. But people who had been born and bred there and had property there, they found it impossible to leave because they couldn't sell what they had, very difficult for them.

Shane: And was there connection to Australia that made you choose?

David: Well, if you're living in paradise, which is what it was in Africa at that time, and you know you've got to leave, where are you going to go? You want to go from one paradise to another. Somebody told me that Australia was paradise, but don't go there unless you can afford to be unemployed for a couple of years. It might not be easy to get the right kind of job, which was nonsense, because I walked into a job within days of arriving in Australia.

Shane: Yeah. So you landed in Melbourne.

David: Actually, somebody got me an apartment in Ocean Grove. If you're looking for a job...

Shane: Although Ford is not far from it, I'm assuming you started at Ford Geelong?

David: Precisely. I called Ford in Geelong and said, I've just got here. Have you got any jobs? Thinking they would offer me a job in the factory. But in fact, they said, what do you do? I went for an interview. They said, what do you do? And I told them and they said, oh, I've got just a job for you in the head office.

Shane: What was the role that you started at Ford doing?

David: It was called a purchase analyst.

Shane: And so what did that job do?

David: Well, if you're making a motor car, you might make some of the stuff yourself. The heavy stuff, like the cylinder block and the cylinder head, maybe, and maybe a few other things, but the body stampings, the outside panels, you'll probably make most of those yourself.

But everything else you're going to buy, the wheels, the tires, the steering wheel, the seats, the roof, all that stuff, the glass, battery, you name it, got to buy all that stuff. So there was about 100 and something suppliers around Australia who were selling parts to Ford.

Now, if you're going to buy those things and you're going to buy sort of 50,000 sets of stuff per year, you're going to be a bit choosy about what you buy or how much you pay for it. So you need to understand, you don't just say, look, I want to buy a wheel, and get three quotes and take the best quote, you're going to say, how much you're going to charge for 50,000 wheels? And it'd be 250,000, wouldn't it, five wheels a car. But you want to understand exactly what material it's made from, how they test it and how they design it.

Shane: Yeah, of course.

David: Transport it and all that. And you add all those costs together and you say, well, this is what I reckon it should cost. And the supplier says, well, this is what I think it should cost. And you negotiate and you get the price. That's what the business of purchasing and procurement in a motor company is all about.

Ford just in 1963, had just opened the factory in Broad Meadows, and they were just cranking up the volume, and it got to 50,000 a year. And so my job was the analysis of those costs. A cost analysis job.

Shane: And you progressed significantly through Ford. I would have thought that first role gave you a really good insight of cost drivers of the organisation.

David: It did, except they decided that they wanted to train me for something else because automation was just beginning. And so they sent me to IBM for training with computers and I thought that would be magic. So I learned about that. I learned about systems analysis. But by then I decided that there was a better opportunity, more money in a job in Sydney. So, I moved to Sydney.

Shane: Okay, with Ford or?

David: No, no, with another company who happened to make motor car parts, air conditioning, heaters, that sort of stuff.

Shane: It's an industry that obviously was quite significant in Australia that doesn't really exist now does it?

David: It was growing then and it was important to Australia. And it was an important employer. And there were lots of migrants coming in. And they needed jobs. They needed the kind of jobs that Ford was offering.

In the factory at Ford, there were something like 17 different languages spoken, so we can imagine you want to put up a notice saying, warning or don't come to work on Friday, you got to put that up in 17 languages. It's a complex business.

Shane: Absolutely. Yeah. There's a couple of different timings you talked about, so the first I think you talked about your first early retirement from Ford, was that around the '91 period, with the market and high-interest rates? So you had a significant market environment. And then, looking forward, there was obviously the GFC in 2008, which was also a period of time where you might have been making some decisions around your future. Is that right?

David: Yes. Well, at the time, I had my money with a private bank that's supposed to give special service to people who've got a bit of money. But it was all for their benefit, not mine. Their fees were high, and it took me quite a time to realise that there was a better way to do things. And a financial adviser friend of mine said, "Put it in AustralianSuper." Best bit of advice I ever got. I did that, and I stopped paying something like $15,000 to $16,000 a year fees. It went down to less than $1,000 a year, something.

Shane: And so you saw an advisor. Was that at around the GFC period, or is it just a separate time?

David: That was about 2012.

Shane: Yeah, okay. Yeah.

David: I'd suffered by then from the GFC, where I think my super went, it was about half.

Shane: And you were still working then, or you'd retired again, for the second time?

David: I had a third career, I was teaching English to medical people because there was a need for that at the time.

Shane: Tell me about that, because your wife was a teacher, is that right?

David: Yeah.

Shane: Okay, so tell me about that transition to English teaching.

David: It was 2008. I was still working with CSIRO, and my wife was getting more and more people coming to her for help with English, medical people who need to pass a very high-level English exam in order to get registration. So they needed help.

And she was getting more and more clients. So as I wound down from CSIRO, I thought I could be more useful to my wife and help her out if I had the certificate that said you can teach English to professional people. So there happened to be Cambridge University was putting on course for teaching English to adults. I took that course, started another career.

Shane: And how old were you then? You're in your 70s, early 70s?

David: Yes.

Shane: And the motivation for that was to help your wife or was it also an element of self-improvement?

David: Also to keep the brain working. At that stage, there was a lot of talk about Alzheimer's, and I became pretty concerned about not wanting Alzheimer's. My father had died from dementia at the age of 78. So I was approaching 78 and I thought, I haven't got long to go, I'd better start taking all the precautions. So keeping the brain active was the most important thing I did.

Shane: Yeah. And so I understand you still do a bit of that. You and your wife have a bit of a daily competition. Tell me about that.

David: That's just over lunch. We do the crosswords. Yeah. She does the Target. I do the Ken Ken, Sudoku. We do the cryptic and the quick crosswords. And we have a competition.

Shane: Who wins?

David: Pretty even, pretty even.

Shane: Yeah, okay.

David: It's amazing. You know, 15 years ago, I would have been quite a bit ahead, but she caught up. She's a smart person.

Shane: Well, does the loser have to do the dishes?

David: We've got a good dishwasher.

Shane: It's interesting because I know, obviously, you've talked about keeping the mind active. You also do a bit of physical activity as well.

David: I bought a contraption, that exercise of the upper body, and I do all that. And we've got a walking machine I just want to keep reasonably fit.

Shane: Yeah. So through the period of your career change, and you said you had two children, is that right?

David: I got four children.

Shane: Four children, right.

David: Two from the first marriage.

Shane: Yeah.

David: And two from the second. The youngest is 44, the oldest is 63, I think, and they all live within 10 kilometres of my place.

Shane: Perfect. Lovely. It's a close family. Yeah. So during the period, so your wife now was teaching. Was she in and out of the workforce during that period of time through home duties?

David: No, actually, in the 80s, she had a lovely job. She was really passionately following this job. But I uprooted her and the kids and took them to Taiwan to work with Ford. And that was an interesting place, but it was pretty tough. The culture was totally different, and I was working seven days a week. And it was a tough time for the family.

But we struggled, we got through it, and it was very lucrative. That was important to me because having been divorced and having been at 37 with nothing, absolutely nothing, I needed to put money away. And overseas service was good for that.

Shane: So that life event of the first divorce influenced your decisions around where you wanted to be going forward...

David: Actually I can't pretend that I had a big life plan. I really took what came. I think opportunities presented themselves, and people offered me jobs. I did apply for the CSIRO job, but I was asked to apply. That's the only job I ever applied for. Lucky, I say lucky.

Shane: Well, as I said before, you say lucky, but you've obviously, clearly impressed a lot of people over the journey to have those opportunities.

David: I don't know about impressed. I've annoyed a lot of them.

Shane: They gave you the job to keep you quiet. So, you talked about the financial planner that you saw, which resulted in you changing your superannuation, your wife's superannuation, so generally, when we're looking at retirement, we're looking at it as a household event. So did you both go and see the advisor? Was it a formal conversation, or you said it was a friend?

David: It was a friend.

Shane: Yeah. Okay. And so beyond that guidance, where else have you sort of sought your financial decision-making thoughts from?

David: Well, I know where the money is. I chose the different forms of the different makeup of the funds in superannuation. I made sure that my wife had more in her account than I've got in mine, because she's six years younger than I and therefore I'm likely to go first.

And I wanted to make sure that she was secure. I wanted to make sure there was something to leave for the kids. And that raises the point that currently there's a debate going on about whether people who die and leave their superannuation to the kids, whether that's really moral or fair.

And I can understand how it happens, especially in my position. I don't know how long I've got. I'm 87 now, so there's not all that long to go. And I want to make sure that I'm comfortable for that time. But what happens if I live till I'm 100 and it's not out of the question. As I joke with my GP, he signs the script for pills that keep me alive. And I'm saying to him, how do you feel about world overpopulation? And he laughs, but he still gives me the pills.

Shane: Yeah. So, that point then, about funding your retirement, so I understand that you're a self-funded retiree, so your superannuation is your primary source of income. Is that right?

David: Only source of income.

Shane: Okay. And so you draw an income stream, a monthly or fortnightly payment, and your wife does the same thing?

David: Yes.

Shane: Okay. And so your draw down amount that you take on a monthly basis or fortnightly basis, you said you're a little bit concerned about whether that will last as long as you?

David: Well, no, it's a consideration. I've made sure because I'm pretty insecure underneath it all, having been, having lived through the World War II, there's something insecure about me. I've got to make sure that I've got enough money to do what I want to do.

So I've made sure that I've got enough. She's got enough. We've both got enough. And in fact, on the way, I was lucky enough to be able to afford to lend each kid the money to buy a house and interest-free, and they paid it back, and that got lent to the next one and the next one.

Shane: Yeah, right, okay. But clearly you've had a pathway of what's important to you and ensured that your financial situation supported that the best you could.

David: And I feel so sorry for the people, the younger people today who are not able to get into their own home. I think it's terribly important for people to have their own home, and I'm terribly sorry for the people who can't do that.

Shane: Yeah. It's difficult. And I think you mentioned earlier about how you regretted accessing your super, but also the reason you did it was to buy a home back then.

David: Well, yeah, that's true.

Shane: And so, beyond the things that you and your wife do to keep yourself active, what else do you do in retirement? Are you travelling?

David: I'm a bit of a handyman.

Shane: Yeah, okay.

David: I take a pride in making sure that anything that goes wrong in the house, I can fix. I have a good tool set. Ford still provides me with a car, so I don't tinker with cars.

Shane: Yeah, okay.

David: And really, to tell the truth, I'm not all that interested in cars as cars. My formal studies have been in logistics, and I'm interested in the role that cars played in helping society get where it is today.

Shane: And so you said you're very handy, and you've also got your family very close. Does that mean you're called upon to do handyman duties?

David: No, I don't think they'd trust me.

Shane: But is it true that you actually built the house that you're in now?

David: Oh, no, I didn't build it, but I influenced the design. I got a proper designer to design the thing. But saying I want this thing or this thing. Or I'd say I and my wife said we want this here, this there...

Shane: Of course, of course. Are you doing any travel in retirement?

David: Yes, we've been sort of away every year.

Shane: Okay, good on you.

David: And we belong to an Institute of International Affairs, and that meets pretty much every week. We have lectures and talks, an ambassador that's visiting, we try to capture them, and they talk to us, and we have talks from experts on international affairs. Keeps us active, keeps us interesting.

And we've been to most of the places anyway, and we've been to lots and lots of interesting places. We've been to a lot of the historical Rome places and all that. We've had a very, very lucky life.

Shane: You keep saying the word lucky. It sounds like it's...

David: Well, the more you say how lucky you are, the better the luck gets.

Shane: And the more appreciative maybe you are. So just to finish up, David, what's some tips that you might want to give some of our listeners about thinking about retirement?

David: Well, it's funny, it was just a couple of days ago, I was talking to the person who cut my hair, and I said, have you got superannuation? She said yes. I've had superannuation. She said, "But, I was in my mid 30s and became a single mother with three kids." She said, "But I had superannuation." Now, she hasn't taken much care over managing her super.

She just says, "Oh, I just leave it alone." I did what I could to encourage her to take more interest in what kind of super, what the mix is, how it's performing, go to the meetings to learn about what the superannuation fund is doing. She talked about her first fund with high fees.

So, I encouraged her to take more interest, and I would encourage anybody to take a real interest in where their superannuation is and how it performs and what the opportunities are and what the risks are and what the rules are.

Shane: I think that tip that you provided there to take interest in the super, the really key point there for me and something we try to educate our members on, is whilst some people don't see the money coming out of their pay and going into this, it is their money. It is your money, and you should take interest.

David: The money that the company is putting in is your money.

Shane: A 100%. It's all your money. And if you had X thousand dollars under the couch or in the bank, you would take ownership of it. That's what people should do with their super. I think that's a really good tip. So, David, thank you so much for joining us. It's been really enjoyable talking to you. You’ve had a fascinating life. All the best for what comes next and thanks again for coming in!

David: My 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 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 that are found through various channels. And mostly those questions are relevant for many members, so we thought it'd 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 Jaclyn Livingstone, an Education Manager at AustralianSuper. Welcome, Jaclyn.

Jaclyn: Thanks, Shane. It's nice to be here.

Shane: Today's topic is what happens to my super if I die? So not an uplifting topic, but a very common question that we do get from members. Can you talk us through what actually happens to someone's super when they die?

Jaclyn: Yes, it's quite a common question that does come up. Often we hear from members, what happens with my super when I pass away? In that case, it will depend on what that person has as their beneficiary, if they've made a beneficiary option. So that's a very important thing to do.

And one common thing that does come up is that often people think that their superannuation is covered by their will. That can be quite a common misconception. So it's an important thing to look at.

Shane: Okay, so a couple of things there. Let's talk about beneficiaries for a minute. Can you talk us through firstly, what type of beneficiaries can someone have and then how does someone go about nominating a beneficiary?

Jaclyn: Yeah, there's a few different options when it comes to beneficiaries. They can make a binding nomination, they can make a non-binding nomination, and they can also do a reversionary nomination if they're at the stage where they're starting to do their retirement income.

So, a few different options there. It's a simple process we try to make to actually nominate a beneficiary. All you have to do for those that want to do a non-binding nomination, they can easily do that online or they can give us a call over the telephone as well. So some pretty easy options there.

For a binding nomination, they do need to complete a special form. So, it's a little bit more of a formal document that they need to complete. They get it witnessed by two people as well so that it's legally binding.

Shane: So can you tell me the difference between the binding and non-binding? And just to confirm, you talked about reversionary, which we'll come back to, but binding and non-binding, does that just apply to someone's superannuation account or it can also apply to their pension account?

Jaclyn: Very good question. It could apply to both your superannuation account or it can apply to your pension account as well. So you've got both options for those binding and non-binding options.

The difference between them is that the binding nomination is legally binding on the fund. Depending if the nomination is valid. So that is something sometimes that people do prefer to have that gives them a little bit more peace of mind, whereas the non-binding nomination is essentially like a preference.

So, it's who you'd prefer to receive the funds, but at the time of passing, the fund does have to check the rules and laws at the time to make sure that's the person that will receive those funds.

Shane: So you talked a minute ago, you said if they're eligible. So who could someone nominate as a beneficiary for their super, who could be paid?

Jaclyn: Yeah, this is a common thing that comes up that can be a little bit confusing for people. I've seen some interesting nominations in the past, but a valid nomination under superannuation law is that it has to be either a dependent person that could include a spouse or a child, or it could include a financial dependent or someone that's interdependent.

So, someone that you're typically living with and caring for. The other option, because a lot of people I might meet, they might be single or they don't have dependents, they can always nominate a legal personal representative. So this is where you're nominating for your super to be paid according to your will.

Shane: Okay, let's go there. So tell us about how that might work, if someone puts their super as part of their estate.

Jaclyn: Yeah, so, a person can nominate, if they've made a will and they've nominated with their superannuation, they've ticked that they wanted to nominate their legal personal representative, then that means that their superannuation will be paid according to the instructions that they've put in their will. But it is important that they also do the will so that the instructions are there.

Shane: So if someone nominates a binding beneficiary, but they also reference their super in their will, does the fund still apply the binding nomination in relation to their payment?

Jaclyn: Yes. So in that circumstance, they will pay the beneficiary according to what is in the binding nomination as long as it's valid and at that point in time, yes.

Shane: So I assume, considering the binding nature of a binding nomination, it's important that people review their beneficiary nominations?

Jaclyn: Absolutely. It's one of those things that's very easy for people to put to the back of their minds, but it is something to keep up to date. And that's why with a binding nomination, we have a lapsing nomination where it's required to renew this every three years so that we can keep it at the forefront of our minds and we always notify people as well to say it's up for renewal a few months prior.

Shane: Excellent. So it's really important people keep track of that. So the other nomination that you talked about earlier was a reversionary nomination. So that's obviously for someone who has a pension account. So, again, for our listeners, they're receiving an income on a regular basis. They're retired, they got access to their super. Explain to us a reversionary nomination.

Jaclyn: A reversionary nomination is where a person, typically a partner, would receive the income that the deceased partner had been receiving. So the account is essentially set up in the surviving partner's name, but it just keeps the income flow similar to what they had been used to when their partner was around. So it keeps their income needs at somewhat a similar level.

Shane: So in simple terms, the account that was in the member who's passed on basically becomes the account of the surviving spouse, and they continue to receive the income. And if they've already got an income stream, they're just receiving two income stream amounts equivalent to what the family got previously.

Jaclyn: You're absolutely right.

Shane: So, Jaclyn, what if someone doesn't nominate a beneficiary?

Jaclyn: Oh, it's a very good question, because it depends a little bit, essentially. So the fund can always check to see if there's dependents in that person's life that may need to receive the funds, or they may look to pay the funds according to that person's estate.

So, it would either be directed according to their will or what the state laws are. This sort of reinforces why it's really important to make a will and provide your directions, because otherwise it might not be as clear cut at the time of passing. So it's an important thing to do.

Shane: So make a will or make a nomination a beneficiary.

Jaclyn: Absolutely.

Shane: Last question, for people that are receiving payment after someone's passing, whether it be a beneficiary or through a state, is there any tax payable?

Jaclyn: Yeah, this is a common one that comes up as well and can catch a few people out because it's quite a complex thing to understand and there'll be a few different things that impact whether tax will be applied.

One of the most known things is that it depends on the person that receives the fund. So whether that person is considered to be a tax dependent, so that can include a partner or a child that's financially dependent on you. That could be up to the age of them being 25, or if they're disabled, that can be longer than that as well.

A financial dependent for tax purposes could also receive funds tax-free. Or a person that's interdependent on can also potentially receive funds tax-free. But it does get a little bit more technical because it does depend on how your contributions are allocated in your account.

So whether they're under the taxable component or the tax-free component, so it can get a little bit more tricky. And this is where sometimes when people are doing their estate planning and they're working with a financial advisor, it can be really good to work on this strategy because there can be ways for people to potentially save on the tax that their beneficiaries would have to pay.

But a common one that people often get pulled up on is when they have an adult child that's not dependent on them, they can sometimes be subject to paying some tax on what they receive from their benefit.

Shane: Great. And so you'd refer to someone who can seek advice, but also the ATO website or call AustralianSuper.

Jaclyn: Absolutely, yes. Yeah, it can get a little bit more complex down that side of things.

Shane: Yes, it definitely sounds that way. Thanks for joining us today, Jaclyn.

Jaclyn: 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 people.

Australian Super has the privilege of three 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 Lisa Defazio, a member of AustralianSuper. Welcome, Lisa and thanks for joining us today.

Lisa: I'm pleased to be here.

Shane: So before we get into talking about planning for retirement or life in retirement, tell us a little bit about Lisa.

Lisa: Okay, so I am Melbourne-based, always have been. I was working in fashion for quite a long time and that's one of those industries that have kind of been affected by global changes and things like that.

So I've adapted what I do and through sort of self-teaching and learning, I've moved more into graphic design and that sort of area. So still within the design space, but the work that I'm doing now is more part time or contract.

So I'm looking to the future and sort of considering what next and how do I want to change things up looking towards retirement. I am 54, so I think I'm young and I think it's important to really appreciate every year, even though we're growing older. So yeah, it's probably going to happen sooner than later for me and I want to enjoy that stage of my life.

Shane: Excellent. So tell me a bit about the fashion industry. So what were you doing in?

Lisa: I studied at RMIT. I was sort of the most naive girl there all the way from Thomastown and met girls and had a great friend and she was from East Melbourne and I remember we had a chat and she said, where are you from?

And I said, I'm from Thomastown. She said, where's that? And I said, where are you from? She said, East Melbourne. I went, oh, where's that?

Shane: The MCG.

Lisa: That's how green I was. So I've been really lucky. I had worked before I sort of graduated. I worked in bridal wear and then I worked for larger companies designing for Maya and things like that in Children's.

Later went on to do some bespoke work when my children were small. So dressmaking basically. And yeah, I've worked in all different facets.

Shane: And you mentioned that things changed in that industry. So I'm assuming you're off-shoring and other things and you made the decision to use your skills in other ways.

Lisa: So then within that fashion space, I was sort of doing, you know, using software that was creating digital graphics and things like that that went back onto surfwear and that's kind of progressed through the years and I'm working more in that marketing space.

Shane: And am I right you and your husband have a graphic design business?

Lisa: Yeah, that's right. And I sort of work in special projects. So if there's something outside of the scope of what we normally offer, that's up to me to sort of investigate that.

So that might be in sourcing products or prototyping and I do a lot of pitch decks as well for different people and sort of getting an original idea and articulating that, whether that be a physical product or a presentation around that.

Shane: So the creative side.

Lisa: Yeah. And then I do a whole lot of other creative because I've got the time now. So yeah.

Shane: And so how long have you had the business?

Lisa: My husband's had the business for 30 years. I've only been involved for the past 10.

Shane: So the transition from fashion into graphic design was assisted. The fact that your husband had that established business and then you were able to utilize your skill set.

Lisa: Yeah, exactly.

Shane: Very interesting. So from what I understand is when COVID hit, you started to think differently about life and then potentially what the future looks like. Can you talk me through your thinking there?

Lisa: Look, I think with COVID, there was a real contraction around everything and particularly with our freedoms and things like that. And so I think it's very important to try things.

And I think rather than saying that something has ended or something has ceased, I embrace it as there's been change and that you're able to move forward from. So for me, post-COVID, I really want to get back to enjoying things and I want to really dedicate time towards those things that reward me. They might never become the most successful thing. It just needs to make sense to me.

Shane: I think many of us looked pre-COVID and we were on that wheel of busyness and everything else. And so you've rechecked yourself in that period and said, "Well, is that actually where I want my future to be?"

Lisa: Yeah. And I think COVID has released us from a lot of the have-to's. So there were a lot of obligatory things that we do because we think it's going to please somebody else. And I think it's actually shaken things up in a really positive way because people just have got it now.

They're like, you know what? I just need to please myself. And we have space to do that. And people are genuinely happy for you if you go off and do your own thing and don't do the obligatory thing, whatever that might be, or the expectation. So yeah, I'm very happy making sculptures.

And, you know, I'm doing all those things that I thought wasn't within my realm or within perhaps my, I'd miss that space. Or I could've, would've, should've been a sculptor if I wasn't a fashion designer or... So now I'm kind of just doing everything, all of it.

Shane: So thinking about retirement, you are very young. So the traditional retirement is not upon you yet. But it seems to me that you've reprioritised where you're spending your time. And so that's resulted in reducing your work time.

Lisa: That's right.

Shane: And so when you start to think about that, what are the things you were considering when thinking, "Okay, I really want to spend more time having fun or doing things of interest or pushing myself..." What sort of process did you go through to make that decision beyond the desire to do some cool stuff?

Lisa: Yeah, well, look, I think you need to really consider financially where you're at in terms of retirement. What I've done is I've actually very recently had some financial advice and I think getting that has been revealing to have a stranger say, "Okay, tell me, show me, you know, where you're at."

And then for them to come back to you and say, "Did you know there's 17 different options you've never thought of before?" And it really opened up my world. And I think instead of thinking in terms of the house, my life, retirement, finances, I'm now thinking in terms of sell this, go here. You know, like it's a freedom rather than a constriction, which I find it's been a revelation.

Shane: So tell me a bit about the... I just want to delve a little bit more into this financial advice piece because it is clearly an important part of not just retirement planning, but any form of planning for those that can afford to receive that advice.

And there's other options available around help and guidance. So firstly, how did you find the advisor that you ended up seeing?

Lisa: I got to the point where I thought, I don't know what to do anymore. And rather than being sort of reactive, I thought I'd be proactive. And I was just having conversations with friends and saying, do you know anyone? Have you sought this? Have you sought that?

And it was an advice from a friend to contact someone. And look, honestly, I was very lucky. We had a couple of sessions that weren't charged to us. And it gave me enough information to sort of shake up my thinking.

Shane: And then you went back for the full...

Lisa: Not at this stage, but it's opened my eyes and it's got me really thinking about how rather than feeling weighed down, you can really be nimble with your assets and your life.

Shane: So when you went to see the advisor, did you have sort of a firm view around what you might get out of that interaction? And then were there any surprises in what actually you did receive?

Lisa: I had no preconceived ideas. Finance is not my thing. I'm not a numbers person. I'm not. I just... I deal with facts. I'm very sort of grounded and factual. But it kind of got to the point where, okay, I'm not working as much as I used to. And what do I want to do moving forward?

The house is too big, the children have grown up and left. And what would be a smart move? So I was open to hearing what he suggested. And what would be the best way to use what we've got, the assets or whatever is happening within our finances. And I was just completely surprised by suggestions to say, yeah, sell this, do that, all the emotions taken out of it.

And it's like, you can maximize your future. You can actually build on what you've got. And it was like, oh, okay. So it's not the full stop. It's actually the starting gate. So yeah, it's exciting.

Shane: It is exciting. And I think it's a common theme we hear from people who are seeking some form of help is they don't know what they don't know.

So for you, it seemed like for many people, there's sort of this black and white, I've got this asset, I've got super, I've got an income. And that's my future versus the diversity.

But am I right to assume I'm sort of sensing there was an element of confidence and emotional relief, for lack of a better term, about some of the information that you were receiving. It wasn't just a transactional financial conversation.

Lisa: Yeah, that's right. That's right. I think it's just about being shown options. And you don't know what those options are. It's like anything you go through the first time, the first time you buy a house or the first time you buy a car or have a child. We don't know what that landscape is like.

And I think that approaching this sort of space where it's like, I am living like I'm semi-retired. I'm fortunate enough, which led me to think, well, how can I make what I've got work for me? And working in a creative field, I've had different jobs. And when I started work, Super wasn't compulsory. So I'm of that generation that took it on later.

Shane: And so the last couple of questions around the advice process is that am I right to again assume that this advice has built some trust with you through this early process?

Lisa: Yeah, absolutely.

Shane: And so if you were to look to go back to get advice of a more tailored nature, whether it be a statement or advice, is that someone you'd probably turn to?

Lisa: Definitely, definitely. And I think what I'm trying to do at the moment is really look at my motivations moving forward. You know, what do I really want? What is really important to me? What motivates me? What excites me? What's going to still excite me when I'm in my 60s? And what do I want to have done leading up to that? How do I want to live when I'm older?

Shane: And are you thinking at the moment of that motivation and moving ahead, have you got a plan? Are you thinking five years ahead or are you sort of just taking it a bit shorter term than that?

Lisa: Yeah, definitely shorter term. But in the long run, I want to be the lady that's like 90 at Glastonbury, you know, at the festival and maybe, you know, just going wild.

Shane: Well, I've just noticed that Guns and Roses have played there in the 90s, so you might be okay.

Lisa: Well, you see, and I think it's really nice. I just think that older people are being embraced more. You know, you've got the cool grannies on TikTok and God knows. There's hope for me yet. I'm yet to be famous. So you know...

Shane: You've got plenty of years ahead of you. But it is even one of the things that we're picking up through this podcast is the enjoyment people are getting in that retirement phase, but the things that they didn't realise they could do and the different things that they're trying.

And it's very clear from the short time that we've known each other that you're willing to open yourself up to new things. Going back again to the process, you were given some ideas from the financial planner and different things you can think about.

Are there any particular actions you took, so financial actions that you took, e.g. doing something with your super or other things that you hadn't done before that might help you progress your retirement?

Lisa: What it made me do was actually look at what I was spending and he gave me a great bit of insight to more or less say, you know, have a look at what you're spending now and then you need to have that as a projection to what you're going to live on in the future plus inflation, of course. And that was startling. It was absolutely gobsmacking the amount of money that I need to live on a day.

Shane: Well, compared to what your current spending habits were versus a budget, is that what you're...

Lisa: What's a budget? Like, I just haven't been thinking that I'm spending a lot of money. I think I'm quite sensible. I don't...you know, I suppose I...my treating myself is eating fine food or seeing something at the theatre or something like that. But that doesn't happen all the time or I didn't think it was, but it does.

Shane: So when you went through that spending and I've been through the advice process myself, is they categorize your spending into different categories?

Lisa: Well, look, I did my own because he said, this is what we need to do. And I thought, well, I need to know where my head's at. So I thought, well, maybe I can, you know, and I went through and I sort of itemized. And most of it was on eating and going out.

And my children don't live with me anymore. There's only two of us, a dog and a cat. Yet I'm spending all this money and it made me stop and think, oh, you know, be sensible.

Shane: Yeah. And so did you put a budget in place as a result of that process?

Lisa: I'm just more wary. I'm just a little bit more, "Oh, okay, that was a $70 lunch or what have you." Like, whereas before I wasn't thinking about it and I'm just being a little bit more prudent.

Shane: And how does that line up? Because you want to do things that you enjoy and you're motivated by. And then there's obviously the flip of that is at what financial costs, is that hindering each other at the moment? Or you just say being aware of...

Lisa: No, it's more just being aware.

Shane: Yeah. And so when you say that's the now, is there anything in relation to the future? So super, for example, have you done anything different with your super?

Lisa: A few years ago, I topped up my super, which I'm really glad I did. So that's been positive. It's more about what I do with the larger assets and what I want to do moving forward, what you sell, where you live and so forth. But being mindful.

Shane: And that hasn't, those things around other assets or where you live, you haven't changed anything at this stage. You're just thinking what you might do.

Lisa: Not at this stage.

Shane: And the other question around the advice process or the thinking process, was your husband involved in that conversation with the advisor?

Lisa: Yes, he was. He was. And he is a successful businessman who has, you know, he's very talented and he's made some very good moves. And I think we both had a really traditional fixed idea around this is the house. The house is everything. That's it. Then there's retirement and that's your super.

And I think it was like almost, you know, the light bulb moment when you sort of learn that, oh, you don't need this. You don't need that. You can move here. You can, you know, just to shake it all up. You know, not everything is set in stone.

Shane: And so he's still working full time?

Lisa: Yep.

Shane: And is that through requirement, enjoyment?

Lisa: He loves it.

Shane: He loves it?

Lisa: Oh, he would work 12 hours a day. That's his happy space. He thrives on it.

Shane: So when you're thinking about it as a couple about, so you're, I want to use the term semi-retired, but as I say, it feels awkward because you're so young to, you know, it's more about... So you're thinking that and you've decided what you want to get out of life. He's thinking, "I love work, work is a key motivator for me..." And so do you think there's a time where he'll think about retirement or he's not quite there yet?

Lisa: No, I think he'll work as long as possible. I think it's what makes him tick.

Shane: And does he, so as far as funding retirement, if, you know, if he ever does retire, and we see that a lot where people continuing to work for as long as possible. They might reduce work hours or other things. Is the business a big part of his financial retirement plan?

Lisa: Yes, yes.

Shane: So that he would look to possibly sell or offload that if that was the case.

Lisa: Yeah.

Shane: Okay. So when you move through to possibly accessing a superannuation, you're meeting preservation age or accessing age pension, is that something you've thought about yet?

Lisa: It's a while off. Yeah. And I do continue to work and I am continuing to explore different options. And I think for me, I'll always be active in a workspace or in a productive sense.

Shane: Yeah.

Lisa: That does make me happy, but it's not necessarily in a business sense.

Shane: No, no, it makes sense. I get it.

Lisa: It does.

Shane: So a common sort of question we ask people is that you had this epiphany for lack of a better term during COVID that you want to spend more time on the things that you're passionate about and enjoyment. So you had a vision. What's reality like compared to that vision?

Lisa: It's great. It's great. Look, I think for me, I think a lot of people think they want to do, you know, one thing or they've got this one unmet desire, whatever that is, it might be creating something or, you know, it'll be this one notion and they might hold it really close to their chest and it's so precious and it's so hard and they'll give it one go.

Whereas I think just swing away. Just go for it. Just to have every mad idea, do them all. It's for myself. It really is. And it satisfies me. I've made short films. I write. I do... And it makes me feel alive and I want to do that moving forward into retirement and that's, I want more crazy ideas, you know?

Shane: So I was going to ask you, tell me something you've taken a swing at, but you just told me you've made some short films and--

Lisa: Oh, and I write scripts. And I entered them into various competitions and things like that.

Shane: Anything famous you should be looking out for?

Lisa: I've got a YouTube channel.

Shane: Yeah, all right.

Lisa: So it's been quiet for a while.

Shane: You can give a YouTube channel a plug?

Lisa: Yeah. So it's just my name, Lisa Defazio, and it's called Have You Got a Minute. And that was prompted by a real fear of public speaking.

Shane: Yeah.

Lisa: And so I did a few courses and I love to shine a light on passionate people that don't really have... A lot of really talented people aren't good at promoting themselves. So it was just, I'd find something, I'd love it, whether it be some food or a restaurant or a band or, and so that channel was about that.

Shane: Yeah.

Lisa: So I might go back to that, but, you know, I think there's a lot of other wackier ideas that I haven't explored yet.

Shane: Give me one of those. Tell me a wacky idea you want to explore.

Lisa: At the moment I'm doing these acrylic sculptures and they're kinetic and they all spin and they turn. And I think that'd be really good for meditation or even if you're bedridden or something like that. It's quite a meditative thing. So, yeah, they're really cool.

Shane: It sounds very cool and you've definitely shown your creative side here and I'm going to go and look at that YouTube channel. One other thing, am I right to say that you got some form of injury to your ankle or leg or something?

Lisa: Yes, yes.

Shane: And as a result of that, it gave you a bit of a view of what maybe... Can you talk me through that a little bit?

Lisa: I had this lovely experience where I was meeting up with a friend in the city and it had been raining. I was in a restaurant and I hadn't even sat down to have lunch and I hit the deck and I'd managed to slip on some water. And my left foot sort of tucked under and I broke a bone on the top of the foot. But I didn't realise this until the bruising went away and I went for a walk.

I thought the foot's okay and I started to jog. And as soon as I went down, I thought, "Oh, there's something very wrong." So I'd fractured a bone. So I had a boot on for eight weeks and then probably a year later, I was walking my dog and stepped backward. And I was on a little volcanic rock and I sort of twisted and I was on one leg with the hands waving.

And I thought, I've caught my balance and then I heard snap and I went backwards and I chipped the bottom of the ankle. So I was in a boot again.

Shane: Same foot?

Lisa: Yeah, same foot, different bone. And it just was cumbersome. I had this dodgy foot. It's taken a lot of time and money and specialist appointments and I was sort of developing a limp because I was, you know, different tendons and things overcompensate. And I was really getting quite wonky.

And I thought, well, this is what aging might look like. So I've been able to recover and I'm still just so grateful that I can walk and I feel good on my feet again and wear shoes that I like and things like that. But it was a wake up call. And I thought, do as much as you can while you're still well enough.

Shane: Yeah. So was that around the COVID time as well?

Lisa: Yeah.

Shane: Yeah. So you're all that mixed together. That's another trigger point for you to say, I need to make the most of X many years.

Lisa: And so and as look, and I think too, like we discussed, you know, being aware of how much we spend and things like that. And I think too, sometimes we need to be a little bit more conservative with our spending and things like that. That can be fun too.

You can eat some really crappy food in a crappy space and have fun around that. It doesn't have to be fine dining. If you can experience enjoyment in what you're doing, whether it be something sort of very standard or something elevated, it's really important to enjoy where you are. And I think moving forward into old age to still give yourself joy is the key.

Shane: Key.

Lisa: Yeah.

Shane: Well, my final question was going to be, do you have any words of wisdom for our listeners regarding preparation and thinking about retirement?

Lisa: I do actually.

Shane: Yeah, fire away.

Lisa: I think that we need to remember what made us happy as children when we were wide-eyed. And I think that they're the triggers and they're the really formative things that make your character. They make you who you are.

And if you can have that in you through the rest of your life, even if you're watching someone ride a bike that you used to enjoy and just remember that tapping into that core of who you are and the joy, where your joy comes from, carry that with you.

Shane: That's great advice, Lisa. Thank you for joining us. I actually have no doubt at all the next journey for you, you're going to make every poster a winner and I've personally got a lot out of talking to you today. So thank you. Thank you for joining us.

Lisa: 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 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 that are funnelled through various channels and mostly those questions are relevant for many members, so we thought it'd 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 Peter Treseder, Education Manager at AustralianSuper. Peter has been educating members for over 20 years. Welcome, Peter and thanks for joining me!

Peter: Thanks for inviting me along, Shane.

Shane: So today we want to talk a bit about accessing your super. So can you tell us when someone can access their super?

Peter: Well, to access super, the technical term is a condition of release. Now, one of those is turning 65 and another is ceasing work after you've obtained your preservation age. And your preservation age depends on when you were born.

So there's a sliding scale. If you're born before the 1st of July, 1960, your preservation age is 55. So you passed it some years back. If you're born on the 1st of July in 1964 or later, your preservation age is 60.

So you haven't reached it yet. Those listening will think, well, what about in between? For each financial year, it increases by one year. So the '60-'61 financial year, preservation age is 56. The next financial year is 57, 58, 59. That takes you up to the end of June, 64.

Shane: So what does the preservation age mean in generality?

Peter: It means that's when your super is available to use, you can get your hands on it and do what you want with it. So there's two boxes you need to tick, that ceasing work and to have reached that preservation age.

So I might stop work because I can stop work whenever I want. If I stop work at 58 and my preservation age is 60, all I can do is smile and wave at my super for a couple of years.

Shane: So you have to be finished work and you have to meet your preservation age to access your super?

Peter: Yes.

Shane: So what about if I reach my preservation age, I retire and then I go back to work a year later and I'm still under 65? Do I have to give my super back?

Peter: No. That super is released to you. It becomes what's, in technical terms, non-preserved, which means you can keep on accessing that as quickly or as slowly as possible.

Your new employer is going to pay new contributions into a super account. You can't access those super contributions till you cease work with that employer because you've already reached a preservation age, but you've got to cease with that employer to get those contributions.

Shane: So when someone can access a super for retirement purposes, what can they do with the money?

Peter: Well, they can do whatever they want with it. They might spend it wisely, they might spend it recklessly. But you've got to realise, the superannuation system, that money is there to fund your retirement.

So you might want to look at how are you going to budget, what you're going to spend in retirement, what are your income sources? Because when you stop work, you're getting no income from labour. Your income is going to come from other sources, usually your super, savings, investments and maybe the government pension.

It's a matter of working out, well, what's my aim of income in retirement and where's that money going to come from? And hopefully you've got enough savings, super, whatever, and maybe the age pension will get you to the level of income you're after.

Shane: So if someone accesses their super through retirement preservation age, they can cash it out?

Peter: Yes.

Shane: Or what else could they do with it?

Peter: Oh, look, they could move it into an account based pension which is still in the superannuation world. So it sits in that concessionally taxed world of superannuation. The difference being, in an account based pension, there's like a tap on the side of your super account and you control that tap.

You can turn it on as hard as you want, the government requires you to take a minimum amount, but sometimes that's a better way of managing money in retirement, because all during your working life, you got a salary each week, fortnight, whatever, and you managed that.

And if you have an account-based pension, you're getting a similar income that you can set up to pay you monthly, fortnightly, once a year.

Shane: And you can still invest the money while you're in that super account as well. So you could actually be invested in a growth asset, a balanced fund, cash, whatever you want it to be whilst it's still in that environment.

Peter: Yeah, it's just like your superannuation account, you can choose how it's invested. And you said, I might choose different options, I might choose one option and I might draw out, let's say, 4%, but the option earns 6%. I've got more at the end of that first year than I started with.

Shane: And is there different tax arrangements for someone in an account-based pension versus when they're in their super or versus taking the money out?

Peter: Look, there's some slight differences. The main consistent one is if you're over age 60, what you take out of super is tax-free.

So it doesn't matter whether you're taking out as lump sums out of a super account or as an income stream out of an account based pension. If you're under 60, but you've reached your preservation age because you can't get it out until you've reached your preservation age.

If it's an income stream, the income is taxed at your marginal tax rate, but you get a 15% offset against that tax. So if my tax rate is $0.30 in the dollar, I'll effectively pay $0.15 in the dollar.

So one of the government's incentives they brought in a number of years ago was the incentive to leave your money in super till 60, because after 60, it's tax free.

Shane: Right. And so someone goes down that pathway of meeting a preservation age, rolling it over into an account-based pension. Is that money locked away or can they still access the super because they've reached preservation?

Peter: They can still access all that super. So, as I said, there's a tap at the side that may be given me $1,000 a week, a month, whatever.

I suddenly decide I need to have a holiday to Europe. I can put my hand in the top of the bucket and pull out a lump sum at any point. And again, I'm over 60. That lump sum is tax-free.

Shane: Yeah. And I think that's a really important point to make, because we do see many people here and many people who get concerned about rolling it into a pension because they think they're locking their money away again, which they've waited so many years to get access to.

So, important point there. You roll it over to an account-based pension, you get the income stream, but the cash is still available anytime you want. It's your money to access for your purposes.

Peter: Exactly. I meet so many members that say, oh, I'm going to retire and take my money out of super and put in the bank, because then I can go use my ATM card and get money out when I want. I say, well, you set an account based pension, you get the advantages of keeping it in a tax concessional world of superannuation.

The account-based pension will pay money into your bank account and you can still use your ATM card and get the money out.

Shane: So, Pete, we've talked about preservation age and retirement and the connection there. What are some other scenarios where people could access their super?

Peter: One is severe financial hardship and another is under compassionate grounds. Now, there's more details on the AustralianSuper website of how you can access that and also the ATO website of what the conditions are to access that.

So severe financial hardship is you're doing it tough and you need money, and there's rules around that. And compassionate grounds are often around a medical issue, treatment or maybe even I've got a partner that needs full-time care, or we got to put in ramps and safety bars in the bathroom around the house, compassionate grounds.

Shane: So if anyone's not sure and might feel like they're in some of those situations, then they can go to the AustralianSuper website or contact AustralianSuper or their super fund, who will be able to guide them through the different scenarios in which they might be able to access their super.

Peter: Oh, exactly. And in my role in education, I always say to people, if you don't know, ask. Even if you're expecting the answer no, still ask, because if you get the answer no, you haven't lost anything. But if the answer was going to be yes and you didn't ask the question, you've missed out.

Shane: Yeah, it's a good tip. So what are some other things, you've talked about tax before a minute ago, what are some other things that people might want to consider before they access their super early?

Peter: Well, it comes down to how long is that money going to last? I mean, I might be able to access my super at 60, but I might not be eligible for the age pension till I'm 67, so I've got to self-fund myself for those seven years, assuming I'm going to get some pension.

So the later you retire, the more you accumulate, and the period of retirement is going to be closer for you, so the money might last longer. So working out what your position is, are you ready, and we refer many members to our online calculator where you can say, look, I've got this much money now. What's it going to be worth? What's going to be in it when I plan to retire at age X?

And the calculator, with a number of assumptions about earning rates and tax, says, okay, you've got X now; in 20 years' time, you're going to have five times X. And five times X will give you an income of 30, 40, $50,000 for the rest of your life, if that's what you're aiming for, you're on target.

If you're aiming for something higher, you've got time to make some changes to your super to build up extra money to give you the retirement income that you're after.

Shane: And so, Pete, you touched earlier about government age pension and Centrelink, government benefits. Are there things that people need to consider relating to their government benefits when accessing super pre or post-retirement?

Peter: Look, it all depends. I mean, when you're applying for the age pension, there's a qualifying and as I said before, if you're born in 1957 or later, it's age 67. The government also have an income test and an asset test.

If your pension age, everything that you own except for your family home, is counted as an asset. And it's the way the government's sort of saying, well, if you've got substantial savings, they don't see as great a need for you to receive a full pension, so you might only get a part pension.

So it really comes down to working out, as I said before, what level of income you're after and what are those sources? We'd all like to retire early, but if you retire early, you haven't given your super time to grow and you may not be able to fund the lifestyle you're after. And the earlier you retire, the more money you're going to need, because you're life expectancy doesn't change just because you retire at age 55 rather than 65.

Shane: So it's important to have some form of a plan, whether it be speaking to a financial planner or at least having some of your own approach to planning through calculators, projections and otherwise.

Peter: Oh, exactly. We promote the use of a financial planner, whether they be an AustralianSuper financial planner or someone they can find through their own resources to get the numbers right. Because Australians have a wonderful three-word attitude towards their retirement planning. It's very Australian. You could probably guess three words, Shane.

Shane: She'll be right.

Peter: That's it. If you add mate at the end, it makes it more Australian, but it might not always be right. And getting some advice around what you're aiming for and where you are now can give people a lot of comfort.

"Okay, I'm retiring in ten years' time, I'm panicking." Well, a bit of a financial advice might see if you're tracking okay or if you'll have time to make some changes to get you to where you want to.

Shane: Thank you, Peter. I think you've given our audience some really good information into how to access your super. As mentioned previously, the information in this podcast is general advice only and doesn't take into consideration your needs or personal circumstances.

If you'd like guidance or advice, contact AustralianSuper or your financial adviser. Thanks again, Peter.

Peter: Nice. 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.

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 organisation.

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 organisation 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 organisation 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 organisation 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 organised 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. 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 favourite.

Shane: Slightly? I've got three boys, so I can't potentially have a favourite 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 realised 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 realised 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 realised 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 realised 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 cancelled 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 realised 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, travelling 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 favourite 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.