2026 Virtual Retirement Event

Hello, everyone. We're glad you have been able to join the event so far today.

We're now going to explore the topic of ways to boost your super.

Many people tell us they wish they had started earlier, but the years before retirement can still make a meaningful difference. This session isn't about complex investing or putting every spare dollar into super.

It's about practical levers that are still available after reaching the age 50. Small, informed choices that can make a real difference over time.

By the end of this session, you should be able to identify one or two potential actions that feel achievable to you. Not overwhelming, or not all or nothing.

My name is Andrew Hambling. I'm an Education Manager at AustralianSuper.

Today, the education team are in the background via the Q&A box to be able to answer as many of your questions as they are able to do so.

There are also a wide range of resources that will be available to you during this session today.

It's important to remember that this content may contain general advice, and we haven't taken into account your own personal needs, objectives, or personal circumstances.

Heading towards retirement can be a really valuable time to pause and review how and when you're contributing to super.

Many people find their circumstances start to change as they head towards retirement. Mortgages may be smaller, the kids may be growing up and more independent, or work patterns start shifting, which can open up opportunities to boost retirement savings in a more deliberate way.

understanding the contributions options that are available later in your working life, and when they might make sense for you, can help you make the most of these final working years, and head towards your retirement feeling more confident.

and prepared. Saving more in super can come with tax and other benefits this financial year, and they can also be ongoing benefits of saving in super. You generally pay 15% on concessional contributions to super.

For those with an income under $250,000. For most people, this will be lower than their marginal tax on their personal income.

Once money is invested in super, earnings are taxed at a maximum rate of 15%. Instead of your marginal tax rate, which can be as high as 47%.

This low rate can help you build up your savings for retirement.

Your returns are after this tax has been paid. At AustralianSuper, we often tell members about the net benefit returns.

after the earnings have already been taxed and fees have been deducted.

When you do retire, any payments you receive from the age 60 onwards, from your super, are tax-free.

And Australians also have the opportunity to transfer their super into an account-based pension. Here, you won't pay any tax on the investment earnings and those income payments you receive from these accounts from the age 60 onwards are also tax-free.

Now, there are 2 main ways to contribute to super before tax and after tax.

Before tax contributions, also known as concessional contributions, include those contributions that employers are required to make under the superannuation guarantee if you are an eligible employee.

The minimum SG rate is now 12% as at the 1st of July 2025, based on an employee's before-tax income.

Along with the compulsory employer contributions are any separate additional contributions your employer might make, as well as salary sacrifice contributions, other reportable contributions, and also tax-deductible contributions.

There is an annual contribution cap of $30,000 for this financial year for all of these types of contributions combined, it is important to note that contributions do caps do change between different financial years, so they might change.

As we head towards the 1st of July 2026.

If you're wondering what celery sacrifice contributions are, this is where you and your employer arrange to have some of your before-tax income paid into your super, and this is on top of what they would pay under that superannuation guarantee.

Making salary sacrifice contributions does actually mean a reduction in your take-home pay, but it also means you could increase your retirement savings while also potentially reducing what you pay in tax.

This is because contributions made via a salary sacrifice arrangement. Once again, are generally taxed at a lower rate than most people's personal income tax rates.

As you can see here on the screen, tax on concessional contributions in the blue circles is 15% if you earn under $250,000. If your income plus your concessional contributions.

Total more than $250,000, you may have to pay an additional 15% tax. This is known as the Division 293 tax. On some or all of your concessional contributions. The additional tax is applicable.

To the portion of the pre-tax contributions that is above that threshold.

In the second column, you can see the different personal income tax rates that currently apply this financial year, depending on your level of employment income.

The difference in text between the orange and the blue circles represent the potential benefit of salary sacrificing.

Another contribution option that often becomes more relevant in your 50s is making a personal contribution to super, and claiming a tax deduction for it. Later in your working life, income is often higher.

And there may be more flexibility. For example, from a bonus, an inheritance, or selling an asset.

For some people, choosing to put part of that money into super as a tax-deductible contribution can be a way to boost their retirement savings while potentially reducing the amount of tax they pay on that income.

Another super boosting strategy that can be helpful later in your career is something called the Carry Forward or catch-up concessional contributions.

This exists because many people haven't always been able to contribute as much to super in their earlier life. This may be due to career breaks, part-time work, or other financial priorities. The carry-forward rule allows eligible people.

To use unused contribution limits from previous years in the current financial year, rather than losing that opportunity altogether.

This can be particularly relevant later in your career, when income is often higher, and there may be more capacity to top up super and lead up to retirement. Now, you don't need to understand all the rules.

Today, the key takeaway is simply being aware that this option exists and checking whether it could apply for you.

with the right guidance. Now, you may be wondering, where would I go to find out if I had unused contributions or what my personal contribution limits are. The place for individuals to go is to check their MyGov account and link the ATO portal or service.

As you can see on the screen, the ATO keeps a record of individual super contribution, caps and balances, such as the carry forward concessional contribution amounts.

Now, the second type of contribution or ways individuals can contribute to their super is after-tax contributions.

One situation that often brings non-concessional or after-tax contributions into the conversation is selling an asset as you get closer to retirement.

This might be something like selling an investment property, a business, or downsizing the family home. Situations that can create a lump sum later in life.

Now, because this money usually has already been taxed, some people choose to contribute part of it into super as a non-concessional contribution, where it may then continue working.

toward their retirement in a tax-effective environment. This isn't about automatically putting the sale proceeds into super. It's about understanding that non-concessional contributions are one of the options available when you're thinking about how to best use a lump sum as retirement approaches.

As with all contribution strategies, the right choice will depend on your access needs, your timing, and your overall plans, which is where getting guidance can really help.

The bring forward rule is a different multi-year contribution rule to the carry-forward rule we just discussed. The bring forward rule may allow you to make up to three times the annual cap amounts using this financial year's cap.

But also the future two financial years of after-tax contributions. This means you may be able to top up.

up to 360,000 in the same financial year. This could help if you've reached your concessional contributions cap, potentially received an inheritance, or made money on the sale of a large asset.

There are a few exclusions to be aware of. If your total super balance is $2 million or more, you can't make non-concessional contributions. Individuals who are 75 at any time during a financial year.

Can take advantage of the bring forward rule, but the total super balance is at the 30 June of the previous financial year, and that will play a part, so it may actually limit the full amount available.

For more information, you can check out the ATO website at ato.gov.au.

Another contribution option that's worth being aware of even later in your career, is the government super co-contribution.

This is designed to support people on lower or moderate incomes who make an after-tax contribution to their super by adding an extra amount from the government.

For some people in their 50s, this can still be relevant, particularly if they've reduced the work hours, moved into part-time work, or had a change in income as they transition towards retirement.

If you're a member of a couple, as you move through your retirement planning, it's important to make sure that it is a shared conversation, and that includes thinking about how both partners super is tracking. It's very common for one partner to have a lower super balance.

Often because of part-time work, career breaks, or caring responsibilities. Now, this isn't actually about equalising super balances overnight or assuming that these options are right for everyone. It's about being aware that in certain circumstances.

There are ways to support each other's super and even receive additional help from the government.

For contribution splitting, members are able to split up to 85% of before-tax contributions each financial year, which includes employer contributions, salary sacrifice contributions, and any tax-deductible contributions.

The receiving spouse must be under age 65. If aged between 60 and 64, they must not be retired when the contributions are split.

If your spouse is over the age of 65, you can't split super contributions.

Any contributions you make to super are counted as part of your contribution limits.

For direct spouse contribution, another option that some couples consider is making a spouse contribution where one partner contributes some money after tax into their spouse's super account to help strengthen that combined retirement position.

When the receiving partner, or the spouse, has a lower income, the higher income earner.

That makes the contribution through to the spouse's account, may be able to receive a tax offset. An 18% tax offset may apply up to $3,000 of a spouse's super contributions.

The maximum tax offset available works out to be $540 on a full $3,000 contribution. There are some considerations. You need to make a minimum after-tax contribution of.

3,000 to the spouse to get the full offset.

The tax offset is available for spouses who earn under $37,000, but there is a partial amount available between $37,000 and $40,000.

The spouse does need to be under the age 75 and the spouse's contribution limits need to be considered.

Another type of contribution, that option that becomes available in later life is the downsizer contribution. For many people in their 50s and 60s, the family home is one of the biggest assets they would own outside super.

When circumstances change, such as children leaving home, wanting a more manageable place to live, some people choose to sell and downsize.

The downsizer rules allow eligible people over the age of 55 to contribute some of the proceeds of selling their home into super, even if they wouldn't normally be able to make those other type of contributions.

This can be a way to turn home equity into retirement savings by moving money from outside super.

into a tax-effective environment designed to support income and retirement.

The home must have been owned by you or your spouse for at least 10 years before the sale. Note there's no maximum age limit on the downsizer contributions. And downsizer contributions don't count towards the non.

concessional or after-tax contribution cap that we just looked at.

This needs to be done within 90 days of the property sale, and can be done regardless of the super contribution caps and age restrictions that otherwise apply.

It is still subject to the transfer balance cap.

For couples, both people can potentially take advantage of this opportunity, which means up to $600,000 per couple could be contributed towards super. There are, however, rules and other things that you will want to be across.

So check out the ATO website for more information on the rules and eligibility around the downsizer contribution.

We're now going to have a look at a scenario for Mark. Mark is 60. He's still working and he's starting to think more seriously about retirement. Earlier this year he sold an asset which has given him some extra money.

But also, he will have an accessible capital gain, meaning a higher tax bill than he was expecting.

Mark is keen to add more to his super and make the most of the stage of his working life. But he's not sure what the best option is, or how different choices might affect his tax and retirement savings. So let's walk through Mark's situation.

and look at one of the strategies people sometimes consider in a year like this.

So, Mark has not used all of his concessional or before tax contribution caps in previous years because his total super balance is under $500,000 on the 30 June prior to now.

He's eligible to use the catch-up on concessional contribution rules.

So, Mark decides to make a $50,000 personal deduction, deductible contribution to super in this financial year.

The $50,000 deductible contribution reduces Mark's taxable income from $170,000 back down to $120,000. So this means the extra income from the capital gain on the asset sale is no longer being taxed.

at his highest marginal tax rate. Instead of paying personal tax of up to 47%, including the Medicare levy on that $50,000, the contribution is now taxed at 15%.

And as we can see for Mark, the potential tax difference is nearly $11,000, around $10,950, while also increasing his retirement savings.

At the same time, Mark boosts his super balance as he approaches retirement.

turning a one-off financial event into a longer-term opportunity.

And this really shows the benefit of understanding the different types of contribution, understanding when they can apply, and receiving guidance to be aware of the opportunities that may be available.

This does bring us to the end of the ways to boost your super session.

And now you can return to the lobby for the next presentation.

Welcome back. I hope you enjoyed your breakout session with either Andrew or Kim.

So far today, you've heard a lot about planning for retirement, including ways to feel more confident, and some practical first steps you can take.

But we often hear members say, this all makes sense, but what does it mean for me? And that's exactly what this next session is about. It's a chance to bring the ideas to life and connect what you've heard today to the real decisions you might be facing right now.

Or thinking about over coming years. We've received lots of great questions from members, and the education team behind the scenes have been answering them as they have been coming in.

To help unpack and to bring to life some of the more common questions, I'm joined by Sam Weaner and Kris Tiberi, who work with members every day on exactly these types of conversations.

Sam is the manager of investment communications here at AustralianSuper, and is responsible for providing education on the strategy and performance of AustralianSuper's pre-mixed and DIY mix investment options.

He has over 25 years experience in managed funds industry, in roles focused on investment education, client relationship management, and portfolio implementation.

He is also a CFA charterholder, and has a Master of Applied Finance from Melbourne University. Welcome, Sam. Thank you. Kris is a financial planner and supports members through all stages of retirement planning.

From pre-retirement strategy and income planning, to understanding how superannuation fits into life after work.

He is known for translating complex financial concepts into clear, straightforward advice that empowers clients to make confident decisions. He holds a Bachelor of Commerce in Financial Planning from Deakin University. Welcome, Kris. Hi, Peter.

AustralianSuper has engaged industry Fund Services Limited to facilitate the provision of financial advice to members of AustralianSuper. Advice is provided by financial advisors who are authorised representatives of IFS, such as Kris.

And just a reminder that the information we are covering is of a general nature only.

Welcome, Sam. Kris, thank you for joining us today. What's the highlight of your day when working with members? I think what I really enjoy is when a member or somebody I've helped comes back years later, and they've actually been able to achieve some of their goals because of the guidance I was able to provide to them.

Kris? Yeah, I think it's working with people from all walks of life. We're really fortunate that we get great variety in our role in meeting all different types of members and supporting them.

Now, Kris, first question we've got here is quite a common one for members. I'm confused about the amount I need to retire. What are the assumptions that ASFA use in their calculations?

Oh, that's a great question. So I think ASFA, first and foremost, is trying to educate members on how much they need based on their relationship status.

First of all, when you go to the ASFA website and look at the numbers, the first thing they do is categorise singles and couples separately. So the first assumption they make is that single households need less than couple households.

The second thing they then do is they look at whether you are a homeowner or a non-homeowner.

So they use an assumption that says if you own your own home, this is how much you require. If you don’t own your own home and you need to pay rent in conjunction with funding your retirement, you’ll need more.

So while your relationship status might be the same as someone else — for example, both being a couple — whether you own your home or not can materially influence how much you need to fund your retirement.

Essentially, they allow you to narrow things down by your relationship status (single or couple), and whether you’re a homeowner or a non-homeowner

Once you're in that category, they then define two types of retirement: what they determine to be a modest retirement and a comfortable retirement.

A modest retirement essentially looks at what you need to cover the basics — keeping the lights on, groceries in the fridge, some heating, and maybe an occasional domestic holiday.

But not everyone just wants to cover the basics. Many people want to do more in retirement.

That’s what ASFA calls a comfortable retirement. This includes things like overseas travel, private health insurance, gym memberships, and the ability to replace a car from time to time.

That’s the high-level view. From there, they provide more detailed assumptions you can explore — for example, how much is allocated to travel or upgrades — which all sit behind the final figures.

Once they arrive at a dollar amount — for example, a comfortable retirement figure for a couple — they then work backwards. They assume an investment return and factor in the Age Pension to estimate how much capital you’ll need to support that lifestyle over time.

They also assume that you’ll apply for the Age Pension when you’re eligible, and that your savings will support you through to life expectancy.

So ultimately, ASFA provides a set of benchmarks — a couple of lines in the sand — that people can aim for.

If your situation is a bit different, you might need more or less.

It’s really a starting point. One of the biggest questions members have is simply, “Where do I start?”

ASFA helps answer that by giving a guide, but your own budget, lifestyle choices and goals will shape what you actually need.

For example, you might want to travel overseas every year instead of every few years — that would increase the amount you need.

So while ASFA does some of the heavy lifting, your individual circumstances will determine your actual income needs, which then determines the lump sum you’ll need to fund your retirement.

At a high level, it’s about linking how much you need each year to how much you need saved overall.

Next question is to you, Sam, about market volatility. With the current market volatility, is it appropriate to defer retirement until things settle down?

That’s definitely an interesting question.

One way to look at it is to try and separate your retirement decision from what’s happening in the markets.

Market volatility happens all the time. You’ll see daily movements, as well as broader cycles every few years.

So generally, it’s not ideal to delay retirement purely because of market conditions.

Instead, it’s a good opportunity to step back and look at your overall situation how much income you need, how much you have saved, and whether your plan is sustainable

That will give you a much clearer indication of whether you’re ready to retire.

Lastly, it's really about looking at your whole situation. One amazing thing about retirement is that you often have a pool of money that's bigger than you've ever had in your entire life. You also have the opportunity to continue growing that money in retirement, because markets have historically recovered and continue to compound, even as you're spending.

So thinking about that in retirement is important as well. Overall, it's about looking at your entire portfolio and building it in a way that helps you weather the ups and downs of market volatility. Markets will change every day, and whether you retire today or next week, it’s not going to change what the markets are doing.

Correct.

Next question is about income. So, to you Kris — when I retire, do I spend less? Is my income going to be lower because I’m now retired?

Yeah, I think that’s maybe a bit of a misconception. In working with members every day, it’s actually quite unusual for people to say, “I’m going to retire and spend less.”

We often see the opposite. People retire, have more time, and want to spend more money doing the things they enjoy — like travelling overseas — that they couldn’t do while working.

So it’s quite unusual for people to significantly reduce their lifestyle at retirement. I think it’s really about being honest with yourself and working through what your individual needs will be in retirement.

One of the key questions we ask members is: what do you want to do in retirement?

If travel, home renovations, or spending more time with your grandchildren is part of your plan, then it’s important to budget for that lifestyle so you have an accurate figure to base your retirement planning on.

Because the last thing you want is to run out of money and need to go back to work later in life.

Yeah, so I might be spending less on commuting to work, but more on travel to places I actually want to go.

Exactly — your spending might stay similar overall, or be a bit higher or lower, but the mix changes. You’ll be spending more on what you want to do, rather than what you need to do.

Kris, back to you. A very practical question here: if I’ve retired and I get paid out my long service leave, do I get super on it?

Yeah, so it depends on how you choose to receive your long service leave, which is something you’ll need to discuss with your employer.

Some employers will only offer a lump sum payment, while others are happy to pay it to you as an ongoing payment.

How you take it matters. Every person’s circumstances are different, so one option might be better than another, or even a combination of both.

If you take it as a regular payment, like a salary, then your employer will need to pay superannuation on that payment.

If you take it as a lump sum — for example, taking the full amount upfront — then generally, they’re not required to pay super on it.

Another thing to keep in mind is that if you take it as a lump sum, you don’t continue to accrue leave. But if you take it as an ongoing payment, you can continue to accrue leave while you’re on leave.

So it’s an important planning consideration as you approach retirement, especially if you have a significant amount of leave.

So we’ve talked about retirement planning with a financial planner, and maybe with Centrelink. Your employer is another key factor in that process and the decisions you make.

Absolutely.

Another great question — and probably one for both Kris and Sam. If I’ve got money to save, should I put it into super or pay off my mortgage?

That’s another excellent question.

We’ve been very fortunate over a long period to have relatively low interest rates in Australia, but those rates have been increasing. It’s now not uncommon to see rates around 5.5%, 6%, or higher.

A simple way to think about your interest rate is that it represents a “risk-free” return on your money. Every dollar you put towards your mortgage saves you interest — and for a primary home, that interest isn’t tax-deductible.

So effectively, you’re earning a return equal to your interest rate by paying it down.

If your mortgage rate is 6%, 7%, or higher, that can be quite difficult to consistently match through investment returns without taking on additional risk.

That can heavily influence where people direct their surplus cash flow.

However, the benefit of super isn’t just about returns. Contributing to super can also provide tax benefits, which should be considered as well.

So again, it comes back to individual circumstances. The size of your mortgage, your interest rate, whether there are repayment limits or penalties, whether you're on a fixed or variable rate, your marginal tax rate.

All of these factors will influence whether contributing to super or paying down your mortgage is the better option.

So it’s a great example of where getting advice can really help you make an informed decision.

And Sam, how does this fit in with investment cycles?

It’s definitely a balancing act.

On one hand, paying down your mortgage reduces your interest costs. On the other hand, investing — whether inside or outside super — gives you the opportunity to earn returns that could exceed both inflation and your mortgage rate over time.

Setting some money aside for investing can help grow your capital and improve your financial position in the longer term.

Another question for you, Kris — around spouse contributions. Does the money actually have to come from the spouse’s account?

No, it doesn’t matter which bank account the money comes from. What matters is how the contribution is classified.

At AustralianSuper, when you make a contribution, you need to nominate the type — for example, whether it’s a spouse contribution.

By default, contributions are treated as non-concessional unless specified otherwise.

So if you want it to be recognised as a spouse contribution, you need to ensure it’s processed with the correct classification and reference details.

It’s not about where the money comes from — it’s about how it’s recorded when it goes into the fund.

Exactly.

Next question for you, Kris — from a self-employed member. They can’t salary sacrifice, so what’s the best way for them to take advantage of super?

Being self-employed does limit access to salary sacrifice, but there are still options.

Broadly speaking, there are two main types of contributions, non-concessional (after-tax) contributions and concessional (before-tax) contributions.

Self-employed people can still make non-concessional contributions, which are after-tax and don’t provide an immediate tax deduction.

But importantly, they can also make personal deductible contributions. This allows them to contribute money to super and then claim a tax deduction — effectively achieving a similar outcome to salary sacrifice.

In practice, the contribution is made from after-tax income, and then a “Notice of Intent to Claim” form is submitted to the ATO to convert it into a deductible contribution.

So while the mechanism is different, the outcome can be quite similar.

So it’s not about being locked out — it's about using a different pathway.

Exactly.

Sam, next question — if I’m about to retire, does market volatility have a bigger impact because it’s right at the start of retirement?

It definitely can.

One key concept here is sequencing risk. This refers to what happens if markets are down at the same time you’re drawing income from your investments.

If you’re withdrawing money while your investments are down, you’re effectively selling assets at a lower value, which can impact your portfolio over time.

So one important strategy is diversification — making sure your entire portfolio isn’t exposed to market volatility in the same way.

That way, if markets fall, it doesn’t necessarily disrupt your income needs.

Kris, how does a financial planner help manage that?

One of the first things we talk about is time horizons.

Shares are a long-term investment. They can outperform inflation over time, but they can also be volatile in the short term.

So we help members identify their short-term and long-term needs.

For example, if you need $50,000 in the next few months for a renovation, that money probably shouldn’t be invested in shares.

It’s also about having flexibility in your income strategy. Many retirement income products allow you to adjust your income within certain limits.

So if markets are down, you may choose to temporarily reduce your withdrawals to avoid selling investments at a low point.

Another key idea is having multiple “buckets” of money — rather than relying on a single pool of assets.

That gives you more flexibility about where you draw income from, depending on market conditions.

A couple of different buckets of money to draw from. That's better than having a single bucket of assets of which you have to take from there, irrespective as to what's going on in the day. And in my experience meeting with members, many often think you only have one bucket, but that's not true. You can have multiple buckets.

To meet your needs. Yeah, and I think that's the… that's the sophistication to retirement planning, is through accumulation, we're not drawing, we're coming into the market all the time, we've got a single pool of assets, and we're just… we're leveraging… we're allowing capitalisation of that interest over time, and that works really, really, really well. But when it comes to retirement, we need to have a bit more of a think around.

How do we transition out now? Um, and, you know, is that single pool of assets appropriate? In some instances, it will be for members, but for other members, it may not be. So, get some advice and, you know, have a documented retirement strategy to take into account if, you know, volatility does occur, because it happens all the time.

Yeah, exactly. Very simple one here. When should I get advice?

Yeah, I think whenever there's been a significant life event that you want to talk to somebody about. So the big life events that we see members for is retirement is a big life event, wherein, you know, I've been working.

My employer or I've been contributing to my super, I've been accumulating these assets and putting away money for my retirement, and at some point I want to stop working. So, retirement, um, it's not the retirement event itself, it's your circumstances are going to significantly change. So it's at.

significant change in circumstance, I think, really lends well to getting advice. Um, other big life events, unfortunately, we deal with people where they've had a medical event. That's another big event where, you know, planning may be appropriate. Um, you know, pay increase is another great one. You know, I go from earning X to Y, and I've got surplus cash flow, and.

I want to have that conversation around, is it mortgage? Is it extra super? That type of stuff. So I think any time where your circumstances significantly change, or are likely to significantly change, presents a great opportunity to get some advice.

Same an investment question. I'm approaching retirement. Should I de-risk my portfolio because I'm closer to retirement and don't want to have that loss?

When you think of the timing of when you should change your investment strategy, it could be based on your circumstances or your age or how long you have to retirement, but the big aspect here is even as you're approaching retirement, it's not just a destination, it's something that happens over 10, 20, or 30 years.

So what we offer is a range of different investment options that can cater to different objectives that members have from a high growth option to build your portfolio over time to something more conservative like the conservative balance or stable investment options.

And those are just our diversified, pre-mixed options that provide that kind of built-in diversification that can help build your balance over the long term, or provide you some stability. We do have a variety of other options, like our DIY investment options that let you focus on listed shares, like Australian shares and international shares.

or fixed interest in cash. So, we have a whole platform of investments that you can choose from to think about those needs. Yeah, and I suppose it's understanding the objectives of all those options, because they've got different objectives in.

potential returns, but they've also different track records of when or how often a bad year is going to come. Definitely, so it's in those, it's worth looking at what they're invested in and mirroring that to the market conditions. So, just because an option has a bad year, it could be because of the market conditions.

It may be a better suit for you over the long term, even if it's… if the more recent performance isn't what you expect. So it's looking at what is it invested in, what are the market conditions, and what really fits my long-term objectives. Yeah, and Kris, you'd probably see this a lot, so it's a matter of members understanding.

what options are available, which suits them best, and their risk tolerance to… it's their decision at the end of the day. It is, and I think to Sam's point, risk equals return. So, if your objective is to maximize return.

Then the easiest way to maximize return is to take risk. If your objective is to have a stable pool of assets to retire from, then your objective is stability. It's not return. So, investment option A, maximize return, versus investment option B, maximize stability. They're two.

different investment options. I think what Sam's saying is we have both options available to you. So, what is your investment objective? Is it to maximise return?

Or maximize the stability of your portfolio. But more important to that, making that decision in context of your retirement. If you're 50 years old, and you're not going to retire for 17 years.

Why do you need stability? If you're 95 years of age and you have $4 million in super, why are you trying to maximise return? So I think it's putting a lens over what the investment option does.

Relative to what are the objectives you're trying to achieve. So, if I'm halfway between A and B, I can actually have 50% of A and 50% of B in my portfolio. Absolutely, or you could take a DIY option, which is what Sam's taking, and you can go Aussie shares or international shares and make all sorts of decisions, but just make those decisions in context with.

Not what's happening today, but what am I trying to achieve over the short, medium, and long term? I think that's more important. And getting advice around it, because my brother did that, doesn't mean I should be doing it as well. Absolutely not. You've got your own set of individual circumstances, so what's right for you is right for you and you alone.

And to your point, Richette, and get a second opinion, get some advice. Thanks, Sam. Thanks, Kris. And thanks to you for asking the questions that generated the conversation we have just had.

As we continue to move into upcoming sessions, just a reminder that you can continue to ask questions at any time using the Q&A box on your screen. Our team will address as many questions as they can during each segment, and you'll also have the resources tab for more information.

Thank you again, Sam and Kris. We'll see you a little bit later on in the event for a further Q&A session.

So far today, we've been talking about saving and growing your super. Now we are moving into the maybe more exciting topic of spending in retirement.

Research shows that for many Australians, the idea of spending super can bring up some uncertainty or even anxiety.

I remember I spoke with recently had anxiety about running out of money in retirement. And the only way in their mind that they could ease that anxiety was to spend less.

After years of saving, it can feel like a big mindset shift.

This next section of the event is designed to give you the information, reassurance and confidence you need to feel comfortable spending your money.

So you can enjoy the retirement you've worked so hard for.

This time, we've got 3 sessions running at the same time. And you can choose the one that is most relevant to your circumstances. And remember, if you are interested in more than one session, you will have access to all the sessions after the event.

The first session, How to Pay Yourself in Retirement, is designed for members who aren't sure where their income in retirement will come from.

or how it all fits together. Education Manager Yen Du will help you understand how retirement income works.

how people commonly structure it, and how to create an approach that feels comfortable and sustainable for you.

The second session, Easing Into Retirement, Understanding Transition to Retirement, or TTR.

This session is designed for those who may want to be dipping their toes into retirement, or easing out of the workforce slowly.

Education Manager Warwick Clout will explore the eligibility criteria.

What is a TTR strategy? The benefits of having a TTR strategy, and how a transition to retirement income account works.

The third session, What to Consider as a Self-Funded retiree, is for those who expect to fund their retirement without the help of the Government Age Pension.

Join Education Manager Andrew Hambling and Financial Planner Mark Vincent, when they will look at how to make your money last longer in retirement.

Investment considerations, and ways to manage risk as you draw an income.

And they'll also look at keycaps, limits, and other rules that are important to understand.

To choose the session you'd like to attend, please close this window to return to the event lobby, and I'll see you back here later.

Welcome, everyone, and thanks for joining us today. During your working years, income is pretty straightforward. You get paid regularly. Perhaps that's every 2 weeks, and then you plan your spending around that. Now, when you retire, instead of just one paycheck.

Income often come from different places. Now, because of this change, it often leads to a very common question, which is, how do I pay myself now that I'm in retirement? So this session is all about helping you understand how retirement income works, how people usually structure it.

To help you create an approach that works for you. Now, please keep in mind this session is general information only, so it's not personal financial advice. So before making a decision, please consider your own circumstances. If you have any questions along the way, please feel free to type it into the Q&A box.

We have the education team in the background answering questions today.

Now, many people wonder, where will their income come from once they stop working? Because while we're working, usually our income, it comes regularly through our pay. But when you retire and you stop working, that pay also stops. So where will income come from then?

Now, for most people, income in retirement usually come from four main places, your superannuation savings that you have in the bank, investments outside of super, and possibly the government age pension. Now, these sources can provide you with money to live on in retirement.

Even though you're no longer earning a salary or a wage. Now, think of these as retirement income building blocks. So when you put them together, you can combine them in different ways to create the level of income that you want.

Now, as you move from working life to retirement, your income, it doesn't stop. But where it comes from, it does start to change. So as you approach retirement, new income options, they gradually unlock over time. So we're going to have a look at, um, walk through what happens.

Now, while you're working under the age of 60, for most people, income is fairly straightforward at this stage. You're earning a salary, a wage. You might also receive income from your personal savings or investments.

You can see their super is locked, so it's growing in the background, it's growing through contributions. Now, at this stage, super… it's been saved or built for later. It's not designed to provide you with income, not just yet.

Now, once you reach age 60, options start to… they start to open up. So while you're still working, if you're still working between age 60 and 64, you usually can't access your super straight away. However, you may be able to access some of it through a transition to retirement account.

Now, transition to retirement account, it's still super, but it's an account that lets you draw on income from it. People use a transition to retirement in different ways. Some use it to top up their pay if they reduce their work hours. Some use it to pay down debts before retirement, for example, a mortgage.

Many people these days use a transition to retirement to grow their super balance while potentially save on tax.

Now, if you currently retire between age 60 and 64, or if you stop working for any employer after you turn 60, you've met what's called a condition of release. Now, what this means is your super it unlocks. So you can access it directly if you choose to.

Now, you may also decide to start a retirement income account. This is where your super would pay your regular income, usually tax free, while the rest stays invested.

And then from age 65, the rules, it becomes simpler. You can see that it stays unlocked, your super choice income account.

This generally gives you more flexibility, so you're able to access your super while you're working semi-retired, or even be fully retired.

It doesn't matter. And then from age 67, some people may also become eligible for the government age pension, depending on their circumstances. We'll talk a bit more about age pension eligibility very shortly.

So when you retire, you do have a few different options when it comes to accessing your super. Now, 1st of all, you can leave your super where it is, keep it invested if you want to. There's no rules that say you must start using your super. But when you're ready, if you're able to withdraw it, you can withdraw lump sum as and when you need.

You can also transfer it into an account-based pension. This is where you pay yourself a regular income. Now, keep in mind, you're not just limited to one option. You can actually take your super in a number of different ways. So, just for example, you might take your super, some of it as a lump sum, and then the rest.

To provide you with an ongoing income. However, there will be different tax implications that you'll want to consider.

Now, for many retirees, people choose to pay themselves regularly. So by opening up what's called that account-based pension, let's talk about how it actually works. So the account-based pension, it allows you to keep your money invested, earn returns while you receive a regular payment.

Much like a salary. So those payments, they are generally tax-free if you're over the age of 60. You can keep the rest invested, as I mentioned, so that they continue to work for you.

In addition, any investment returns in your account, they are also tax-free. So this means more of the money that you earn, it stays yours, it stays in your account and remains invested.

So how does it work? To open an account-based pension with AustralianSuper, which we call our Choice Income Account, you would need to roll over at least $10,000. It can be from your AustralianSuper account or an account that you have with another super fund.

Now, once that account is set up, you can choose how often you're paid. So you can choose from fortnightly payments, monthly, quarterly, twice a year, or yearly. Those payments are deposited directly into your bank account. Now, you can withdraw as much as you like.

is no maximum limit. So this means you can increase your payments at any time. On top of that, you can take out additional lump sums if and when you need them.

The only requirement is that you meet the yearly minimum withdrawal amount, which we'll have a look at next.

Now, it's also useful to know if your situation changes, you can move your money back into super. So, for example, you might decide to return to work, and if you no longer need payments from your choice income account, you have the flexibility to transfer your funds back into your super account.

Another thing to be aware of is there is a limit on how much super you can move into a retirement income account like choice income. Now, this limit is set by the government. It's called the transfer balance cap. It mainly affects people with larger super balances.

So from 1 July 2025, the transfer, the general transfer balance cap is $2 million. Once you've used up the transfer balance cap, you generally can't add more money, um, more money later on, even if your balance goes down over time.

Now, the thing to be aware of is your personal transfer balance cap, it may be different, but it depends on when you first started your retirement income account and also how much of the cap that you've already used. So it is a good idea to check your own details, and you can view your personal transfer balance cap.

Uh, in the ATO section through your myGov account.

Now, this slide, it shows a minimum amount that you are required to withdraw each year once you start a retirement income account. So the percentage, it's based on your age as that 1 July each year. When you're under the age of 65, the minimum drawdown rate is 4% of your account balance.

And as you can see, it gradually increases as you get older. Now you have the flexibility in terms of how you meet this requirement. So you can draw a regular income more or less frequently. You can withdraw just a minimum and always take out more if you need to.

Now, if you do decide to open a choice income account, you may qualify for a tax saving known as a balance booster. If you meet the eligibility, we'll pass this tax saving on to you. Now, let me explain before retirement super isn't completely tax-free.

So AustralianSuper, we set money aside to pay for future capital gains tax. So when investment assets they are sold.

Now, when you move from a super or a transition to retirement account into choice income, it enters a tax-free environment. So assets sold in the retirement phase are not taxed. So that amount that was previously set aside.

That's no longer needed, so that amount is passed to you as a balance booster payment, which is credited to your choice income account.

Now, you may receive a balance booster if you move your existing AustralianSuper or transition to retirement account to Choice Income.

Also, you've held your super transition to retirement account for at least a full calendar month, and you've invested in one or more eligible investment options. Like I said, if you're eligible, you'll automatically receive the balance booster. There's no need to apply for it.

Now, to help us better understand income in retirement, let's have a look at a case study. So we have Julie, sorry, Judy. Judy is an example of an AustralianSuper member. She spent her career working, and now she's approaching retirement. Now, having reaching having reached this stage of retirement.

Judy now faces some important decisions about next steps and what benefits she can expect. So let's have a look at her current situation. Judy is 65, she's single, she's also a homeowner. And actually, she just recently finished paying off her home loan.

She's a teacher currently earning $90,000 a year. She has about $350,000 in super and some surplus savings around 40,000 in her bank account.

Now, after working out her retirement budget, Judy calculated that she would like to have an income of around $50,000 a year in retirement. So we're going to have a look at what duty options, what options are available when it comes to her super, and also what else she might be considering as she gets ready to move into retirement.

Now, after some planning, Judy, she decides to make one last contribution to her super before she retires.

Um, she chooses… there's many different ways to add more contributions to super.

For Judy's situation, she's decided to make a tax-deductible contribution. And the reason for this is because she has extra savings in her bank account, so she wants to make the most and also make the most out of her final year of work. Because by contributing, and for her situation.

She is contributing $19,000 to her super as a tax-deductible contribution.

This helps Judy achieve two things. boost her retirement savings before she retires, and also reduce the amount of tax that she pays.

Because Judy is working and earning a salary, so she can claim that contribution as a tax deduction. So this will lower her taxable income and means she'll pay less tax overall.

Now, as Judy moved closer to retirement, she does like the idea of having an income that feels familiar, so much like that regular pay she receives while working.

Now, to do this, Judy is going to open a choice income account and she does that online via the AustralianSuper website. Now, with this, she has the flexibility to choose how often she gets paid. She can adjust the payments if she needs if her needs changes. She can take out lump sums when she needs more money.

say for a holiday or for some home renovations.

Now remember, Judy, she needs to take out a minimum amount each year, but other than that, she has full control over her money.

Another key benefit is that Judy's balance, it remains invested. So it means her income, it can last longer in retirement. But then it's important to remember, though, investment returns, it can go up and also it can go down.

Now, because Julie is over age 60, the income payments she receives, they are generally tax-free, and also the investment earnings in her account, they are also tax-free.

So let's have a look at Judy's retirement outcome. So what does it all mean for Judy? Well, essentially, she's going to pay around $3,230 less in tax, thanks to that tax deductible contribution that she made into her super account.

She is also going to receive a balance booster payment of $2,600. Now, this was the average balance boost amount that was paid to… paid out to AustralianSuper members in the last financial year. So we… that's why we've used this figure in this example.

As I mentioned earlier, there are a number of different factors that affect how much balance booster someone might receive. But in this example, we just use the average.

Now, what this all means for Judy is that she's going to be able to meet her income needs of $50,000 a year up until the age of 84.

Now, what we're going to do is we're going to fast forward a couple of years. So Judy, she's been retired for 2 years now. So she retired at 65. She's now 67, which means she can apply for the age pension.

Currently, she has about $282,000 in her choice income account.

She's drawing a regular amount from that account to meet her income needs.

What she's going to do next is to go through the process of applying for the government age pension. So let's talk about the Age Pension eligibility.

Now, to get the age pension, you must have reached the Age Pension age, which is 67 or older.

I also need to meet residency requirements, so you must be an Australian resident and also be an Australia the day you apply. In most cases, you need to have been an Australian resident for at least 10 years. Now, there are some exceptions, so if your situation is different.

It is a good idea to check Services Australia's website for more information.

Now, in addition, you need to pass what's known as the income test and also the assets test. Now, these will decide whether you qualify for Age Pension and also how much you might receive. If you find that you don't qualify when you first apply, you can always check back in.

Because our income, our assets, it can change over time.

Now, let's have a look at how the Age Pension, how is it actually calculated? Because a really common question we hear from members is how much Age Pension will I get?

Now, at a very high level, as I mentioned, there are two tests. So there's our income test and there's also that access test. Now, Centrelink, they will look at both and whichever test gives the lower pension amount is the one they will use. The income test looks at money that's coming in. So employment income, if you're still working.

There's also assessed income from savings, investments and also super pensions. Now, this assessed income, it's often calculated using a set of rates. They're called or referred to as deeming rates.

Um, it's not based on what you actually withdraw.

The assets test, it looks at things that you own, so your savings, super, investments, property, property other than your own home. And because the family home that you that you own, it's treated differently. There's assets thresholds. They do vary depending whether you are a homeowner.

Or not. But the thing to keep in mind is you're not suddenly cut off if you go over those thresholds or limit because both tests, they work on a sliding scale. What this means is the age pension, it reduces gradually as income or assets increase.

Because many people worry that if they earn a bit more or use a little bit more of super, it means that they'll lose the Age Pension. But in reality, that's not how it works, because the system, it's designed to taper.

That's why concepts like theming, work bonus and other offsets that they exist to help people.

give people more flexibility, and also just avoid discouraging income or engagement in retirement. So we're going to have a look now through some commonly misunderstood parts of the Age Pension, like theming and working in retirement.

A question that often comes up from retirees is.

If I take more money from super, will it reduce my age or even if I put it together? Now, many people assume that every dollar they withdraw from super is going to be counted as extra income by Centrelink.

But that's not how it works. This is where deeming is often misunderstood. Now, for most people with an account-based pension, Centrelink, they're not actually interested in how much you're withdrawing, how much you're withdrawing from Super each year.

Instead, they look at the total value of your savings, your investments, how much you have in your super balance. And then they use these deeming rates that you see here to estimate how much income those assets are assumed to earn.

So if you're single, the first 64,200 of your financial assets, it's deemed to earn 1.25%. Anything more is deemed to earn 3.25%. If you are part of a couple and at least one of you receives a pension.

The first $106,200 of your financial assets is deemed to earn 1.25%. Anything more is deemed to earn 3.25%.

Now, because of deeming, taking extra money out of super, whether it's for a holiday or for some home repairs, it doesn't automatically reduce your Age Pension because it's not about how much you withdraw.

Because of this misunderstanding, sometimes people, it could lead people to spend less in retirement than they actually need to.

Now, another common question we often hear is, if I go back to work or decide to do some part-time work in retirement, will it affect my age pension?

That concern is completely understandable, but this is also where the work bonus is often misunderstood. Now, the work bonus, it's designed to help people over age pension age to keep working if they want to, without being penalised straight away. So, for example, in the future.

Judy might decide to do some casual or some contract teaching work. Now, under the work bonus, the first $300 of gross fortnightly income, it doesn't count towards the Age Pension income test.

So if you earn $300 all for fortnight, Centrelink is going to treat that as 0 income for pension purposes.

Another helpful feature is that any unused work bonus, it can build up over time, so you can bank up those unused amounts, and you can bank it up to the maximum of $11,800. So this stored balance, it can be used to offset higher earnings in other fortnights.

Which is really handy if the type of work you do, it's seasonal, or it varies from fortnight to fortnight.

So going back to that that worry, many people, retirees worry that any work will mean a drop in pension. But for many that's not the case. Thanks to the work bonus, doing some paid work doesn't automatically reduce your age pension. In fact, it can.

help increase your overall income while you stay active and also engaged in retirement.

Now, once people understand the work bonus, the next question that often comes up is.

Even if my Age Pension isn't going to be affected, won't I lose most of it to tax?

Now, this is where the seniors and pensioners Tax Offset or SAPTO comes in. Now, SAPTO is designed to help people reduce the amount of tax they need to pay. So once you reach Age Pension age.

How it applies, it does depend on your total income and also your personal situation. But for many people, if they… for many retirees, if they decide to do some small amount of part-time or casual work, that don't mean you could potentially pay less tax than expected.

Or in some cases, pay no tax at all on that extra income. So many people assume I'll lose if I work, I'll lose my age pension and get hit with tax. But the system that includes measures like that work bonus I talked about earlier, it helps with.

The pension side of things, and with SAPTO helps with the tax side. And together, this can make working in retirement more worthwhile.

Now, like I said, how this SAPTO applies to your situation, it does depend on your total income and your circumstances, but what we want to call out is that it is an important piece of the puzzle that many people aren't aware of. So when we put everything together, some retirees find.

working a little bit in retirement can generally improve their take-home position, not just before tax, but also after tax as well.

Now we're going to have a look at how Centrelink is going to assess Judy's situation. So on this table here, it shows what Judy, what she owns, and whether Centrelink is going to count it under the assets test income test, or whether they are exempt altogether. Now we're going to start with Judy's her home.

Now, because her home is her main place of residence, it's not counted by because many people worry that their home is going to affect their age pension, when in most cases it doesn't.

Now next, let's have a look at lifestyle assets. So her car and also household contents. Now, these are going to count under the assets test only, and they are going to be assessed at their market value, not the insured value.

Judy has that choice income account, which is her account-based pension. This is going to count under both the asset test and also the income test. Now, under the assets test Centrelink, it's going to look at the balance of that account.

Under the income test, Centrelink doesn't look at what duty is withdrawing, as we spoke about earlier. Instead, they're going to apply deeming, which assumes the amount her account earns based on those set rates.

And also with savings, Judy savings account, so money that she holds in the bank. It's assessed under both the assets and also income test as well. So again, under the income test, it's subject to deeming, not the actual interest that her savings account is generating.

Now, based on Judy's income and assets test, because they are under the current threshold, it works out that she is eligible for the government age pension. So from age 67, she will have 2 sources of income in retirement, so about $29,600.

from the Government Age Pension each year, and she's drawing around $20,300 from her choice income account, and together these sources will provide Judy with that $50,000 a year to meet her income needs throughout retirement. And this just goes to show sometimes super and age pension, they can work together, and Judy's story highlights that.

Often retirement income comes from more than one place. So if after today's session, he has raised some questions about your own situation, remember, we do have tools, guidance, and also advice options available to help you explore more about what retirement income might look like for you.

Now, that concludes our how to pay yourself in retirement session. We hope you found it helpful. You're now welcome to navigate back to the lobby when you're ready. Thanks again for joining us today.

Well, welcome, and thank you for joining our presentation today. We do hope you are enjoying today's event so far.

At AustralianSuper, we want our members to achieve their best possible outcome at retirement and today we'll be delving into one of the options that could help you do this, something known as a Transition to Retirement strategy.

My name is Warwick Clout, and I'm an Education Manager with AustralianSuper, and my job is to help you better understand how superannuation works.

Now, it's important to be aware that today's presentation just contains general financial advice, which does not take into account your own personal situation, so it is all just about understanding the concepts for you to consider. You may also wish to seek independent financial advice. If you would like to understand if a TTR strategy is suitable for you. Also, just be aware that our education team is in the background and they'll be available to answer any questions that you may have. So if you do have any questions, feel free to submit them using the Q&A box.

So we are aware that everyone's journey to retirement is going to be different, and today we are going to explain how you can transition to retirement your way.

So, by understanding how a transition to retirement strategy works, you could potentially uncover ways to create greater financial flexibility, whilst also taking advantage of potential tax benefits depending on what you may choose to do.

So, a TTR strategy does allow you to ease to access income an easier way into retirement. So if you are aged between 60 and 64, and you are still working, a TTR income account may allow you to potentially reduce your hours at work.

possibly give you a taste of what life after work could look like.

could also allow you to ease your way into a retirement lifestyle, to maybe take up a new hobby, or give you the freedom to enjoy some of that well-deserved me time.

Our TTR strategy may allow you to ease financial pressures as you transition into retirement to maybe give you that peace of mind as you sort your finances and your expenses in the lead up to retirement.

And then finally, you'll see there could potentially allow you to grow your super savings through any personal contributions that you make into your superannuation account.

But eligibility will be dependent, say, on your age. So as I mentioned, eligibility to start a TTR income account, you must have reached your preservation age to access super and that is age 60. And then you'll need to be anywhere between age 60 and 64.

and still be working. And there are a few different ways that a TTR strategy can be used, but today I am going to focus on just two ways, either to save more or to potentially work less.

Uh, to use your… the strategy to save more, uh, potentially grow your super savings through any personal contributions to your superannuation account, this could potentially help accelerate your super savings and potentially allow you to pay less tax.

Or if you do decide to use the strategy to work less, possibly reduce your working hours or your hours of work, allow you to maybe get that taste of what life after work could potentially look like.

Look at how a TTR strategy works. So, as it stands, you've got your superannuation account, and contributions are being made into your chosen superannuation account with your income being paid into your bank account, and how a TTR strategy works is that you'll need to set up.

a new TTR income account, which is a separate account to your superannuation account.

You'll then need to make a once-off transfer of at least $10,000 from your super account into that newly created TTR income account. And if you are looking to utilise a strategy to work less, maybe less days of the week or maybe hours of the day.

to make up for any reduction in that take-home pay, what you will do, you'll draw out an income from your TTR account with any money that you do receive, because you are now over age 60. Any of that money you are receiving will be tax-free income to you.

If, however, you are looking to use a strategy to potentially save more in your super, you look to potentially add some additional contributions into your superannuation account, for instance, via the way of salary sacrifice.

Those additional salary sacrifice contributions will then result in a reduction in your taxable income, but also in your take-home pay.

So to make up for any reduction in your take-home pay from making those additional before tax contributions, you will again draw about that income from your TTR income account, and again, any of that income being tax-free to you because you are over age 60.

And if we look just to take a bit of a closer look at how the save more option of a transition to retirement strategy works now.

Just to give a clear idea of where the tax benefits may lie in this type of strategy, we're going to look at a case study here of Charlie. You can see that Charlie has just turned 60, and he is keen to add to his current $175,000.

superannuation balance. Charlie is currently earning $90,000 per year and he's wanting to retire in five years time at age 65.

Charlie not currently being in a position to make any additional contributions out of his take-home pay. Charlie is currently spending everything that he's earning.

If you look at Charlie's current situation without a TTR strategy in place now, you see that his gross salary is $90,000.

From that $90,000, his employer is making their mandated compulsory superannuation contributions under what we call the superannuation guarantee, which is currently 12% of Charlie's income. So 12% of that $90,000 income being that.

$10,800. But from Charlie's taxable income of $90,000, you'll see that his income tax, or he's paying income tax at just over $19,500, leaving Charlie a net income in that year of $70,412.

on those employer superannuation contributions, Charlie will pay the 15% government contributions tax on those contributions, so that's the $1,622, uh, $1,620.

Apologies on that 10,800, leaving Charlie a net super increase in that year of $9,180.

And that's without a TTR strategy in place. If we look at Charlie's situation now with a TTR strategy in place, Charlie commences a TTR strategy by rolling an amount of $169,000 from his superannuation account into that new TTR income account.

Again, he's got his employer contributions of $10,800 going in, but in this example, Charlie starts making salary sacrifice contributions of $19,200.

Which then brings his before-tax, or what we call concessional contributions, up to amount of $30,000, which is the before tax or the concessional cap for this current financial year.

And that includes any employer contributions going in, any salary sacrifice contributions that Charlie may be making, as well as any tax-deductible contributions, any tax-deductible contributions.

bring it up to that $30,000, which is the concessional cap for this current financial year, keeping in mind that as at 1 July of this year, that concessional cap will be going up from $30,000 up to $32,500. So that might be something that Charlie might be considerate of.

Uh, when making these salary sacrifice contributions. But you will see as a result of making those additional salary sacrifice contributions that has had the effect of reducing Charlie's taxable income.

So his taxable income has now gone from $90,000 down to $70,800.

And because of that reduced taxable income of now $70,000, Charlie is now paying less income tax, so his level of income tax has gone down from just over that $19,500 down to $13,444.

As we spoke about, though, Charlie is wanting to maintain that same level of net income of $70,412, so in order to maintain that same level of take-home pay net income.

Charlie will need to draw out an amount of $13,056 from his TTR income account. Again, those monies being tax-free to him, uh, from his TTR account because he is over age 60. So he is able to maintain that same level of.

take-home pay, $70,412. Because Charlie's before-tax contributions have now gone up to that $30,000, again, he pays that 15% government contributions tax, or 15% on that entire $30,000 before tax contribution amount.

So that's the $4,500, which is 15% of that $30,000. But you'll see, though.

as a result of making those additional before-tax contributions.

Even though he's taxed on contributions has gone up to $4,500. Charlie's net super increase in that year has gone up to $12,444. So overall, Charlie's paying $3,264 less in tax.

And that means that he has been able to enjoy that increase in his superannuation balance.

Look at Charlie's situation as a result of implementing that TTR strategy, Charlie has been able to maintain the same level of take-home pay that he would have had without a TTR strategy in place.

He's been able to increase his superannuation balance by around $16,000 over that period of 5 years between age 60 and 65.

Charlie has been able to save over $3,200 in tax in that first year alone through that salary sacrifice arrangement, keeping in mind it has cost him an additional $200 in fees and charges, because that TTR account.

is an additional account that Charlie has open in his name.

As we just touched on, a TTR strategy not just being for those wanting to save more super can also be used to supplement income. So you may decide to possibly reduce your hours of work and work less in the lead up to your retirement.

And working fewer hours as you get older may be a good way to ease your way into retirement. Could mean that you're able to stay in the workforce longer than you maybe otherwise would have been able to. Potentially allows you to work less days or hours of the week.

allows you to receive payments from your TTR income account, so you can top up any reduction in your take-home pay.

So that even if you, you know, need to top up your income, you could even match the same take-home pay, uh, should you need that same level of take-home pay. And good news is that your super can continue to grow, because you are still receiving those additional contributions because you are still working.

Take a look at Bella's situation, she's potentially looking to work less in the lead-up to retirement. Bella's currently aged 60, earning $67,335 per year.

Bella's current take-home pay is $55,000. She currently has a super balance of $150,000, and she would like to again retire in five years' time at age 65.

So Bella's decided she'd like to start transitioning to retirement by reducing her working week back down to four days per week. However, she would still like to receive the same level of income to meet her living expenses.

So what Bella will do, she'll start by transferring an amount of $120,000 from her existing superannuation or accumulation account into her TTR income account.

Charlie, Bella apologies starts then reducing her working days back down from five days back down to four days a week, deciding she'd like to take now Fridays off work to spend a bit more time with her family, particularly her new granddaughter.

As a result of her reduction in her working week back down to four days a week, uh, she… her take-home pay, or her net income, is now reduced back down to $45,843.

In order to make up that shortfall in her take-home pay, Bella will then be needing to withdraw an amount, or draw down an amount of $9,157 from her TTR income account, so that she's able to maintain that same level of take-home pay.

Being that $55,000. So, this does allow her to potentially continue to cover her living expenses whilst transitioning towards that full retirement. She's been able to enjoy a bit more free time with her, uh, with her family.

and her granddaughter, and whilst this does mean that Bella is accessing some of her super earlier than she planned to, it does allow her to… the flexibility to reduce her hours of work and maybe allow her to keep working for longer than she may have, would have been able to do so.

Had she continued working full-time.

In order to open a TTR income account, you will have to have reached your preservation age for super being age 60. You'll need to move at least $10,000 from your existing superannuation account to that TTR income account.

Just be aware, though, each financial year you will need to take out of at least a minimum of 4% per year of your TTR income balance, and a maximum of 10% of your TTR income balance in any one given year. So it doesn't give you full access.

Just gives you partial access whilst you are still working, and you are anyway between age 60 and 64.

You might be thinking, why choose a TTR income account? So, firstly, gives you a bit more flexibility. You can set up your account to suit your needs, so it allows you to change your payment amount.

allows you to also change your payment frequency, so you can draw down your… from your TTR account, fortnightly, monthly, quarterly, six-monthly, or even annually in retirement.

or in a transition to retirement, I should say. Your investment options can be changed as well, and you can change your TTR account or stop your TTR account and move that money back to your accumulation or your super account, if your situation and circumstances change.

But just be importantly, be aware of those minimum and maximum withdrawal amounts to be aware of, and they are based on your TTR balance. So when you are under age 65, the minimum you must withdraw out of your TTR account is going to be 4% of your TTR balance.

In that financial year, with a maximum, a yearly amount you're able to take out being 10% per financial year from your balance.

Investment returns, so the money in your TTR account will continue to remain invested in that TTR account.

Uh, you aren't able to enjoy all of the current investment options that you enjoy under your accumulation account or your super account, apart from the member direct investment option, which is not available under a TTR income account.

Be aware of any administration fees, keeping in mind that a TTR is a separate account, so administration fees will also apply, but you are able to enjoy tax savings because you are over age 60. Any funds that you are drawn out of that TTR account.

are going to be tax-free because you are over age 60.

And then when you do retire, or if you stop working for an employer and you notify the fund, we will automatically switch your TTR income account to what we call a choice income account, which is AustralianSuper's version of an account-based pension product.

This will automatically happen when you turn age 65.

with a choice income account, your investment returns are going to be tax-free, and there will also be no maximum income payment, uh, in a Choice Income Account, as opposed to that maximum of 10% per year under that TTR strategy.

However, just be aware that your account balance will then count towards your transfer balance cap, which is a lifetime limit on the amount of super you can transfer into any tax-free retirement income account.

Now, that does bring an end to this transition to retirement strategy presentation. We do hope you got some value out of today's presentation. I would now ask, now this presentation has concluded, that you do make your way back to the lobby to continue on with the rest of today's session.

Thanks very much.

Hello, everyone. We're glad you've been able to join the event so far today. We're now going to explore the topic of self-funded retirement, what to consider. My name is Andrew Hambling. I'm an Education Manager at AustralianSuper.

And also in the background today, the education team are available via the Q&A button to answer any questions you have, and they will answer as many questions as they are able to. We also have a number of different resources for you to view across today's event. It's important to remember that this content may contain general advice, and we haven't taken into account your own personal needs, objectives, or personal circumstances.

I'm also joined today by Mark Vincent, who is a financial planner, and he has a license through IFS or Industry Fund Services, to facilitate the provision of personal advice to members. Hello, Mark, welcome.

Hello, Andrew. Thank you for having me along today. Thank you.

For many people who are self-funded in retirement, thinking about how long their money will last is very normal, and it's very human.

Australia generally has four building blocks of retirement income. Your income in retirement can come from a mix of these different sources.

For some people in retirement, income from the government aged pension may not be available.

When you're not expecting to rely on the government age pension, your super and your savings naturally take the centre stage. They're there to support your lifestyle, so it's understandable that people want to be thoughtful about how they use them.

Decisions can feel more deliberate, and it's common to pause and reflect before spending or making changes, especially when markets move around.

This is something we hear very often from members. In retirement sessions, many people tell us they want reassurance that their money will last and they're making sensible choices. This is sometimes called longevity risk.

Simply the idea of making sure that your savings support you for as long as you need them.

For self-funded retirees, these thoughts often show up in everyday practical moments. Can we comfortably afford that trip this year? How long should I think about spending when markets are or have been a little bit bumpy?

What's a sensible balance between enjoying today and planning for the future? What's important and reassuring?

is often, uh, the questions we hear from people who, on paper, are often in a strong position. It's not a sign that something's wrong, it's a sign that people care about making informed, confident decisions.

A big part of today's session is about helping turn that uncertainty into clarity, so you can enjoy retirement with confidence, knowing that you've thought things through and have a plan that feels right for you.

When we talk about longevity risk, there are really two parts to it. Making sure you're savings support you long-term and feeling comfortable enough to actually use your savings to enjoy retirement along the way.

How do you see this longevity risk and considerations playing out, Mark, when you talk to members?

It's interesting, Andrew. I had a member the other day have the funny analogy that they didn't want to be the richest person in the cemetery, because obviously they were fearful of spending too much and overspending, as we know, and running out of money before they run out.

So, it's all about balancing what they spend and how long it's going to last. And it's hard because we've been programmed to save all our lives, uh, saving to top up superannuation, saving for school fees, it's always saving, saving.

And then in retirement, that actually goes the other way, and we should and could be spending our money. So, getting that happy medium right, Andrew, can be hard sometimes, but with some planning and some modelling, we can give members that confidence that they are able to spend and they are able to travel, and they are able to do the things that's important to them in retirement.

Thank you, Mark. Now, we have had some market up and downs over the last six months, and when markets are volatile, what does self-funded retirees usually worry about, especially when they see their balances move around?

So, obviously, steps 4 and 5 are the most stressful times for most people, but especially self-funded retirees. While we're working, our employers are generally contributing into our super. We might also be contributing into our super, and we have income from wages to cover our day-to-day expenses.

So we're not reliant on our superannuation to provide that income. So, while markets can be bumpy, it's less noticeable, Andrew. However, when we're in retirement phase, no longer generating income from personal exertion, but drawing down on our superannuation to cover our living costs.

These market downturns can seem a lot worse, a lot deeper, and a lot more uncertain for our members, Andrew. But what they have to keep in mind, it is a cycle. We've seen things like this in the past, and we will get through the trough.

And if we can navigate that and hold our nerve, the upswing is generally the strongest point of the market, where returns can be quite quick and quite plentiful. Um, and then we go up and through the cycle again.

Holding our nerve, Andrew, is generally the best plan of attack through these market cycles.

Thank you, Mark. Now, generally there's two parts to that. There's the part understanding the market cycles, but also how members feel. Do you want to talk about how you navigate this with members, about their level of comfort?

Yeah, you could almost call it the head and the heart, Andrew. The head knows that certain things will play out. The head knows that markets will recover based on history. The heart doesn't like seeing markets go down. The heart worries about how this is going to play out, so… emotional comfort can sometimes take over, but it's all about getting that happy medium between higher-risk investments with higher potential return, but higher potential losses, and lower risk investments, Andrew, that might be more stable, but you have to expect a more moderate return over the long term. And this is very individual. This is very personal.

People have had existing experiences, good or bad, with investments, and that can shape and frame how they feel. Essentially, can you sleep at night when the market is volatile? Yes, you're probably in a reasonable investment mix.

If it's causing you angst and stress, it might be time to review this, Andrew.

Thank you, Mark. Now, one question we often get from members is what happens if I retire and sort of on the day I retire or in the first couple of years of my retirement, uh, if we have market falls during that time, does that mean that personally my money is more likely to run out? Can you explain.

What members are considering there? Yeah, listen, Andrew, that timing is obviously far from ideal. When we retire, we'd love to see some stellar returns up in the eight, nine, 10%, which would be wonderful. But the market can be cruel and timing can be unkind.

We have to remember that even in retirement, we still have a long-term investment timeframe, ideally, somewhere between 20 and 30 years could be the average lifespan of a member's superannuation, depending on what age they retire. So, while not ideal at the front end of retirement, we have to take the history as the guide for the future, and we will see corrections in markets and things may pick up. Now, to mitigate this in the short term, members may have a bit more money at the bank, especially if they've got short-term expenses.

We're going on a holiday next year. We want to buy a car in two years time. Having a bit more money at the bank to make sure that these short-term goals are funded rather than having to take extra money out of their super while it's already doing it a bit tough with downturns in markets.

can be a sensible strategy. Again, having the right investment mix that does have some more conservative investment assets like cash, fixed interest and government bonds as part of your portfolio, that can help mitigate this risk to a degree as well, Andrew.

Thank you, Mark. Now, I'd like to look at some common super terms and some important rules that self-funded retirees do need to be across, especially when it comes to superannuation accounts. Now, there's a couple of different terms here. We've got transfer balance cap.

total super balance cap, minimum income payments, and something called the Division 296 tax, which is coming in from the 1st of July. So, Mark, can you take us through these different terms and explain what they mean for members?

Of course, yeah, so these are all terms that the Australian Tax Office has brought into place to explain rules, limits and legislation, Andrew, and some will apply to some people, others they won't have any worry about this.

Some will be caught under many of these different rules or limits, and they need to be aware of which ones relate to them and how they can potentially impact them now and moving forward into the future, Andrew. So one is the transfer balance cap.

We know that once we're retired and over 60 years of age, if eligible, can move money from an accumulating super account into a retirement income account. Now, there are tax benefits with these accounts, so the government does limit how much members can have in this tax-free account.

It's going up to $2.1 million on the 1st of July next year, Andrew. So that's the maximum amount of money an individual can hold in a superannuation retirement income account.

Total superannuation balance, that looks at all of the members' superannuation accounts, whether there's one that's still accumulating, whether there's one that's in retirement phase, if members have a lifetime defined benefit government.

Super plan as well. They are all captured in that. Now, where this comes into play is it can affect eligibility to make voluntary contributions, Andrew. So, the number is the same, $2.1 million dollars.

So the government is saying once members get up and around near that amount, they do limit the ability to make contributions. So some may be eligible and some may no longer be eligible once you've hit this number, Andrew. Thank you, Mark. And both of those terms do sound rather similar. So members can get confused why there is more than one term. So thank you for walking us through that, Mark.

Another thing that members commonly ask us about, especially at retirement seminars, is around these minimum income payment amounts that can come from retirement income streams. Can you explain those, Mark? Of course.

So when money is in an accumulation account, even if you're retired, there is no obligation to take a payment. You can let the money sit there for as long as you like. Moving it into a retirement income account and getting all those additional taxation benefits, it does come with a condition, Andrew, and that condition is each financial year.

Based on your age, and based on your balance, you're required to draw a minimum payment. So, let's say a member was aged 70.

Their minimum drawdown is 5%. If, on the 1st of July, they had a million dollars in this retirement income account, they would be required to draw down $50,000 for the financial year, whether that's a fortnightly payment, a monthly payment, take it as a once-off annual payment.

They have to take that minimum. It does slowly increase as members age, because the government wants you to spend your money in retirement. They don't want you to be fearful of spending and squirrel this money away for a rainy day that might never come.

or to pass down to future generations. So, you do need to take this money out. But, Andrew, you don't have to spend it. Just because it's paid out to you, and now in your bank account, you're entitled to save that. Um, ideally, the government wants you to spend it. If you're under 75 years of age, and depending on your individual situation and circumstances.

You may be able to contribute it back into an accumulation super fund. So, it really depends on the individual and the circumstances, but ideally, this is income to fund retirement, Andrew. Thank you, Mark. Thank you for explaining that. Now, it is important.

For everyone joining us today to be aware that the numbers do change, and it's no different this upcoming financial year or upcoming new financial year, which starts on the 1st of July 2026.

We can see that the contribution limits, or the contribution caps, are increasing. So, for concessional contributions, it's going to be $32,500. Non-concessional caps increasing to $130,000. As Mark told us, those balance-based rules are increasing, so the transfer balance cap.

Uh, and I believe, Mark, for the transfer balance cap, it's only for people who haven't already opened one of those accounts, uh, for the full cap there of 2.1 million, is that correct? Yeah, this is correct, Andrew, and this is where it does get very complicated and very convoluted.

You get the ability to use your transfer balance cap and it was $1.6 million quite a few years ago, but has slowly indexed up. So depending on how much of your transfer balance cap you may have already used.

Um, the $2.1 million may be out of reach for some people. So, caveat, that is for a new pension commenced from 1st of July 2026, Andrew. Thank you, thank you. Uh, we can see that the total super balance is also increasing to $2.1 million, as Mark.

mentioned that does affect how much people may be able to contribute to their superannuation accounts, the closer they get to that number for non-constitutional contributions, if they're looking at the bring forward rule, or potentially any catch-up concessional contributions if they were eligible.

Now, what's new, uh, coming from the 1st of July 2026 is the Division 296 tax. Now, this is an additional tax to be applied on the realised investment earnings. We're a member's total superannuation value exceeds the $3 million threshold.

Now, you see that there are some further requirements around this new tax, and how it will be applied, and it is important to note, Mark, if individuals are wondering about their personal tax situation when it comes to super in these concessional.

caps and limits, where do they go to find out this information? Where's the first place they should be looking to find out where their limits are?

So, thankfully, all of the superannuation funds report contributions, balances through to the Australian Tax Office each year, Andrew. So that data and information flows through to the ATO portal.

which members can access through MyGov. So myGov. Link in ATO, and then all this information is fairly easily obtainable, Andrew, through little click-drop options. You can see concessional contributions, non-concessional contributions, total superannuation balance, all of the information that we've talked about here today, pretty much.

Um, myGov, ATO, it's a one-stop shop and reasonably user-friendly too.

Thank you. Now, I'm sure a number of members that have joined us today are wondering around this Division 296 tax, if it is going to be relevant for them, how that's going to impact them. So we do actually have a case study today around.

how it works. So, uh, we're going to look at a member today named Jill. Uh, Mark, would you like to take us through how the tax would play out for Jill on an example today? Of course, Andrew. So, there was a lot of speculation in the media about this proposed tax, um, and it went back and forth for quite a while.

And there was a lot of fear that it was going to cause a lot of issues for a lot of people, so they've revised it, and it's possibly not going to be quite as bad as a lot of people first thought, thankfully. So, all they care about in Division 296.

is balance in excess of the $3 million or in excess of the $10 million, but we'll just focus on the $3 million today, Andrew. So, Jill.

Had her Superfund report that at 30th of June, she had a total super balance of $3.1 million. So, the threshold is $3 million. She's exceeded that by $100,000. $100,000.

is 3.2% of her total super balance. So, 3.2% of her super is under the microscope for additional earnings tax. Now, they only care about the realised.

capital gains, or realized investment earnings. So, that's a big change, and that's going to help a lot of people. So Jill earned.

$250,000. For this account, for the year, which would have been about 8%.

The assumption is of that, about half of it was realised earnings. So about $125,000. So the $125,000 is the portion that was realized.

Only 3.2% of that the government cares about because that relates to the amount she's exceeding her threshold.

So there's $4,000. of earnings that are attributable to the amount that she has over her three million dollars. 15% tax is the normal tax up to her three million dollars and then another 15% is levied over and above.

So, 15% of Division 296 tax, an extra $600 on her $100,000 over and above Andrew. So not too bad in the scheme of things.

Thank you, Mark, and it's really important for the members that have joined us today where this might be applicable to them, to really understand how this will now work under the rules that have been legislated, as opposed to some of the things, as you mentioned, that were initially discussed, which might have been quite different from where the legislation did end up. So thank you for taking it.

through that. Now, another thing, uh, Mark, that people need to consider if they are self-funded, and they might potentially not be eligible to receive the government aged pension or the associated pension card, is there are some concessions that they might be.

are eligible for, such as the Commonwealth Seniors Healthcare Card. So, how do you look at this for members when you're talking about concessions and healthcare cards?

Yeah, a lot of people are quite surprised that they may be eligible, Andrew. The key to the Commonwealth Seniors Healthcare Card is eligibility starts at 67, which is age pension eligibility. It's not asset tested, which is a huge benefit for a lot of members.

The other benefit is it doesn't look at actual income. It looks at assessable income, adjusted taxable income. So, what that means for income accounts that have been started semi-recently.

If members do have one that is quite old, pre-2015, they may be treated differently, but let's assume these are all new income accounts being started recently, Andrew. For a single person, so over $100,000 of adjusted taxable income.

That would then prohibit you from receiving the Commonwealth Seniors Healthcare Card. So, Centrelink Services Australia use something called the deeming method to work out what kind of income your income account.

from super is paying you, not the actual income. There's a couple of rates they use, but very, very loosely, if a single person had, let's say, $2 million.

in an income account, retirement income account, the asset is not tested, Andrew, but the income is deemed they would be deemed to earn a bit over 60 something thousand dollars at assessable income. They could be drawing actual income of $150,000.

which is over the 101,105 cutoff limit but because it's deemed they're actually eligible Andrew. So a lot of people may think oh we're drawing more than that we're not eligible, which is not actually the case. So important that they, yeah, get some education and advice on this potentially.

Thank you, Mark. So yeah, that really is the takeaway. Many people rule themselves out, don't necessarily rule yourself out for these concessions, such as the Commonwealth Seniors Healthcare Card, until you've actually tested whether or not you are potentially eligible or not.

Now, one topic we haven't covered as part of our self-funded retirees topic today is who inherits my super? So we do have a couple of estate planning presentations as part of today's event. It is a really important consideration, and that's why we have separated them.

as separate, uh, topics as part of today's event, so please tune into one of those topics as part of today's event to make sure you do consider what happens to the estate, and potentially leaving that legacy to the next generation as part of your.

retirement and also your personal estate. Now, AustralianSuper do aim to bribe members with the help, advice, and guidance they need when they need it. We have our calculators, we have a simple advice service available over our phone number. We also have a comprehensive advice service, where we have advisors around Australia.

Uh, to help members with this, uh, potentially more complex financial advice, such as, uh, Mark Vinson, who's joined us today. So, thank you very much for sharing your expertise with us, Mark. Thank you for having me, Henry.

to have you along, and this does bring us to the end of the self-funded retirement session, what to consider.

And you can now return to the lobby for the next presentation, so thank you for joining us. Thanks, everyone.

All right. Welcome back everyone. We hoped that you enjoyed your income focused breakout session. We're now very privileged to be joined by Sal Truscello, Program Manager from Services Australia, to talk to us about the Government Age Pension.

And the key things to know while you are planning for retirement. Welcome, Sal. Can you just let us know a little bit about yourself?

Sure, thanks, and um, yeah, thanks for having me. I’m Sal Truscello. I'm currently a program manager for a specialist team, but I've been around for about 20 odd years, and I've kind of have spent quite a significant time being an Age Pension Assessor, so I've got a bit of, um, you know, background knowledge on the Aged Pension, so… Um, hopefully I can, um, yeah, provide some valuable information for the group today.

Wonderful, thanks very much, Sal. And just a reminder that the views expressed by our guest speaker throughout the session are those of Sal, and based on Sal's experience and expertise, and are not of AustralianSuper. Just also a reminder, if you've got questions, you can type them into the Q&A box.

And that the information covered is general in nature only, and it hasn't taken into account your own specific purposes or needs. So Sal, for many of our members, the Government Age Pension can play a really important part in meeting their retirement income needs, whether that's now or perhaps later on.

Um, and whether that's a full or even a part pension. When I'm out and about, and I'm talking to members and running seminars, what we often hear from our members is, do I qualify for the Age Pension at all?

What actually determines whether I'm eligible? And there's also a sense that the rules can feel quite complicated. So, Sal, from your experience, what are the most common questions or misunderstandings members might have about Age Pension eligibility as they approach retirement?

Oh, thanks for the question. I think what I want to hear about is often people get, I suppose, retirement and age kind of confused a little bit. They think, well, if I'm still working and not retired, then I can't apply or I don't qualify. It's an age pension, so it's really linked to your age. And so I think the most important thing for people to understand is that.

If you meet that basic, um, you know, being an Australian resident, which it doesn't mean being a citizen, like just a permanent resident, and there's some rules around, you know, how long you've been a permanent resident in Australia, and your age, of course, then you've kind of met that kind of basic, um, you know, qualification criteria.

And the next step is around means testing, which we'll cover off, I'm sure, a little bit later on. And so, it's really around just what you have to support yourself and how that fits in to that means testing. So, I think the common misconception here is that, well, I'm still working, I'm not retired, I don't qualify or I shouldn't apply, and I would be saying, well.

Um, you take that aside, you may be eligible, even if you are working, and so, um, you know, we always just encourage people to test their eligibility.

Absolutely. And I do hear from members, they do get quite overwhelmed, um, when, you know, they hear, oh, there's going to be an income test, it's going to be an assets test, and, um, you know, it can feel quite overwhelming. Do you have any practical tips, uh, for our members when they are applying for the Age Pension?

Absolutely. Look, come to Services Australia and get some assistance if you need it. So, like, it is a little bit overwhelming. It's a significant step in someone's life. It's a significant change, often is linked to, you know, finishing up work and so there's a lot happening and there's a lot of questions in there.

Um, in the application. So, um, you know, you take it step by step and go through those questions. Um, I won't say the questions are overly complicated, but again, it's not something that people do all the time, and so it can obviously be overwhelming, but that's why we're here. So, um, you know, I always encourage people, you can book an appointment these days at your service, or Centrelink offices.

sit down with someone, and although, um, you know, they'll be there to support, complete a form if it is a form or if there's the online version, of course, which is where we would recommend you go, but we just say to people, do the best you can, fill in as much as you can. If there's gaps in there or questions, then you can take that.

Um, to Centrelink, and, you know, that's what we're here for. We'll support people with that. So, um, understand it can be overwhelming, but also be aware that there's help, and, um, you know.

People do it, and people get through it, and we'll help you.

And is the MyGov, is that the first place that they should probably start?

Yes, because the myGov portal then links you into the various government services. So that could be Australian Tax Office, Medicare and Services Australia, of course. And once you link to Services Australia, then you can link into making an application. And so then you can lodge your Age Pension application online.

Yeah, having a myGov account is important for a number of reasons across different agencies, but certainly from applying for an Age Pension or any Centrelink benefit, that's the first port of call as far as getting LinkedIn.

Okay, so, um, apart from the family home, our super is often the biggest asset for most people. What are the key things members should understand about how super is assessed when they are applying for the Age Pension?

Um, yeah, look, absolutely. Um, I suppose, you know, from that, from that perspective, we can simplify it from a point of… it's really just, you know, how much money is in there? So, the amount you have is what we're looking at. So, the cash-in value is effectively what we would regard as an asset, like a bank balance.

And from an income perspective, there's some special income rules that we apply, which I think, you know, we'll cover off in a bit. So, I think for most people, just to… The way to think about it is really just like a bank account, it's an investment. Um, there's a pool of money there, and we'll include that as far as, um, you know, when we're tallying things up. The one thing to remember is that if you're not of Age Pension age yet, um, of course you won't be applying for the Age Pension if that's the case, but if it's still in the accumulation phase.

Then, um, it's disregarded from an assessment point of view, and where this can really come into play is that if we have a member of a couple where one is of Age Pension age and one person isn't.

then the younger person that isn't of Age Pension age yet, that accumulation phase super remains disregarded from an assessment perspective. And so, um, there's some further discussions you can have around how you structure that, but that's kind of where we kind of count it and where we don't. But once you're of Age Pension age.

Whether you're drawing down on an account-based pension or some kind of income stream, or whether it's just still sitting in that accumulation phase, then we just look at the asset value or the account value, and that's what we include as far as the assessment's concerned. There's an income test that we apply. Did you want me to?

cover off on that now? Yeah, that would be great if you can explain that. Yeah, yeah, so as far as income's concerned, and then often we hear, because if you… if it's transitioned into a pension phase, so for super, where people are paying themselves a regular amount, um, often there's questions around, well, is the amount I'm paying myself.

considered income. Um, and it kind of feels that way, because it's, you know, coming in regularly, but the way I explain it is that if you've got money in the bank, for example, and you go to an ATM machine once a week, and you withdraw on your capital, we wouldn't be calling that withdrawal from your own account, on your own funds as income, you're simply paying yourself out of your pool of money.

Centrelink applies an income test to that balance under some rules which we call deeming. And deeming is effectively an assumption that you're going to get some form of return on your money wherever it's invested. Um, the reason deeming is there.

is because different investments will give you a different rate of return, and it would obviously be really complicated to try and single out, well, a 10 deposit's going to pay X amount, shares are going to give you these dividends, some may not. And so what the government does is just apply a flat rate across the board to all investments, including your superannuation.

Whether it's in the accumulation phase or in drawdown phase. And so we're already making an assumption that there's some income from an investment point of view, and that's what we regard as income. What you decide to pay yourself out of that pool of money is just you drawing on your capital, and therefore, it's not assessed as an income source. So you're free to withdraw as much money.

As you need, as you want. Um, it's really just, again, the balance of the fund that we'll be looking at, and then we'll be applying this special deemed rate of return as an income source, um, which I can expand on a bit later if those questions come up.

Okay, whilst we're talking about income, what about overseas pensions? Because I know that when my dad was retired, he was receiving a UK pension, so how are these overseas pensions treated? Are they treated as income as well?

But yeah, um, so they're really just, um, like any other income source. So, if you were working, for example, then, you know, that salary or wage, we would regard it as an income source. Overseas pensions, um, are considered the same way. And so, um, people are obligated to test their eligibility again. The government says, well, if you've got some entitlement.

to a pension from overseas, then you're obligated to apply for those benefits. And once they're paid, then we look at that in the currency they're paid in. So, if it's the UK, for example, we'll just do the conversion of pounds to, um, to Aussie dollars.

Um, and that'll obviously fluctuate, and I think they, um, do that, you know, every month they'll do a reassessment of the exchange rate, and they use, um, you know, just bank rates. I'm not sure which bank they go to for that, but they get those figures, and customers get, um, statements of what we're applying, um, so they can.

know what's being used, but yes, to answer your question, it's just like any other income source. If you're getting $100 a week from overseas, then we just count that as $100 worth of income for that week.

Okay, if we just go back to assets, uh, next to our super, I guess the family home, uh, is a large asset, uh, that members may hold once they're in retirement. How does downsizing later impact the Age Pension?

Yeah, look, I think from a downsizing perspective, it's two things, really, that kind of in-between period of when you've sold a home, and potentially you've got some money that's come in from that sale up to the point at which you then purchase your next home. And so, um, in the ideal world, we're selling and buying at the same time.

Um, but if you're downsizing for a lot of people, there'll be some money left over, because their next house isn't, um, going to cost as much as the one that, um, they've just sold. And so, the issue there, well, not really an issue, but the things to be aware of, is just that if there's some additional money that's left over.

then that… that… wherever that gets invested or deposited is what we're looking at. So, if there's a $300,000 difference, for example, and you've got an extra $300,000 in the bank, or in your super fund, then that's what we're looking at. So that'll… when you, um, we redo the tally, and then we readjust the pension.

And so it's ever-evolving from Fornight to Fornight, depending on people's circumstances, and so the things to be aware of is that, yeah, there may be a change, um, when that happens, and you've got to be aware of how that might impact on you. I wouldn't, um, you know, certainly not… thing to be afraid of if you've got extra money there, then that's a good thing. Um, and the pension will get adjusted accordingly. Um, you know, they may want to get some information around the degree of that change, and I suppose, you know, if it's just going to reduce it versus taking people above the threshold.

And again, that could just be temporary. So, you know, the pension is something that, um, just because you're eligible now doesn't mean you'll always be eligible, and vice versa. If you're not entitled to it at a point in time, doesn't mean you can't claim again or revisit things. So, as things evolve, you know, the pension's always there as a safety net.

Um, and there's no limit on how many times, um, you know, you come and go from that point of view. So, um, I think for people just in downsizing, just be aware that if there's some money left over, um, from that, that there may be a change in their rate.

Um, and that's something they've just got to let Centrelink know about at the time, um, and then we'll adjust their pension accordingly. They want to find out beforehand from the Financial Information Service perspective, which is a service they can access. We can look at, um.

doing a scenario of what if. And so Peppa can kind of know up front what to be aware of. Obviously, there's tech, you know, potential taxation implications and those things, and I'm not here to talk about tax, I'm not qualified to do that, but they're probably things people want to be aware of.

Um, but other than that, it's really just what happens once it's sold, and be aware if there's any money left over. Obviously, if that money's spent again, and the situation remains the same, then the pension reverts to, you know, where it was beforehand.

Okay, something else when we're out running our seminars and talking to members, something we always get questions about is gifting. So if our members do choose to help their kids financially, how does this gifting impact the Age Pension?

A great question, and one I've heard often as well. I think a lot of people in the community kind of hear things that you're only allowed to give certain amounts, and so then there's this kind of anxiety or worry about what will happen. The truth is, it's your money, and so you can do what you wish with that money if you want to spend it, if you want to help someone out, if you want to go holidays, whatever you want to do.

Um, there's no restrictions on that, so you can give away or gift as much as you please. Um, what you've got to be aware of is that, um, the rules from a settling perspective is that you don't necessarily get an increase, um, in your pension when it's a gift. Um, in the same way that you might if you just.

spent that money yourself. So the way I would explain it is that if you were to, um, if you were to spend $100,000 normally on yourself, and your bank balance would reduce by $100,000, then if you're on a part pension, then we would expect to see some form of increase in your pension, because your overall position is reducing.

With gifting, what it says is that we'll maintain that amount for 5 years, and so if you gave away $100,000, we effectively just say you still have it for that time, for the 5 years, and so you don't lose pension as a result, you just don't get.

an increase as a result, and they're things people have to be aware of, is that if I'm going to give this money away, have I got enough left to support myself with the pension that will effectively remain as it is? So the limits that we talk about are where that kicks in as far as where we start to maintain.

maintain as if it hasn't been gifted. So that's $10,000 per financial year. So if you gave away $10,000 in a financial year.

And you have $10,000 less in your bank account, then what we're saying is that you've got $10,000 less in assets, um, and therefore, under the asset test, you would expect a little bit of an increase in your rate of pension. If you gave away $20,000, then we still take.

10 away, but then we've got this surplus amount of $10,000, and that amount, we just say it's still there for the next 5 years, so it still gets included. So, it's really kind of a… they cancel each other out as such, so it just stays in the mix, as far as the tally and your pension when it's.

being assessed continues to include that as if you still have it. So that's what people have got to be aware of is that, um.

You don't necessarily lose… well, you don't lose any pension, you just don't gain the same amount, um, and you've got to think about, um, the impact of having less money in reality when your pension isn't necessarily going to move as a result. But you're free to give away as much as you please.

two rules is the 10,000 per financial year that we disregard, and then over a rolling five-year period, it's up to $30,000. So, if you gave away 10 on year 1, 10 on year two, ten on year 3, if you gave away 10 on year four, then you wouldn't get that free area of 10,000. We would count that 10,000 straight away. So, again, if you've already got that money in the bank.

It's just the same result, because if you don't give it away, you've got it anyway, and if you do, we're still counting it. Where it gets tricky is if people, um, inherit money, for example, and so therefore we weren't including that money in the first instance, but then give that money away, then all of a sudden.

We've got a large amount that we're saying has been gifted, and that's then going to be included. So, I would say for people, again, if it's big figures, maybe come in and talk to someone first to kind of get an idea of what that impact might be. But that aside, there's no limit. You're free to use your money as you please.

Okay. What else we're finding is that working in retirement is actually becoming quite common. There are, though, some misconceptions that members have about working and the Age Pension and I think probably the most obvious one that.

I hear all the time is, if I work, my age pension's going to stop. Can you talk us through some of those misconceptions?

Yes, absolutely. So the beauty of our system is that although there is some means testing there, it has some fairly generous limits as far as before things start to impact and at which point we say.

you know, the pension's no longer available to you. But, um, as we always say, you know, income that you would get from work is always going to be more than what you would get, um, from a pension. And of course, that pension is always available to you down the track, if that's the case. And so, if people are happy with the income that's coming in, they're enjoying working.

then, you know, we would only encourage people to continue doing something that they enjoy, that they like, and if the money, you know, if they're happy with the salary that's coming in. But there's room for both, and so, um, there's nothing that says because you're working, you can't get a pension, and often people looking at.

A combination, so if people are looking at transitioning to retirement, they might say, well, I'm going to work part-time now instead of full-time, not quite ready to stop work at the moment, um, but I enjoy working, um, and I don't want to rely solely on the pension, so they can have both, um, get a bit of part pension, bit of work from income, and so the combination of the two then sustains them, and I suppose through.

you know, professional financial advisors, um, and even through the financial information service through Centrelink, um, you know, we can talk about the combination of the two, which can work really well. So, um, for many people, um, yeah, I would say don't, don't, or for everyone, don't, don't be afraid.

of continuing to work, you can certainly still be eligible up to a point. And there's also another thing called a work bonus, which is an extra incentive, um, that helps with that. Yeah, I was just going to ask, because a lot of members aren't aware that there is a work bonus, so can you explain.

How the work bonus works? I'll do my best. And so, um, so with the income test that's applied, as I mentioned, there's a free area where there's no impact, so the first.

at $218 of all of your income sources doesn't change your pension. Then we start to have this gradual reduction. The work bonus looks at specifically salary and wages. And so what effectively is is like a credit system that says we're going to apply some credits or a reduction.

to your wage before we make our tally up to work at how much pension to pay you. So, it's a $300 figure every fortnight, so it's not real money, it's… frequent flights is probably one way to describe it. It's a credit system. So, how I would explain it is that if you are earning $300.

A fortnight from work, and you've got a work bonus of $300 in that fortnight, Centrelink will subtract that $300 away, and therefore we're saying there's zero accessible income for that fortnight before we start applying the normal rules.

And so, if you earn, say, $1,000 in a fortnight from work, and you have a $300 work bonus credit for your fortnight, then we subtract $300 from that $1,000, and then we only apply $700 as income for the income test. So, effectively, what it's saying is that we're not going to count all the income that you're earning, because we're subtracting this $300 each fortnight.

And therefore, the impact on your pension isn't as great as what it might be without that.

The thing I would add is with that is that if you don't use any… so if you're not working, the beautiful thing is that that work bonus accumulates every fortnight, so fortnight one, you'll have 300, fortnight two, you'll have 600. Fornight 3, you'll have 900, and so on, up to.

Um, a year, which is 11,800 as a credit. And when that can be really handy is that often people in retirement might take on some seasonal or temporary work, or if there's an election, for example, they might go and work for the Electoral commission for a few days or a few weeks. Now, you might earn.

a few thousand… you might earn $5,000 in that time, which under the normal income test.

4,000 would take you off a pension for one fortnight. But if you've got $11,800 in your credit that's accumulated over the year, we're going to swallow that up with the work bonus credit, that $5,000 gets subtracted, so although you've actually earned it, you've got work bonus credits there that cover the same amount.

And therefore, there would be no income accessible for that period. So, to kind of round that up, it's an incentive scheme to encourage people to continue working, and also the impact on the pension won't be as great without it, and so it's basically subtracts.

what Centrelink counts before it works out, well, how much pension should we pay you now that you've done some work?

Hope that's made some sense. Absolutely, you've explained that really well, thank you. And, um, yeah, it's great to know that, you know, if I get to retirement, or when I get to retirement, if I want to keep working, there's the opportunity to keep doing that. So that's fantastic.

Um, okay, so… I know that, uh, many members do feel quite anxious about getting it wrong when they're reporting into Centrelink. What reassurances do you usually give people who feel uncertain about the Age Pension?

Um, what I would say is try not to worry. Um, mistakes happen on both sides, um, and I think if there's an error made, um, and I know that, um, you know, people are worried about, you know, potential penalties, those things don't exist if you've made a mistake, versus, you know, committing fraud, or.

Or some other… something like that. And so, um, the pension pays fortnightly. It doesn't wait for life and for circumstances, and so sometimes what happens is, and, you know, downsizing or selling a house is a classic example, you've got to wait for settlement documents to come through and all those things. You've got 14, you know, it'll say you've got 14 days to notify because your pension's paid fortnightly.

Sometimes it might be 6 weeks before that's happened, and therefore your pension's been paid for those 6 weeks, um, without including that information. When you then supply that, we've got to make an adjustment, and sometimes that results in an overpayment or a debt. Um, and no one wants to get an overpayment or a debt, but.

It's just something that happens, and that actually isn't an error, that's just a circumstance around it, you know, administrative, you know, timeliness. And so what I would say to people is that, is that, um, not to worry from that point of view. If there's an adjustment that needs to be made, it's not viewed from a criminal perspective, it's just an adjustment of your pension.

And, um, and then, you know, we just square it up, essentially, and you do that, you know, via your post office, or BPay, or however you pay. And similarly, people get underpaid, and the same things happen. So, there's that aspect of it that, you know, happens from time to time, but in a perfect world, if we're just updating things.

as they happen, then, you know, we reduce the risk. But mistakes do happen. People don't know the rules entirely, or are unaware of some things, um, and sometimes that information isn't there. Um, I would… again, I would just say to people, just always come in and talk to Centrelink if they're unsure.

Um, and we can always work things out. Even suspensions of payments. I've seen pensions suspended because someone hasn't responded to a letter that has either been lost in the mail, or they haven't received it, or they haven't, um… and the reason that those suspensions come is to actually, um, get people to then contact to say, oh, something's gone wrong here.

But we press the buttons that we need to, we get the information we need, and the pensions get reinstated. And so, um, things happen along the way, and there's, um, there's processes in place, um, to fix things. So from that point of view, you know, people shouldn't worry regardless.

And the other thing, as far as just applying for pensions, again, people are worried about putting the wrong thing in there, or, you know, not getting the figures right. That can be difficult too, and the way I train these people's minds is that it's similar to when you go to an accountant. They're there to… they understand the tax system, and they lodge your tax return on your behalf, but.

You're still responsible for knowing what your situation is. And so when the pension, assuming it's approved, you'll get a letter that says these are your overall assets and this is the income tally that we're using. If those things don't… makes sense to you, then I would prompt people to ask, um, rather than just leave it go. Um, it's our job to explain how things work. Um, so from that perspective, I would just say it's to ask questions, and maybe in that first 12 months of getting the pension, maybe you're more diligent.

and inquiring more often, but you'll be an expert in it, um, before long too, and so, you know, you won't have to do that ongoing, but I always kind of encourage people, for that first 6 to 12 months, just be really active in looking what's there, and make sure you're fully aware of what we're counting, what we're assessing.

And therefore, something doesn't quite add up. One, if it's an error, then we can get to it, um, quickly, because you don't want to leave things for five years, and then try and undo something that's happened five years ago, or pension being paid incorrectly for five years, you know, can add up to a lot. If you're getting something within two months, three months, six months, then, you know, those things are, you know, maybe not as severe.

So, um, yes, um, don't worry, um, there's always a way to fix things, don't panic. Mistakes do happen, but I… again, um, just come and talk to us and we'll help you.

Thank you. Uh, so what's the best way? You've mentioned, um, financial information service officers. What's the best way for members to engage one of those? Can they just come down to, say, the local Services Australia office, or do they need to book an appointment? How does that all work?

Yeah, so that… that… so the financial information service is a specialist role, and so they're not assessors of Age Pension, but they're there to talk to people about.

the pension, but bigger picture stuff as well. So, how does your super work? Talk about options as well, thinking of downsizing, all those kind of financial types of conversations. So.

to talk to one of those specialists, um, there's a referral or triage service, um, and that, um, generally starts… well, it does start on the phone. So, you can ring any of the main 13 numbers, so I think the Older Australians one is 132300, but any of those main numbers.

If, um, if you say FIS or Financial Information Service, it reroutes that call, um, to our team. National team and you'll speak to one of the officers directly, and.

Often they can just talk through it on the phone, but then if they think, well, actually, this would warrant a longer conversation, then we can book a face-to-face interview or even video conferencing, if you don't want to come into an office. So, ring the number, ask for financial information service, that'll reroute you through.

The wait time, um, at most is about 15 minutes, so, um, I know that next question will be, you know, there are long wait times, and often there are with the general line, but it's just a specific line, so you get through that initial stage of your name and those bits and pieces, and identifying yourself, but once you get through that and say phys or financial information service, it'll.

rewrite you through, and then they'll book a face-to-face appointment if required. Most offices, um, have a phys officer present, um, sometimes not every single office, but, you know, the one nearby. But as far as, um, just Age Pension enquiries and, you know, why is my pension.

increase, decrease, why am I not eligible? That's the job of every Centrelink service officer, so you can walk into a Centrelink office and ask to be seen, let them know what your inquiry is about, and they'll get you in touch with, um, you know, a skilled person there.

Again, you can ring on the phone if that's your choice, um, of channel, but you can just walk into an office to ask for that help. But financial information services specialists is a booking system and we'll also run through what to bring to the appointment, all those bits and pieces as well. So, um, but free service.

Really valuable, not financial advisors, so we're not selling products or recommending what people do. Um, it's just more about if you do this, this is what you've got to be aware of, this is how the pension works, all the things I've talked about, you know, are topics I could explain as well.

Awesome. Well, thank you, Sal. You have shared so much information with us today that I'm sure is going to help our members when they are applying for the Age Pension. Before we leave, have you got any last tips that you'd like to share with our members when they are looking at applying for the Age Pension?

Um, all I would say is plan… don't… well, don't plan for a pension, plan for retirement. So, you know, enjoy your life. Um, the pension's always there, but, you know, don't, you know, I would say to people, don't let that be your sole focus on things, because, um, obviously people have worked or got super, all those things, but… You know, look at the big picture of work and other things that can be doing, including the pension, and that's what I would say is just, you know, plan for retirement and not just for a pension.

Wonderful. We know that the Age Pension doesn't need to be fully solved today, but what matters is understanding how it works, knowing that it may play a role at different points in retirement, maybe not straight up, but perhaps later on, and just being confident reviewing those decisions as our circumstances change.

Thank you so much for your time today, Sal. We've really enjoyed having you here with us for our session. So if everyone could please return back to the lobby for the next session. Thank you.

Thanks

So, we've spoken about planning for retirement and we've covered income in retirement. We're now going to move beyond the numbers to the emotional transition and explore how to live well in retirement. When people think about it, they often focus on the numbers. Have I saved enough? Can I afford it?

But what many people are surprised by is that retirement isn't just a financial change. It's an emotional one, too. For years, work gives us structure, routine, social connection, and a sense of identity. So when that chapter ends, it's completely normal to feel a mix of excitement and uncertainty, even a sense of loss alongside the relief of finishing work. If you've ever thought, I should be feeling happier about this, or why does this feel harder than I expected, you're not alone. Nothing is wrong with you. This is a very common part of the transition.

Today is about acknowledging that reality. Retirement isn't about stepping away from purpose. It's about redefining it on your own terms and with the right support. I'm joined by Mia Northrop from our strategy and insights team. She is a seasoned insights and research leader with over 20 years of experience in market voice of customer and design research. Mia blends survey, interview, and focus group methodology and joins the dots between the different data sources to uncover deep insights that help Australian super steer members into their best financial position for retirement.

Mia is also co-author of life admin hacks where she shares her expertise to help people streamline the way they manage life admin, the homework of adult life. Welcome, Mia. Thanks for joining us today. Thanks Peter.

Now Mia, in your role, what do you do to help our members?

I have the privilege of talking to members about their experience with us, how they're thinking about their personal finances and super and helping drive product innovation and customer experiences here at the fund.

A lot of people see retirement as this permanent holiday. What may be a healthier way to look at retirement?

So the key thing to think about retirement is that it's a stage. It's not an event. And if you recognize that it's a stage that could last 10 or 20 or 30 years, hopefully longer, you can't be on holiday all that time. It gets pretty expensive and pretty unfulfilling. So a healthier way to think about it is as a transition, as a period. Another life event milestone that we can think about that's similar is getting married. So some people focus on the wedding, the event, the big day. We know that it probably pays to focus on the marriage itself. And the fact that life as newlyweds is very different to 10, 20, 30 years if you have a happy successful marriage. It takes effort for a marriage to flourish. It matures. It changes over time.

And retirement is similar. You have the event of that the glorious day of the last day at work where you might have resigned or you're stepping away from your business, but then you have 10, 20, 30 years ahead of you in your retirement. So you can reflect on what does retirement look like in your 60s or 70s or 80s? How might your needs change? How does your lifestyle change? What kinds of preferences or interests are you going to have at those different stages? And get intentional about those phases. So you can think about those different phases. Who will you live with? Where will you live? What will your day look like? What will your social life look like? Uh and be intentional about it. So yeah, a healthier way to think about it is it's a period. It has phases and to be intentional about each of those phases.

So, how important is it for a mindset to shape that retirement you you're looking for? Yeah. Well, like most things in life, mindset is everything. And there are two mindsets that are particularly useful for retirement. And our audience probably has heard of both of them.

The first one is a growth mindset as opposed to a fixed mindset. And a growth mindset says that you believe that as a person you can learn, you can improve your capabilities through commitment and hard work. A fixed mindset suggests that you're born with certain traits and smarts and that's it. So, you know, you can imagine that there's lots to learn about going into retirement. We've talked about so many things today.

A growth mindset where you are into lifelong learning and you're curious about things sets you up for success because there's lots to learn about retirement. There's the new financial products. There's getting your head around account based pensions, the government age pension, um the age care landscape and thinking about your life in a new way. So that growth mindset really comes in handy.

The second mindset is an abundance mindset as opposed to a scarcity mindset. An abundance mindset is a set of beliefs where you recognize the opportunities and the resources that you have available to you. Uh as opposed to a scarcity mindset which might keep you in that fear of running out, hoarding savings mode where you feel like there's never enough time, there's never enough money, there's never enough opportunities. So an abundance mindset isn't sort of thinking I'm going to spontaneously manifest money. It's still important to recognize the financial realities of where you are, but it recognizes that you have choices, you have options, you have resources that you can tap into, whether it's financial resources, cognitive, emotional, social, um, and that there's lots of opportunities and contributions you can still make.

So, those two mindsets together help you see yourself in a new identity as you move into retirement and tap into the opportunities and choices that you have before you in a positive way.

What advice would you give to a member who's feeling anxious or uncertain about what retirement might look like for them? Yeah. So, everyone's anxious about some aspect of retirement, whether it's will I have enough money? What am I going to do all day? Is my partner going to drive me up a wall if we're home together all the time? Uh, you know, how will I feel when I don't have a job title or a role in a business? So, that's, as you mentioned before, very common, though sometimes unexpected feelings.

The antidote to this kind of anxiety is action. So, everybody in the audience should congratulate themselves for tuning into the webinar because they're taking action to get certainty about what retirement might look like for them. And we encourage people to keep doing that. Listen to podcasts, read books, get your questions answered. Um, anything you can do to reduce that level of unclarity is going to be useful.

And there are two insights from our retirement confidence research that are reassuring here. The first is that when we talk to members who are in their 50s in that sort of planning stage, we ask them how confident do you feel that you will live well in retirement? And about 52% feel like they're going to be confident. It's a little less for women. And then we ask them again once they've actually retired. So they've gone through the transition, they've made all the big decisions, and that jumps up to 72% feeling like they're going to be confident uh in the rest of their retirement. So just going through the process, your anxiety actually plummets once you've made the decision and taken that step.

The second insight is that there are two most important drivers of retirement confidence beyond just your super account balance. The first is just having a goal, a target number that you're trying to hit and a plan to get there. And the second is knowing enough to manage your money. So again, taking action so that you have a goal, you've worked out how to get to that goal, and you've feel like you've led enough to manage your money comfortably or confidently is going to reduce that uncertainty by giving you clarity.

So that was what we encourage people to do. Make a goal, work out how you're going to get there, improve your knowledge so that you're confident in managing your everyday money and you'll have a much more enjoyable retirement because you're going to reduce those anxiety levels.

So again, comes back to planning. Yes, that's an insight that I hadn't thought about, Mia, and I'm sure other people wouldn't have thought about that sort of thing as well.

Now, Mia you mentioned before identity shift. How can people plan better at that stage of their life? Yeah, it's a really interesting thing that we see with our members and it comes down to everyone's relationship with work. So, everybody has a different relationship with work and they fall into roughly four different styles. I'm curious where you think you are with these styles and I'd like the audience to think about as I go through them, which one resonates with me and what does that mean for how I might navigate u retirement.

So, the first style is where work is just pays the bills. It's a pay check. It's important to have rewarding work, but your identity is tied up with your family or your faith or your community or your hobbies. It's outside of work. So for those people, retirement is a relief. They love the freedom, but it doesn't bring up the sort of existential crisis of, you know, who am I now? It's very much more about the practical stuff. So that's the style one.

Style two is where work is really a vocation or a calling. So a lot of people in helping professions feel this way about work. It's where they feel like they make a contribution. They feel needed. It's tied to a sense of responsibility and productivity. And so for these people, that transition can be a little disorientating because they feel unneeded. They feel like their talents might be wasted uh and they're worried about sort of being productive. So for those people in retirement, you need a way to channel those kinds of thoughts and energies into mentoring or volunteering or something where you can contribute in a in a similar kind of way.

The third style is for people who see work as providing structure and routine which you mentioned before and that social connection. So it gives shape to their day, it gives shape to their week and their year. It's where they get a sense of accomplishment. It gives them a sense of respect as well. uh and again there's that sense of purpose and meaning in the routine it gives their lives. So for those people there can be a sense of loss when work goes away. There can be a bit unsettling about what does my day look like now and why am I why am I getting up in the morning? You need to find new reasons.

The fourth and this style is probably the one that experiences sort of the greatest shift in identity is when work is really a big part of your identity. It's core to your identity. So work is where you get a sense of belonging. It's where you see your purpose, your status. It's where you set goals. You get a sense of mastery out of work. A lot of people who have their own business sort of have this kind of relationship with work as well. So for those people, they need to think about how they're going to have these opportunities to contribute or build their self-worth in another way when paid work isn't at the centre of it.

I think I'm probably the first one with a bit of the second one somewhere in there. I think I think it also changes over your career. Like you might have started out feeling like oh yeah it's a I'm this is my calling and as you get you know decades down the path your relationship might change.

A lot of people plan financially less so emotionally. What is one thing that surprises people when they retire? Yes. So for people who are deeply connected with their work, a whole raft of feelings can come up that they're not expecting but are very common. They can feel grief. They can feel loss. They can feel lonely. They can feel depressed and anxious. They might feel guilty. They might feel bored. I've interviewed people where they're like time is bit more boring than I thought. So some people feel that. You might feel none of those things. You might feel just utter elation and freedom and you're living your best life and you're totally in love with your lifestyle and you might feel some of these emotions at different stages of retirement. So some people might feel flat and unsure about how they're going to uh inject some purpose into their life.

We also see with people who have more senior roles or run their own business who are used to being consulted on things and deferred to and being at the centre of things. Sometimes these people feel a little invisible. They're sort of at the edges of things. So if their work gives them a huge sense of self-worth, they also need to find other avenues for creating that feeling. So yeah, all of these feelings are common. You might feel different ones at different stages, but there are things you can do at each of those phases to work through those feelings or prepare beforehand so they don't hit you so hard.

Now Mia, we've spoken a couple of times about identity shift. How can people manage that identity shift in a in a healthy way? So, a good way to think about it is thinking about how you showed up at work in terms of your skills and your attitudes and behaviours and can you use those skills and attitudes and behaviours in how you show up in new parts of your life.

So, if you were used to managing people or leading people or uh organizing projects, you might turn to working in a nonprofit or in the community. You might volunteer. You might mentor people. You might jump on a board and you get to use these same skills just in a different way. So that can be helpful if that's the way you're wired. We also see people who think, okay, well, I was primarily useful through paid work. Now I'm going to lean into this idea that I'm primarily useful through my relationships. So they might be caring for a partner or a relative, a parent. They might provide more support to grandchildren or their adult children with some healthy boundaries in there. Um, but they can sort of lean into their family and take on more of those matriarch patriarch roles where they're interested in a sense of legacy for their family. And that can be very rewarding and very profound for people.

So depending on how you're wired, um, you can start to set some of these things up and rebalance your life in this way before you actually leave paid work. So it's not such a binary switch on switch off if you kind of taper into it.

Some interesting concepts there that again most people may not have thought about. Did your research show there's a difference between those that plan their retirement rather than those that just go straight into it?

Yes, we certainly see patterns in different groups here. The research is pretty clear. So we find that there's people who plan their retirement whether it's at a certain age or a certain number of years feel more in control of their retirement. They've been proactive and so that financial transition and the emotional transition is usually a little smoother.

For people who don't retire on their own terms and that can be because there's health issues or they have to care for a partner or they've been made redundant and can't find suitable work. those people when we talk to them they sort of talk about retirement happening to them instead of choosing it. So that sort of loss of agency that loss of choice can make them feel quite anxious uh and they can have a harder time shifting into retirement. So it's interesting that retirement confidence isn't just about having that sum in the in the balance. It's also about that readiness and that choice and how much control you have about retirement.

So, we've talked about um the transition to retirement product. We see lots of people who taper down, go part-time, start playing around with a new lifestyle, and feeling not just the new pace of their day and their week, but also how they manage their money in a different way. And they often have sort of a smoother retirement because they're emotionally ready as well as financially ready.

Now Mia, you've given us some great insights, but what is one thing that people could do to help prepare for this transition?

Yeah, great question. I'm going to say something that I think some people will find unexpected. They're probably thinking I'm going to say get some financial advice, which obviously we encourage. It is a great step to take. But what I suggest people do is a little experiment, which is to take some time away from work. Might be a week, might be a few days. And don't actually go on a holiday and plan holiday activities and a holiday budget. Just live at home as if you were retired and plan your days as you would if you were thinking, "This is what I want my retirement to look like. What does it feel like when you're at home and you've planned certain activities? Maybe you thought you're going to lean into hobbies. What does it actually feel like to live this way?" And you'll be surprised what you learn because you'll notice parts of the day where you were having a great time. You might notice parts of the day where there was some friction or some boredom. And it just gives you a little sense, you know, a reality check and a bit of a sense check about what retired life might actually look like and feel like, especially if you're retiring at a different time to your partner.

If you have a partner, what does it feel like when one of you is at home and the other is still working? How does the pace of the week feel? How does the rhythm of the wig feel? It'll give you some clues about what you might need to dial up or dial down or think about differently when you actually retire. So, it's a little lived experiment uh just for a few days or a week to see how that life actually feels. Uh and it'll give you some clues as to what you might need to plan for the future.

So, if you have a partner, it's what you do together, what you do apart. That's right.

Thanks, Mia, for your time. Unfortunately, we've run out of time. What is one thing that you could leave with people to make the most out of their retirement?

Yeah, I'd suggest that people reflect on whether they have a retirement role model or a retirement buddy. So, one thing we noticed in the research is that a lot of people, they might have had people in their lives that have retired, but they haven't sort of looked closely at how they did that. And a retirement role model can be a really powerful north star to start thinking about. They've retired. I love the way they're living their life. how did they do that? Uh, and having a chat with them or having a buddy that you can talk through your planning together. So, someone that you can bounce ideas off, talk about what they've researched, the products they've discovered, the questions they have, so that you don't have to go through this alone. So, who is going to be your sort of wingman as you go through retirement or start planning for retirement?

And that does a couple of things. One, it gives you uh a sense of agency because you're like, if they can do it, then I can do it. and also you have someone to share ideas with and learn from uh and step into retirement together if you're going through this at the same stage. It could be a colleague, it could be a friend, it could be a family member, it could be someone you've met at the dog park, it doesn't matter as long as you can have those sort of transparent conversations about what you're doing with your money and how you're going to set up your retirement so that you actually really enjoy it.

Thanks, Mia we really appreciate your time and the insights you've given to us today. We hope this has got you thinking about how you can prepare not just for the financial transition to retirement but the emotional one too.

Welcome! Thank you for joining this session. We hope you've been enjoying the event so far. In this breakout session, we're going to explore some of the practical questions that members often have about estate planning, from planning for incapacity.

To avoiding common mistakes and making things simpler for the people that you leave behind. And there is no better person to help us explore this than Ann Janssen, founder and divisional head of Estate First Lawyers.

Welcome, Ann. Thank you, Kim, for having me.

Really glad that you've joined us today, Ann. Ann has a Bachelor of Laws with honours and a Bachelor of Arts in Economics from the University of Queensland. She also graduated with a Master of Business Administration in 2004.

Taking out the Graduate School of Management Prize for the best MBA of the year. Ann has over 20 years of experience in estate planning law and she is noted for delivering innovative solutions to blended families.

And strategies to prevent inheritances going L-shaped. That is, to stop inheritances from ending up in the hands of unintended recipients.

And also deals with the estate planning matters within the firm, which involve complex advice regarding how various structures pass on the death of key participants, including self-managed super funds, companies and family trusts.

And she's a keen advocate of testamentary trusts as a tax-effective tool in inheritance planning.

Now, just a reminder that the views expressed by our guest speaker Ann throughout this session are those of Ann. Based on her experience and expertise, and not of AustralianSuper. And a final reminder that if you have any questions throughout this session.

Please pop them into the chat function and our team will do our best to answer them for you as we go.

So, Ann, many people believe that having a will means that their estate planning is all done. Why is this often a misconception?

Well, it wasn't a misconception, perhaps 30 years ago. It is now. And the reason for that is that our lives are a lot more complex now, we have a lot more assets than our parents and grandparents did, and also.

Our relationships have become more complex, and so 30 years ago, you might have had, um, a house with your partner.

probably didn't call him partner then, you called him the husband or a wife. Now it's a partner, and your… your affairs were fairly simple. Your house wasn't worth that much, and you had maybe 4 or 5 kids to share it amongst. Now, we have far more assets, superannuation came in in about 1991.

And all of a sudden, our wealth has become more complex, we might be on a second or third relationship with stepchildren and children from previous relationships, and now we've got a lot of money and more complexity, and a will just cannot handle.

all of those different things, particularly as the wealth that we hold our assets in.

It's not all covered in our wills. So, Ann, what key assets or decisions are commonly not covered by a will, particularly for Superfund members? So, most of us have superannuation, and some of us have as much superannuation as we do.

our, um, the value of our home. So, superannuation is not governed automatically by your will, and that comes as a bit of a surprise for a lot of AustralianSuper members, or any Superfund members. Superannuation is governed by its own legislation.

And by its own testamentary documents. And the main testamentary document that governs where your super will go if you pass away is the binding death benefit nomination.

Okay, so… What are some of the most common estate planning mistakes you might see that causes stress, delays, or perhaps even disputes for families?

There are basically 3. bad mistakes that lead to a lot of problems in estates. The first is the, uh, the will itself has been poorly drafted. This is causing a lot of construction cases, construction of the wording cases going to court, and any court estate matter is very expensive.

The second big one is that the estate plan, which covers more than a will, it covers your superannuation. If you have trusts, you need separate documents for that. Same for insurance, um… And also jointly held assets do not pass under the Will Act in the first instance. They go to joint survivor. So, if you are not looking at all of those elements and aligning all of those elements together, you have what I call a poorly planned estate plan.

And if you have not covered all of the beneficiaries that you need to, you are highly likely to have big problems later on. So, for example, I was looking at an estate only this morning, and the lady left the residue of her estate.

to four charities. She had an estate worth $3 million, and because of all of the problems in the drafting, and the problems in the planning, we've actually got to the point where I act for one of the residuary beneficiaries.

the charities are getting nothing. The legal costs are over $600,000 to the lawyers who were fighting it out, not us, but I'm now looking at it, and I'm going, that is huge, and it's just such a shame. And that one is… I've only just finished doing so, it's sort of top of mind.

Wow. The third thing, um, is, uh, and this is a real crying shame, is there are tax opportunities and concessions that are available to people who get the right advice when they're doing their will and their estate plan.

And unfortunately, a lot of people are not getting that advice, and the tax concessions and exemptions are significant for those death benefits.

Okay, so how often should people be reviewing their estate planning documents, and is there a certain, um, you know, are there certain life events that perhaps should trigger an immediate review?

So there certainly are Kim life events where if you did, if you just ignored them and you didn't make changes to your estate plan, it would not go well for you. So, and these are the classic ones, like.

the death of a significant beneficiary or your executor, or someone loses capacity in those positions. Um, other things include a relationship breakdown. You separate from a partner, you marry a partner, you divorce from a partner, all of those are what we call trigger events.

Um, that need you to review your estate plan. You should nevertheless, review your plan at least every 5 years, or earlier if a major trigger event occurs.

Okay, so you mentioned earlier around super, uh, you know, not flowing through a will. What role does the Superfund trustee play?

So, if you don't have a binding nomination or a reversionary pension nomination, if you are in income phase, i.e. You have retired, then the discretion as to who to pay your super death benefit to.

belongs to the trustees. So, for instance, the Board of Trustees of AustralianSuper would then have the discretion as to who to pay your super to. Now, they are limited to certain dependents under the superannuation legislation.

Or, they can choose to pay it into your will, but it's at their discretion, and it's out of your control and out of your hands as to who they decide to give it to. And what often happens is the squeaky wheel gets the oil.

Uh, but that might not be the person you wanted it to go to.

So, we've got a couple of different types of nominations. What's the practical difference between, say, a binding and a non-binding death benefit nomination?

There's a big difference, and as the name suggests, if you have a binding death benefit nomination in place, it binds the trustees to abide by your decision, as long as you've filled out the forms correctly, and you have nominated.

a superannuation eligible death dependent. So, assuming that your trustees are bound to follow your wishes. But if you've just got a preferred nomination, then it is just a wish and a hope. It is not actually binding on the trustees, and the trustees can make a different decision and they are legally entitled.

to disregard your preferred nomination and go with who they think should get the money based on a number of indicia that they follow.

So a binding nomination is important. What are the most common reasons that a binding nomination might end up being invalid or outdated?

a trigger event, so you nominate your spouse, but you're divorced from that spouse, or you've separated, but the spouse is still nominated. You might not have filled out the form correctly with the two independent witnesses, if that's what was required. It's quite strict and technical.

uh, how you complete those nominations, and the requirements can change depending on which super fund you're with, and if you have a self-managed super fund, more so. Um, so… so those are the key things. Also, um, some, uh, super funds have.

lapsing binding nominations that only last for 3 years, and so you might have let your binding nomination lapse, uh, and if you then lose capacity, you can't actually renew it. Uh, and so that, that can be a problem for you.

Okay, so Ann, you mentioned a little earlier a reversionary pension. When might a reversionary pension be more appropriate than perhaps a binding nomination?

So, that's a good question, Kim. And reversary pension nominations work so that if you are in pension phase, because you have retired, for example, you have… usually have the choice of either doing a binding nomination.

For instance, let's say to your spouse, um, or you might decide to actually do a reversionary pension nomination, so your pension reverts to your spouse on your death. Now, that keeps… that reversionary pension.

will keep your super in superland, and your spouse will receive your pension. And usually, pensions in pension phase are tax-free. So there's some really good tax benefits in doing that.

If it's a binding nomination, you may… your spouse, who survived you, for example, in that example.

We'll have to cash it out, uh, and it might not be as tax-effective then in his or her hands, as it would have been if it stayed in superland. But if you have… if you are relying on that super death benefit.

to pay specific gifts to, for example, your children, or children of a previous relationship, then you have to be most careful about doing a reversionary pension nomination, for example, to your spouse, because then the gifts and the will.

will not, um, be able to be affected. Okay, and Ann, why are adult children often surprised by tax outcomes on super death benefits?

Nobody wants to pay tax. I think it is surprising because in Australia we don't have death duties. And so we don't understand, you know, a lot of clients don't understand, well, why all of a sudden am I being slugged with a death tax on mum or dad's super, for example?

Um, and so it doesn't apply to all people, but certainly with adult children, because they are not financially dependent on their parent, unless they were, for example, if they were disabled, they will be taxed at a rate of 15% or 17%, depending on whether the super goes direct to them or through the estate.

And it will be taxed on the taxable component of the deceased person's death benefit. And usually, most of a person's super is the taxable element, and so you can get quite big.

hefty tax bills, if you decide to leave your superannuation to your independent adult children. And so this is why I was talking about the planning and the tax planning in estates. You can actually avoid.

significant tax bills by driving the super to people who don't pay the tax on it, and driving other assets to adult children in that example, where they won't pay tax on, say, for instance, the transfer of a property or shares.

There's a lot of considerations here, Ann. Why is planning for.

incapacity, just as important as planning for our death.

So 30 years ago, if I harken back to then, we were not living as long as we do now. And enduring powers of attorney, the legislation for that only came in around 30 years ago, which is remarkable.

And so I guess now that we're living well into our 80s and 90s, some of us will be living with incapacity. And so… If you don't have the right documents in place to give decisions that you would have made, but now you cannot make, to the right people, and with the right conditions on those powers.

then you have no control whatsoever of what happens to your estate in any period when you have lost capacity. That could easily impact on your will.

But more so, it impacts on the quality of life that you would like to have, even if you don't have capacity.

Very important. Absolutely. So, and from your experience, what are some simple steps that we can take to make an executor's job a lot easier? Because it is one of those jobs that, you know, there's a lot involved in being an executor. What can… what simple steps can we take?

So I always say to clients that if you want an elegant and simple solution, there's complexity to get to it. But once you've got it, the plan becomes elegant and simple. So, to me, it is a very clear recipe.

For people who want to minimize the risk of expense in estate matters, a nice simple streamlined process for your executives, and an optimization of all the things you can avail yourself here in Australia in terms of tax concessions. And that is essentially to have a really.

professionally drafted will, this is not an area that can any longer be dabbled in. You know, we used to dabble in different areas of law years and years ago. We all had a little go at conveyancing, a little bit of family law.

Little bit of drink dry, bit of wills and Estates.

Our world has become so much more complex now, um, and… and the inheritances we have to give are so much larger.

that everything has become specialized, and so I would encourage viewers to always see an estate planning lawyer, someone who does not dabble in this, but who has it as one of their main focuses, if not their only focus, of what they do.

Because then you're going to get a well-constructed will, you're going to get a well-constructed estate plan, thinking about all the pieces, the moving parts in that, and they're going to know all the advice to give you to make sure your estate is maximized.

Expenses are minimised, tax is minimised. Okay, so we've learned a lot today in this session. If members only take, say, three actions after today, what should they be?

Okay, briefings. Um, take your sleep plan seriously. A simple will is not going to cut it, and you are increasing the risk of your inheritance going off in ways you never conceived of, um, like the example I gave you that I just did this morning.

So take it seriously, because it has become complex. If you don't have anything in place, or you just have a simple will, I would encourage you to get it reviewed and get it reviewed by an estate planning lawyer.

wherever that is, whichever… whoever you're comfortable with. If you have your estate planning in place, but you're concerned that maybe, um, the lawyer you use, or you did a DIY will, or something like that, it's… it doesn't hurt to get it reviewed.

There might be things that you've missed, you might think you've got everything in place. I've always said, I'm not worried about the people who haven't got anything in place because they know they're naughty.

But the people who've got something in place might be oblivious to the fact that what they've got in place is inadequate.

So get it reviewed. Okay, thank you so much, Ann. That's all we have time for in this session. Thank you so much for joining us, and we hope that you took away something useful from this session. Again, big thank you to you, Ann, for joining us and for lending.

ask your expertise on estate planning. So please make your way back to the event lobby to join the next session, which is a panel Q&A with our investment expert and a financial planner. Thank you. Thank you, Kim. Thanks.

Hello, everyone. Welcome and thank you for joining our Who Inherits Your Super session. Now, the concept of beneficiaries can often raise lots of questions. Who should I nominate? What happens to my super when I pass away? And will my super be taxed?

So today we are going to unpack these questions and also explain how you can ensure your super ends up in the right hands. My name is Yen Du, I'm an Education Manager at AustralianSuper, and I'll be taking you through today's session.

Now, please do keep in mind this session is general information only and not personal advice. So it is important before you make a decision to consider your own circumstances.

Now, before we kick off, I do also want to let you know if you have any questions along the way, please feel free to type it into the Q&A box. We have the education team in the background answering questions today. Now, a common thing we often hear members say is that, well.

I have a will, so do I need to worry about where my super is going to end up?

Now, making sure your assets goes to the right people after you pass away isn't as simply as stating your wishes in your will. Because a will generally covers assets that you personally own. So assets such as your home, your car.

Money that you have in the bank and also investments. Now, these are included in your estate, and it's distributed according to your will.

Your superannuation, on the other hand, it's actually held in a trust by your trust, the trustee of the super fund. So many people actually think that super informs part of their estate, but that's not always the case. As super isn't necessarily.

Always covered by your will. So that's why it's important to have an estate plan and also to nominate beneficiaries for your superannuation away. Now, there are a few options available when it comes to deciding what happens to your super benefits. So as you can see here, there are three options.

A binding nomination. A non-binding nomination, and also a reversionary. So we're going to talk about each one.

With a binding nomination, it is a legally binding document, so the trustee, they must follow your written instructions about how your benefits should be distributed to your chosen beneficiaries, as long as it's valid.

Now, to make a binding nomination, you do need to print the binding nomination form, fill it out, and also sign it in front of two independent witnesses.

and then return it to the super fund. Now, as you can see here, there are 2 types of binding nominations. The first one is lapsing. Now, this means that every 3 years your binding nomination, it will expire, so you will need to make a new nomination.

You can't simply update your existing nomination. You do need to make a new one. Now, before it expires, AustralianSuper will write to members to let them know the three years it's nearly up, so that you can make a new nomination.

Now, if you don't, um, if you don't update or make a new nomination, it doesn't just disappear. It just reverts to what's called a non-binding nomination, which we're going to talk about next.

Now, AustralianSuper also offers a non-lapsing option. So this means there is no expiry date, so your nomination will not expire. So unless you send in a new nomination or cancel your existing one, it will remain in place.

So members can choose between lapsing and non-lapsing nomination. The different types, but it is on the same form. So when you visit our website and download the form, there is a box to tick whether you want it to lapse, so every three years, or in the main non-lapsing.

Now, because a binding nomination, it's legally binding, it's very important to update your if your circumstances change, is remember it's important to update it. So, for example, if you get married, if you separate or have children.

Now, let's talk about the second type of nomination. This is one I often see more often.

So a non-binding nomination, it usually happens when you log into your online account, you navigate to the beneficiary section, and then nominate someone to receive your super benefits.

Now, with a non-binding nomination, it's essentially a preference. So while the trustee that will take into account your nominated beneficiaries, they are required to follow the law to check if there are any other eligible beneficiaries.

And because of this, your super may not always be paid to the person that you nominated, because this nomination, it's not legally binding. So, in contrast, the one we looked at earlier, the binding nomination, that is legally enforceable.

Now, with a non-binding nomination, this is more of a guideline for trustee.

So it may not always result in your super being paid to your nominated beneficiaries, though the trustee will consider your preferences.

Now, it's all… it's what's important to consider is that, you know, what is your situation? Understand what type of nominations do you currently have if you've nominated?

If you would like to make a non-binding nomination, um, it doesn't need to be on the paper form. You can actually log into your account and nominate your beneficiaries that way. You can even update, uh, if your circumstances change as well. So it is easy to do.

But, um, it's important to consider what's best for your personal situation.

Alright, let's have a look at the third type of nomination. So this is a reversionary. Now, not many people are familiar with this type of nomination, because this option is only available to members who have an account-based pension, such as a Choice Income account.

or a transition to retirement account with AustralianSuper. Now, you can only make a reversionary nomination if you're already receiving income from that account. So meaning your account, it's moving to that, uh, the drawdown phase.

Now, with a reversionary nomination. It allows your nominated beneficiary, usually a partner.

To have the account transferred into their name if you pass away. So that way your nominated beneficiary that will continue to receive those pension payments that you will receiving.

That benefits it continues to be paid until that account reaches zero balance. The beneficiary can also access lump sum withdrawals if needed.

Now, with a reversionary nomination, your money, it does remain in the superannuation system. It's simply transferred into your beneficiary's name, and they continue to receive that regular pension.

Now, the next thing we're going to have a look at, who can you nominate as beneficiaries? Because.

Now, this is important because many people aren't aware that superannuation law sets out who is eligible to be nominated. So let's have a look.

You can nominate your current spouse or partner includes legally married spouses, de facto partners. It covers relationship both of the same sex as well as opposite.

Now, a spouse, I want to explain that a spouse can be a person you're legally married to, even if you are estranged or separated. So if you haven't formally ended the marriage, your partner is still considered a dependent under superannuation law. You can also nominate a child. They can be of any age. It also includes adopted children as well as stepchildren. Now, one thing when it comes to stepchildren, they are included. However, if your relationship with the natural parent comes to an end, or that natural parent passes away.

That child is no longer considered or legally considered a stepchild.

They may become ineligible. However, they may still qualify if they are a financial dependent or if they live with you and rely on you.

Now, let's have a look… let me explain interdependence. An interdependent is someone that you, um, live with, you share close personal relationship, where one or both of you provide financial and also domestic support or care for the other person.

Now, when it comes to financial dependence, it's someone that relies on you for necessary support, and also that support, it must be significant enough that without it, the person would experience genuine hardship.

So to be considered financially dependent, the support you provide, it must be essential and also relied upon for their wellbeing.

And then the final eligible nominee is your legal personal representative, which links your superannuation to your estate. So by nominating your legal personal representative, your super follows the instructions in your will.

Allowing you to nominate anyone you choose as a beneficiary. So if you don't have, for example, a valid beneficiary under these rules, you may consider nominating your legal personal representative, and through your will, you can then nominate anyone you wish.

Now, when we talk about dependents, there are actually two definitions or two meanings. Now, I've just talked about a dependent under superannuation law, super legislation. This one comes from the superannuation Industry Act.

It's often referred to as the SIS Act. Now, these are people who are allowed to receive your super if you pass away.

Now, the second definition are these are dependents under tax purposes. So these rules, it determine who can receive your super death benefit tax-free.

Now, the important thing to understand is that these two definitions that don't always line up. So someone, they might be a dependent under super law, but they might not be a dependent for tax purposes, or they might be or you might be the other way around.

And also, on top of that, not all dependents under super law can receive that benefit as an income stream. Now, to make this a little bit clearer, let me walk through some examples.

So with when it comes to current spouse, whether it's legally married or de facto.

They are dependent under both super and also tax rules. So it means that they can receive your super directly.

And it's paid to them tax-free. They are also eligible to receive that as an income stream. So if you have a retirement income account.

Now, when it comes to a former spouse, they are not considered a dependent under super legislation, so they can't receive your super directly from the fund.

However, if they receive your super through your estate, so under your will.

Through under the taxation legislation, they could receive the benefit tax-free.

Now, a former spouse is not eligible to receive any income streams from your super.

Let's have a look at children. Now, children under 18 are considered dependents under super legislation and also tax rules, and they are also eligible for an income stream. So they can receive your super directly, it's tax-free.

Um, they can receive the benefit as an income stream, a regular payment. Now, when it comes to children over 18.

If they are no longer a financial dependent on you.

They can still be nominated as a beneficiary. However, under tax rules, they're not considered dependents. So it means they must pay tax on that benefit.

Now, children over 18 are not eligible to receive a regular income stream unless they are either permanently disabled or they are younger than 25 and financially dependent on you immediately before your death.

Now, when it comes to financial dependent and also people you are in an interdependent relationship with.

They are considered dependents under both super and also tax legislation. So it means that they can receive your super benefits directly tax free. They are also eligible for an income stream.

Now, we're going to have a look at a case study very shortly, just to show you how the rules apply in different situations. But before we do that, when we're talking about when tax is paid on super benefits, it does depend on several factors. So let's have a look here.

Now, it depends on the tax component within your account. So we're going to have a look at this one next. It also depends on whether your beneficiary is a dependent for taxation purposes, which we've just had a look at. Another factor is how is that benefit paid?

So is it paid as a lump sum or as an income stream? Sometimes the age of the deceased and beneficiary plays a role. There's also transfer balance cap considerations.

Now, your superannuation account, it's made up of two components. So there is a tax-free component and also a taxable component. You may not be aware of this, but your super is actually divided into these two components.

So, one is your tax-free, the other is taxable. We're going to look at what makes up each one. We're going to start with a tax-free component first. So these contains any after-tax contributions that you've made to your super account.

So this includes… contribution and any contributions made by your spouse.

So these type of contributions, they are usually paid from your bank account, and they're not taxed when they enter the super system, because you've already paid tax on that money. And since tax has already applied, these amounts goes into the tax-free component.

I can see here it also includes government co-contributions as well as any tax-free component of a from a of a rollover from another super fund.

Now, let's have a look at the other main component, the taxable. So most people have funds in this category. So it's made up of the usual types of contributions. So employer contributions, salary sacrifice contributions from work.

Now, because these are generally taxed at a concessional rate, usually at 15% when it goes into super, these makes up the taxable component. It also includes any personal contributions where you can't claim a tax deduction.

Along with any investment earnings. So, what's important to know is that how contributions are classified, because this can affect the tax that may be paid on your super benefits, depending who you nominate as a beneficiary. Now, the tax-free component.

It's always paid out tax-free, no matter who receives it. However, if money from that taxable component is paid to.

Beneficiaries who aren't considered dependent under tax law, tax will apply, and that tax that's payable is 15% plus the Medicare levy.

Now we're going to have a look at a case study just to show you how this might play out. So let's meet John and his family. So John is 60. He's married to Laura, who is 58. Together they have a son. So Ben. Ben is currently studying in uni. He's living at home, and he's also financially dependent on John and Laura.

They also have a daughter, Meg. She is 28. She has her own family, so she's married, she's living independently, she's not financially dependent on John and Laura.

She also has, um, a daughter, Ava. So Ava is 4 years old, and so that's John's granddaughter.

Now, sadly, John passes away, and at the time of death, his total super death benefit is around $400,000. Now, to keep things simple, we're going to assume that his entire balance is made up of these.

taxable component. And we're going to have a look at what are the tax implications if the full amount is paid to each of John's family members.

So, starting with Laura, Laura is John's spouse. So she's considered a dependent under super legislation. It means that she could receive the benefit directly.

And, um, she's also eligible for an income stream, and that payment is tax-free.

Now, Ben, he's financially dependent on John. He's starting in uni, living at home, so he's treated the same way. He can receive the benefits directly, tax-free, and he's also eligible for an income stream.

Now, Meg, on the other hand, so John's, um, other adult child, she is considered a dependent under superannuation law.

Now, but she's not a dependent on the tax law.

So it means that she can receive the benefit directly, but because she's not a dependent on the tax law, she would… that amount that she received, it is taxable because 100% is that taxable component. So that tax payable, it works out to be based on 15.

Percent plus Medicare levy, it's $68,000. Now, Ava, so that's John's granddaughter. She's not classified as a dependent under super legislation, so it means that she cannot receive the benefit directly or as an income stream.

If Ava received the benefit through John's will, that amount is taxable as she's not a dependent under tax purposes.

However, things could be different if Ava, say, was financially dependent on John and Laura. She could be an interdependent or she, um… It's a financial dependent than things it could change, she could, um, receive the benefit directly, and even, um, receive the benefit tax-free. But at the… as the current situation is, um, because Ava, she lives separately, she lives with Meg, um, she's not a financial dependent, so she isn't eligible.

So hopefully you can see there why it's important to plan ahead through that case study. Now, here are a few actions you can consider after today's session. To nominate or review your super beneficiaries. So consider the type of nominations available. We talked about binding, non-binding.

And also the additional reversionary. So take the time to reflect. The best option, um, based on your circumstances, and also regularly check your beneficiary nomination. It's up to date as well. It reflects your current circumstances, because life events like marriage, divorce, having children.

It can change who you want your super to go to. Also, think about your estate planning needs. So you may want to consider seeking legal advice or expert advice to make sure you're.

needs are set up correctly and properly documented. Also, take the time to communicate your wishes to relevant parties, so having those open and also honest conversation with family members or anyone that's going to be affected by your by your decision.

Now, AustralianSuper offers access to a range of advice options, depending on your needs. So it is worth exploring the support that's available to help you make informed decision for your future.

Now, that concludes our Who Inherits your super session. Thank you for joining us. You are now welcome to navigate back to the lobby when you are ready.

Over the course of the event, we've talked about planning for retirement, managing your money, and living well once work finishes. As mentioned before, the education team have been answering your questions as they've been coming in during the event. We're joined again by Sam and Kris who work with members every day, answering questions like the ones that you have asked today. It may seem a bit strange that we have a second Q&A session, but we're doing this because the feedback you've given us from previous sessions, you want us to spend more time on Q&A.

They're going to answer some of the questions that you have sent through that relate to the real decisions many of you are facing right now. So welcome back, Kris and Sam. First question, Kris, do I have to move my money out of super once I retire, or can it just stay there?

So retirement is not a catalyst for you to make structural change to your superannuation. So, um, all the old rules around you must do something when you retire with your super, they're all gone. So, essentially, the decision is now left to the member as to what they would like to do with their superannuation once they retire.

So I can just leave it there, there's no reason for me to take it. One of those decisions can be to do nothing. Absolutely. There's lots of other decisions you can make as well, but one of them is to do nothing. And those decisions could be enhanced with financial advice of what might be the best way of me using that money. Absolutely. Before you make any decisions around structural changes to your super, that's quite a significant.

Decision to make, absolutely get some advice. Kris, question about insurance, something new today. I've noticed an increase in the insurance premiums. As I get older, and maybe I don't have a mortgage, do I need to worry about keeping insurance?

Um, I think as our circumstances change, it's important that we revisit our insurance needs. Um, insurance is part of the offering here at AustralianSuper, but there is a cost associated with holding insurance through our products, and I think, um, one of the things I would encourage all members to do is, as their circumstances change, not just.

revisit the wealth creation, or retirement planning elements of their financial situation, but also the wealth protection and the insurance elements of their financial situation, because they largely go together. Wealth creation, retirement planning, and wealth protection, or insurance-based advice, that they are, I guess, three sides of a triangle. So it's very, very hard to make a decision on one side.

without considering the other two. So, if you've got insurance-based questions, I think it is appropriate to seek some advice, because ultimately, you don't want to be paying for stuff that you don't need, but similarly, you don't want to be cancelling something that, you know, may be of significant benefit to you.

So it's just a matter of revisiting your situation at that time. Yeah, reviewing, not cancelling. Many questions have come in about how AustralianSuper invests, Sam, and one of them is about how does AustralianSuper, or does AustralianSuper invest in gold and crypto?

Those are 2 types of assets that have been top of mind. They've been in the news a lot lately, especially when something has a very high return for a short period of time. It becomes in the limelight. In the AustralianSuper portfolio, we don't invest directly in gold or directly into cryptocurrency like Bitcoin.

However, we do look at these in terms of themes in the portfolio, so one aspect in our Australian shares portfolio, we do have exposure to gold mining companies, and those are companies that have actually done really well, especially recently with the materials boom.

With something like cryptocurrency, the challenge we have with that is how do you value it? It doesn't have an income stream, there's no projection of what it's worth tomorrow, so we really have challenges in putting that in the portfolio because of the inherent risk there.

On the other side of that is, we do look at the blockchain technology, which is behind crypto, and how that's enhancing digital services, as well as even investment structures. So it's one thing we look at in terms of how companies are using something like cryptocurrency or the blockchain technology.

And the investment team are constantly looking at that to see how… where the opportunities are to increase member benefits. Correct. Kris, question about the Age Pension. How does rental income affect my pension if I still owe money on the property?

That's a good question. So what Centrelink is interested in is the net rental income that that asset produces. So a little bit different to, we spoke historically around deeming and account-based pensions and bank accounts.

Property has its own income assessment, so maybe an example might be easiest here. Um, let's say you rent out your property and it generates $10,000 a year of rent, but from that $10,000 of rent, you have $6,000 of expenses, and those expenses might be your water expense.

It might be property charges, and it might be the interest on the loan that you're servicing. Uh, so $10,000 is the gross rent, $6,000 is the expense. Centrelink would assess that property to earn $4,000 a year of net rental income.

So, I guess, to draw back to the question, how does having a debt on the property impact.

the income number for Centrelink purposes, the interest is an allowable expense to come off that income amount, but it's important to note that the principal doesn't.

So, a lot of loans don't just have an interest component, but they have a principal component. Now, that principal component in that same example might be $4,000 a year. So, in real terms, your income may be $10,000 a year, your expenses, including.

the principal repayment might be $10,000 a year, so your true net income from that property might be nothing per annum, but Centrelink will still assess it to earn $4,000 a year, because they won't allow that principal payment to come off.

that income number for you. And for the asset test, I've got a million dollar rental property, I still owe half a million on the mortgage. Yep. What do they assess as the asset? Absolutely. Half a million, so $1 million is the value, the loan $500, it's the net asset value that is assessed for Centrelink purposes.

Sam, we've seen interest rate increases through the RBA?

The question is, how are other increases around the world going to pan out?

A large part of when we look at the investment environment, it is the, the actions of central banks kind of play a role in what they do with interest rates and I think it's worth stepping back of what is the key goal for central banks. They're effectively looking for full employment as well as price stability.

So, if you go back a few months at the end of 2025, we were in a position where inflation was coming down. We thought overall that central banks were going to basically lower interest rates, and we'd see them lower over time. Of course, we had some other impacts recently where some inflation shocks, higher oil prices, and so on.

And that's actually changed the view of a lot of central banks to keep inflation in check. So we see more of a hawkish tone or potential for interest rates to increase over time. But so overall, what central banks will do, we'll go back to those basics of how do we keep inflation in check and how do we make sure we have full employment.

And that's going to differ in various parts of the world. It's not just everyone goes up at the same time. Definitely, so that's where you do see some variations between countries based on their own economic status. A further question on what you were talking about then, Sam, about how we invest and make investment decisions, uh, where do you see the impact.

In US markets, and how is that going to affect other countries?

So it's interesting when you look at the, basically, the interconnectivity around the world of what's happening in the US, what's happening in Europe, what's happening in even the geopolitical tensions that we've actually seen more recently. It's a big factor in what our investment team looks at.

In terms of looking at GDP growth, looking at productivity growth, looking at labor markets, and from a macroeconomic standpoint, that's what we look at in terms of what do we think of the path ahead is for different investments, and how should we position the portfolio?

From an asset allocation point of view, how much should we put in growth assets, as well as what types of Australian shares or international shares should we buy in the portfolio? So, a key part of when we look at the… some of the volatility we've seen in the U.S. Markets, and more broadly, is we're keeping a close eye on.

GDP growth, as well as the productivity that's out there. And one thing we are seeing is because of some of the geopolitical tensions in recent times, we have seen some possibilities that global growth may slow in the coming years.

And we expect it to actually impact the US and Europe pretty heavily. It might have a lower impact to Australia because of that interconnectivity of the world, it'll impact us as well. And that's why we have investment people on the ground in London and New York to be where it's happening? Definitely, and it's a key part is we have economists that are out of our London office that are really on the ground there to.

To get that broader view of economic conditions. A question, Kris, here about contributions. I'm 73. When can I still make contributions till and does my employer still have to make contributions for me?

Yep. So, mandated contributions to super, so superannuation guarantee contributions, they continue indefinitely. So there's no age around that. So your 12%, which is the standard superannuation guarantee, it could be higher, depending on the role that you're in. That continues for as long as you continue to work.

There's other contribution types, which we've touched on in previous sessions, which relate to non-concessional and concessional type contributions. Superannuation guarantee forms part of that concessional contribution, but we're talking other types, like salary sacrifice or personal deductible contributions to super.

They are, um, they do have age-based requirements, so in essence, in order to make a personal deductible contribution to super, you have to be under the age of 75, and you also need to meet a work test to make that.

um, type of contribution. Now, the work test very simply says that you work more than 40 hours in a period of not more than 30 consecutive days. So, in order to make personal deductible contributions, you've got to be under 75, and you've got to meet a work test.

Salary sacrifice, again, can continue beyond age 75, because they're linked to employment, so they can continue. Non-concessional contributions can continue up to age 75, um, and there's no work test for non-concessional contributions.

I guess as a 73-year-old member, you've got potentially, depending on whether you're working or not working, and from the sounds of it, you're still working, you've got lots of options around the types of contributions you can still make. Or some decisions need to be made before 75. More importantly, Pete, very well put. Yes, before 75, getting some advice to make sure you really maximise the contributions available to you.

But there's another rule, and this is where superannuation people find it's tricky. There is a rule that I can put money in after 75, after the downsizer contribution. That's correct. So the downsizing contribution is important to note that that is not a concessional or non-concessional contribution. That's its own type of contribution.

So it has its own set of criteria, which is available through the ATO website. But in really simple terms, there is no age requirement on the upside, but there is on the downside, you have to be over 55 years of age to make a downsizing contribution.

So it's more capturing the younger member, not the 72, 73-year-old member who is still working. So again, it's knowing what the rules are, asking the questions, getting advice once again. Yeah, 72, 73-year-old members, lots of options.

Sam, we hear questions about AI all the time. Question here, how is AustralianSuper looking at AI from an investment point of view and also its impact worldwide? This is one of those themes that we've seen in investment markets, especially over the last 3 to 5 years. We've seen this.

large run-up of different stocks that are basically backed by artificial intelligence or AI. And so we look at it as one of the mega-themes of investing, and we liken it to the productivity booms that we've seen in the 1900s. Things like the electronics booms, the.

the rise of the personal computer, mobile phones. So, all of these basically changed the way we lived and work.

And we expect AI to be very similar to that. So what we're looking at is how does it affect productivity? How is it going to increase the profitability for different companies?

The way we're investing at it in the portfolio is different types of software companies, hardware, chips, as well as even data centers, and we're looking at those types of investments in the portfolio.

Well, the last question is from me. What is one thing that a member can do that can make them feel more confident about retirement? Sam first.

I think the main thing is that you're doing it today, the fact that you're listening to this, and you're taking the time to educate yourself is a key part. So for anything that you don't understand, take the time to research it, seek the guidance or advice that you need to make the decisions, and it'll really help you have a better retirement.

Kris? Yeah, further to what Sam says, I think… outcome comes from action. We've done a lot of talking today, and that's great, and there's education, and… but if you don't take what you've learned today and put into action, it's unlikely your outcomes are going to change. So I guess my call-out to the members out there, if you're unhappy with the outcomes you're currently getting.

I think there's a way to change that, and that's by taking action. That action might be through further education, it might be watching another webinar, it might be contacting the call center and having a brief chat. It might be requesting a, you know, a meeting with a financial planner, or going and talking to Centrelink.

I just… I would just encourage members to take what we've said today, and as I said, if they're unhappy with the outcomes they're getting, to take some action.

Thank you to everyone who asked a question, and thanks Sam and Kris, for giving us the time out of your day to answer the questions that our members have about retirement, about investment, and getting financial advice. Thanks a lot. Thanks.

So that brings us almost to the end of the event. We hope that the information presented today has you feeling more confident that you'll be able to live well in retirement.

Now, we've covered a lot of information today, so I'd like to provide a brief recap on some of the sessions.

In the Retirement Essentials sessions, Kim took us through a number of things you should know to help you calculate how much you may need in retirement.

One, retirement milestones, and what income source you get access to at each of these.

Two, how much are you spending now? Three, the lifestyle you wish to live in retirement, and 4. The average life expectancy, and how long your money may need to last.

From the How to Boost your super session, Andrew covered the different types of super contributions that you can make.

how those contributions are taxed, the contribution caps, and government incentives.

From the self-funded retiree session, we learned that even if you're self-funded and not receiving the Age Pension, it's worth checking what government or Centrelink benefits you might be eligible for.

From the easing into retirement session, we learned how you could potentially save more, or work less with a transition to retirement strategy.

In the well-being in retirement session, Mia recommended finding a retirement role model, someone who is already living the kind of retirement you would like.

or who is planning for retirement well. Someone who is proactive and intentional about goal setting and planning, building social connections, and prioritising their mental and physical health.

Having a retirement role model can inspire and motivate you.

During the Q&A with Anne Jensen, we learned that a state law has become more complex over the last few decades, and that it is important to, one, have an estate plan in place, and this is reviewed every 5 or so years.

Because your estate plan is the concluding chapter of all the wealth and relationships that you have grown and nurtured over your lifetime.

And two, use a lawyer who specialises or practices primarily in estate law.

from the who inherits your supersession, Yen took us through the specifics of who you can nominate as a beneficiary, or the designated person to receive your super should you pass away.

And what the tax implications are for each beneficiary type.

And our investment and financial experts Sam and Kris, answered a lot of your questions on a host of topics, such as investment strategies, unexpected costs, navigating market falls and timings, and how super and the Government Age Pension.

work together. If you missed any of these sessions, details and session recordings will be made available after the event.

If you feel that specific financial advice will be beneficial to you, AustralianSuper offers a wide range of advice options.

In our follow-up survey, you'll have the opportunity to request a call from the AustralianSuper team who can help you understand which option may be right for you.

If you request a call back, the AustralianSuper team will send you a text message before calling, and that phone number will have a 02 area code. Now, this process can take a few weeks.

I wish you all the best on your retirement journey, wherever you may be on it. And once again, thank you for joining us.