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Your Future Self is Begging You To Listen to This Episode (Let's Talk How Much Super You'll Really Need) · She's On The Money

• 0:00
  Speaker 1: My name is Tatasha Bamblet. I'm a proud First Nations
• 0:03
  Speaker 1: woman and I'm here to acknowledge country t Glenn Young Ganya, Niana,
• 0:08
  Speaker 1: Kaka yah y and beIN Ahaka Nian our gay In Mbina,
• 0:11
  Speaker 1: yakarum jar Dominyamiga Umagahawakaman damon Imlan Bumba bang Gadabomba in
• 0:17
  Speaker 1: and now in wakah ghana on yak rum jar Watnadaa. Hello,
• 0:22
  Speaker 1: beautiful friends, we gather on the lands of the Aboriginal people.
• 0:26
  Speaker 1: We thank acknowledge and respect the Abiginal people's land that
• 0:29
  Speaker 1: we're gathering on today. Take pleasure in all the land
• 0:32
  Speaker 1: and respect all that you see. She's on the Money
• 0:35
  Speaker 1: podcast acknowledges culture, country, community and connections, bringing you the tools,
• 0:42
  Speaker 1: knowledge and resources for you to thrive.
• 0:44
  Speaker 2: She's on the Money. She's on the Money.
• 1:07
  Speaker 3: Hello, and welcome to She's on the Money, the podcast
• 1:09
  Speaker 3: that's here to tell you whether your super is giving
• 1:11
  Speaker 3: future freedom or coasting.
• 1:13
  Speaker 2: Without a game plan yet.
• 1:15
  Speaker 3: Today's episode was inspired by our community member Fiona, who
• 1:18
  Speaker 3: slid into our Spotify comments and asked, do you have
• 1:21
  Speaker 3: an episode on the minimum super people should have for
• 1:23
  Speaker 3: their age seems to vary when you google it.
• 1:25
  Speaker 2: Great question.
• 1:27
  Speaker 3: I'm bexcited and here to help us get to the
• 1:29
  Speaker 3: bottom of this with me is the woman who is
• 1:31
  Speaker 3: always telling me that superannuation is very sexy.
• 1:34
  Speaker 2: It's just very, very very sexy. Beck, I'm yet to see. No,
• 1:38
  Speaker 2: you're not.
• 1:39
  Speaker 3: You used to work in superannuation and this is something
• 1:41
  Speaker 3: we should be genuinely, I'm so wildly passionate about this
• 1:44
  Speaker 3: right because this is what's setting us up for future
• 1:47
  Speaker 3: financial success. But it's also something that keeps coming up
• 1:51
  Speaker 3: because a lot of us in this demographic are having
• 1:54
  Speaker 3: parents that are starting to talk about retirement, that are
• 1:57
  Speaker 3: starting to talk about how much they need in supernuation
• 2:00
  Speaker 3: for a comfortable retirement. And when you start googling it,
• 2:03
  Speaker 3: the numbers are so confusing, and they start talking about, oh, well,
• 2:06
  Speaker 3: this is the average for women at this age, and
• 2:09
  Speaker 3: this is the average for men at this age. That's
• 2:11
  Speaker 3: not the average of what you need, Beck, That's just
• 2:13
  Speaker 3: the average of what people retire with. And it frustrates
• 2:16
  Speaker 3: me as an ex financial advisor because durant a little
• 2:19
  Speaker 3: bit at the start of this episode, superranuation as a
• 2:22
  Speaker 3: concept was not compulsory until nineteen ninety two. Right, So,
• 2:27
  Speaker 3: for a lot of our parents and a lot of
• 2:30
  Speaker 3: our older community members, they worked for a very long
• 2:35
  Speaker 3: time without contributing anything to supranuation. So when we get
• 2:39
  Speaker 3: numbers that say the average woman retires with X, that's
• 2:44
  Speaker 3: not taking into consideration what the average female needs. It's
• 2:47
  Speaker 3: taking into consideration just what people are retiring with on average,
• 2:51
  Speaker 3: after most of them didn't actually contribute for their entire
• 2:55
  Speaker 3: working lives.
• 2:56
  Speaker 2: Sure, so moneywin. For most of us millennials and gens.
• 3:00
  Speaker 3: We are working for our entire lives and contributing to
• 3:06
  Speaker 3: supranuation at the same time. So we are already in
• 3:09
  Speaker 3: a better position than most of our parents purely because.
• 3:12
  Speaker 2: Of our consistent contributions. Yeah, so, like that's a win.
• 3:16
  Speaker 2: But still, how much do you need? Beck, that's the question?
• 3:19
  Speaker 2: Do you need? How do you work out what do
• 3:21
  Speaker 2: you need? What's the age pension? How does that work? Like?
• 3:23
  Speaker 2: At what point would we get that?
• 3:25
  Speaker 3: Yeah? Okay, so is it like government figures or something
• 3:28
  Speaker 3: else we should be looking at.
• 3:29
  Speaker 1: Yeah?
• 3:30
  Speaker 3: So, I mean, the government does put out a lot
• 3:31
  Speaker 3: of resources, and they are very good resources if you
• 3:34
  Speaker 3: know how to use them and what to key into them.
• 3:37
  Speaker 3: But more often than not, we don't know where we're starting, right.
• 3:40
  Speaker 3: So the Association of Superbranuation Funds of Australia, which you've
• 3:43
  Speaker 3: probably never heard about nor will you ever care about,
• 3:45
  Speaker 3: but I do, or the ASFA for short, they are
• 3:49
  Speaker 3: the peak body that represents all subranuation funds in Australia
• 3:53
  Speaker 3: and every single year they release they're what they call
• 3:56
  Speaker 3: like their Superbranuation Standard, which they is Australia's benchmark guide
• 4:02
  Speaker 3: for how much you need to be able to have
• 4:06
  Speaker 3: in retirement or spend in retirement, right, and they update
• 4:10
  Speaker 3: this quarterly so you can consistently check back. So it's
• 4:13
  Speaker 3: not like outdated data that's not taking into consideration the
• 4:16
  Speaker 3: cost of living crisis or like inflation or whatever. It's
• 4:19
  Speaker 3: a very up to date and the most recent one
• 4:22
  Speaker 3: available at the time of us recording this episode BECK
• 4:25
  Speaker 3: was the one that was released in March twenty twenty five,
• 4:28
  Speaker 3: so we're going to use that data and everything is
• 4:32
  Speaker 3: in today's dollar. Right. So if we look at the
• 4:34
  Speaker 3: ASFA retirement standards, if you are a homeowner, so if
• 4:39
  Speaker 3: you already own your home and you want to have
• 4:42
  Speaker 3: what they call a comfortable lifestyle by the time you retire,
• 4:46
  Speaker 3: and today retirement age it used to be sixty five,
• 4:50
  Speaker 3: it's now classified as sixty seven. By the time you
• 4:53
  Speaker 3: reach the age of sixty seven. If you are single,
• 4:57
  Speaker 3: they recommend that you have five hundred and ninety f
• 5:00
  Speaker 3: five thousand dollars in your superannuation.
• 5:02
  Speaker 2: Okay, right, yes, If you.
• 5:04
  Speaker 3: Are in a couple, that number is six hundred and
• 5:08
  Speaker 3: ninety thousand dollars together together, okay, which is I would
• 5:13
  Speaker 3: say comforting, because like, if you are in a couple,
• 5:16
  Speaker 3: you obviously need less. And I think that that is
• 5:19
  Speaker 3: It's interesting because we'll get into it a little bit
• 5:21
  Speaker 3: further because this is what they say is a comfortable retirement.
• 5:25
  Speaker 2: But I think you and I might disagree. I think
• 5:30
  Speaker 2: it does take into account like the cost of living. Yeah,
• 5:33
  Speaker 2: it does, it does.
• 5:34
  Speaker 3: So that is based on and they say every single year,
• 5:37
  Speaker 3: a single person will spend fifty two thousand, three hundred
• 5:40
  Speaker 3: and eighty three dollars, not including mortgage because we already
• 5:44
  Speaker 3: a home owner, yes, yes, yes, and they're hoping that
• 5:46
  Speaker 3: you've paid it. And as a couple, you'll be spending
• 5:49
  Speaker 3: seventy three thousand, eight hundred and seventy five dollars and
• 5:53
  Speaker 3: that covers like they've taken into consideration for a comfortable lifestyle.
• 5:57
  Speaker 3: That means that you can pay for private health insurance,
• 6:00
  Speaker 3: you are paying for a reliable car to stay on
• 6:03
  Speaker 3: the roads.
• 6:04
  Speaker 2: You have like regular leisure activities.
• 6:06
  Speaker 3: So they're assuming that you do dine out, and you
• 6:09
  Speaker 3: do go on holidays, and you might go to the
• 6:11
  Speaker 3: local swim center every week, like water aerobics whatever. It
• 6:15
  Speaker 3: includes home maintenance and some upgrades as you might need them, sure,
• 6:19
  Speaker 3: and then digital connectivity, so like they're including things like Netflix,
• 6:23
  Speaker 3: they're including streaming services, they're including your internet.
• 6:26
  Speaker 2: So they're not delusional, if that makes sense.
• 6:29
  Speaker 3: It's not as though they're looking at this and going, oh,
• 6:31
  Speaker 3: comfortable retirement and they're still using figures based in nineteen
• 6:34
  Speaker 3: ninety five, Like that's not it, Like they genuinely do
• 6:37
  Speaker 3: look at it. But then they recommend a modest lifestyle
• 6:41
  Speaker 3: as well. So every time the ASFA release data, that
• 6:45
  Speaker 3: will release a modest lifestyle, and then like a comfortable
• 6:48
  Speaker 3: lifestyle and a comfortable lifestyle is more money than a
• 6:53
  Speaker 3: modesty modest is like I would say you can put
• 6:56
  Speaker 3: food on the table, yeah, and they say that a
• 6:58
  Speaker 3: superbalance needed it retirement for a modest lifestyle. And we
• 7:02
  Speaker 3: also need to take into consideration that the modest lifestyle
• 7:05
  Speaker 3: figures assume that you don't have lots of stuff, Like
• 7:09
  Speaker 3: you don't have a lot of assets. You also don't
• 7:11
  Speaker 3: have a lot of superannuation. And it means that they
• 7:15
  Speaker 3: assume that you are going to rely on the age pension,
• 7:18
  Speaker 3: and that age pension is going to work with your superranuation.
• 7:22
  Speaker 3: You super will kind of top it up a little
• 7:23
  Speaker 3: bit sure every single year. So they think that a
• 7:26
  Speaker 3: single or a couple will approximately have about one hundred
• 7:29
  Speaker 3: thousand dollars in super.
• 7:30
  Speaker 2: Okay, Okay, that's some more. Do I think a lot
• 7:32
  Speaker 2: of people assumed that I would come on here and
• 7:34
  Speaker 2: be like, you need one point two million dollars in
• 7:36
  Speaker 2: sobrainuation there I certainly did. Gol, if you want one
• 7:39
  Speaker 2: point two million dollars, I can help you get there.
• 7:40
  Speaker 3: I got the tools sick I can. I can teach you,
• 7:43
  Speaker 3: but like, we also want to be realistic. Yeah, So
• 7:46
  Speaker 3: that means that a single person would on average spend
• 7:50
  Speaker 3: thirty three thousand, three hundred and eighty six dollars per year,
• 7:52
  Speaker 3: and a couple would spend forty eight thousand, one hundred
• 7:55
  Speaker 3: and eighty four dollars okay, per year, and that covers
• 7:58
  Speaker 3: a lot of things. And just a quick are we
• 8:00
  Speaker 3: still talking about homeowners? So these people in the bucket
• 8:05
  Speaker 3: right now, Yeah, they've got one hundred grand in super
• 8:07
  Speaker 3: but they've also got a home paid off, so they're
• 8:09
  Speaker 3: not paying rent, they're not paying mortgage. Like the assumption
• 8:12
  Speaker 3: is that by retirement you paid off your home in full,
• 8:15
  Speaker 3: and for a lot of people that is actually the reality,
• 8:18
  Speaker 3: especially for boomers. I don't know if calling them boomers
• 8:22
  Speaker 3: is nice, but you know, for our parents' generation, Beck,
• 8:25
  Speaker 3: a lot of them haven't contributed more to superannuation. They've
• 8:29
  Speaker 3: really prioritized debt reduction. They've prioritized paying off their family home.
• 8:34
  Speaker 3: They are now completely debt free. They're ready to retire,
• 8:37
  Speaker 3: but like they don't have heaps in super sure And
• 8:40
  Speaker 3: that's okay. But what a modest retirement covers is you
• 8:44
  Speaker 3: still can afford basic private health insurance. The government really
• 8:48
  Speaker 3: prioritizes that limited leisure activities, so not so many trips,
• 8:53
  Speaker 3: but you are able to go to like the pool
• 8:54
  Speaker 3: and get a coffee out and stuff like that. Older
• 8:57
  Speaker 3: more basic car and then household goods and services. So
• 9:01
  Speaker 3: we're not paying for upgrades to the house, we're not
• 9:03
  Speaker 3: going on holidays, but like we can put a roof
• 9:05
  Speaker 3: over our head and food on the table every single week.
• 9:07
  Speaker 3: That's all you need, baby, And just to like recap,
• 9:10
  Speaker 3: there are a number of assumptions that for the modest
• 9:12
  Speaker 3: and the comfortable lifestyle, there are a number of assumptions
• 9:15
  Speaker 3: that the ASFA have made. And reminding you that those
• 9:19
  Speaker 3: retirees have paid for their house in full, completely at right,
• 9:23
  Speaker 3: no debt, no mortgage, no rent, that they retire at
• 9:27
  Speaker 3: age sixty five, and then they live to eighty five. Okay,
• 9:31
  Speaker 3: so we are living for twenty years after we sell
• 9:35
  Speaker 3: our house.
• 9:36
  Speaker 2: That's so morbid, doesn't it? Well, it does, But.
• 9:38
  Speaker 3: Then the reality of that situation is we're starting to
• 9:40
  Speaker 3: live longer. Yeah, So, like, are these predictions actually reflective
• 9:45
  Speaker 3: of what we're going to need?
• 9:45
  Speaker 2: What if I live to eighty six? See, what do
• 9:47
  Speaker 2: you do? You run out of money?
• 9:48
  Speaker 3: What if, like my icon of a grandpa, I lived
• 9:50
  Speaker 3: to ninety four or he was like literally like a
• 9:53
  Speaker 3: few days away from being ninety five.
• 9:55
  Speaker 2: Oh that's an additional ten years. Yeah, yeah, I need
• 9:58
  Speaker 2: to pay for Yeah, it's just a that's a while
• 10:00
  Speaker 2: that they're like, you'll probably DIEDT five. It's like, no,
• 10:02
  Speaker 2: I don't know a lot of people that are.
• 10:04
  Speaker 3: And there's another assumption that they will both receive part
• 10:08
  Speaker 3: of an age pension. So for the modest lifestyle it's
• 10:11
  Speaker 3: a full pension and for the comfortable lifestyle it's part
• 10:14
  Speaker 3: of an age pension. And then instead of having their
• 10:17
  Speaker 3: superannuation sit there and you might have heard me talk about,
• 10:21
  Speaker 3: you know, it's fantastic because when you invest money, Beck,
• 10:24
  Speaker 3: the money that you've invested then makes money. And in
• 10:26
  Speaker 3: a perfect world, we never spend the money that we
• 10:31
  Speaker 3: have invested. We always live off the income. Yeah, but
• 10:34
  Speaker 3: it actually assumes draw down because we don't have that
• 10:38
  Speaker 3: grace Like if you only have one hundred thousand dollars
• 10:40
  Speaker 3: in super and that's returning what five percent every year?
• 10:44
  Speaker 3: So five percent is what a financial advisor will use
• 10:48
  Speaker 3: as a draw down rule because we know that the
• 10:50
  Speaker 3: average and I'm going to go off on a tangent here,
• 10:52
  Speaker 3: I do apologize the average of the Australian share market
• 10:55
  Speaker 3: returns closer to ten percent every year, but it's not consistent, right,
• 10:59
  Speaker 3: so some years the market might be off some years,
• 11:01
  Speaker 3: the market might be an absolute bullmarket and it's having
• 11:03
  Speaker 3: a really great time. But when you're a financial advisor,
• 11:07
  Speaker 3: the advice is that you use an average rate or
• 11:10
  Speaker 3: a draw down rate of five percent, because that's quite conservative,
• 11:15
  Speaker 3: and it means that if it's a shitty year, Beck,
• 11:17
  Speaker 3: we're going to be okay, and if it's a good year,
• 11:19
  Speaker 3: there'll be some cash left over in your super for
• 11:21
  Speaker 3: the other years that aren't as good.
• 11:23
  Speaker 2: Right, So we use five percent.
• 11:25
  Speaker 3: But if you've only got one hundred thousand dollars in superannuation,
• 11:29
  Speaker 3: five percent of that bex five grand.
• 11:31
  Speaker 2: A year, you can't live off that.
• 11:33
  Speaker 3: So you have to start taking some of the actual
• 11:36
  Speaker 3: investment out so that you can live your life. And
• 11:39
  Speaker 3: so every year you start to cut into that investment,
• 11:43
  Speaker 3: and then the returns start to diminish as well. I'm
• 11:45
  Speaker 3: not saying that that's scary. That is the reality for
• 11:48
  Speaker 3: most people. I just want you to fully understand what
• 11:51
  Speaker 3: that means and why and when and where and how.
• 11:53
  Speaker 2: Okay, okay.
• 11:54
  Speaker 3: On the flip side, not all of us own property,
• 11:57
  Speaker 3: not all of our parents' own property, And the reality
• 12:00
  Speaker 3: is for a lot of people, you're going to rent
• 12:02
  Speaker 3: for life, that's fine.
• 12:04
  Speaker 2: There's literally no shame in that. We just have to
• 12:06
  Speaker 2: financially prepare for it.
• 12:07
  Speaker 3: Yeah, because if we've got rent as another overhead, like,
• 12:10
  Speaker 3: we just need to factor that in because housing is
• 12:13
  Speaker 3: a major cost. The ASFA actually publishes completely separate figures
• 12:18
  Speaker 3: for retirees who do own their homes versus retirees who
• 12:21
  Speaker 3: don't own their homes in retirement, which I think is
• 12:24
  Speaker 3: really responsible. And there's no quote comfortable lifestyle benchmark provided
• 12:31
  Speaker 3: for that because I think they well, I think they
• 12:33
  Speaker 3: realize that if you're going to be renting for life,
• 12:36
  Speaker 3: that's a significantly it's harder, like it's harder to rent
• 12:42
  Speaker 3: and put food on the table and have that income.
• 12:45
  Speaker 3: Like if you were in the comfortable bucket, maybe we
• 12:48
  Speaker 3: could get a mortgage. So all they give us is
• 12:52
  Speaker 3: the modest lifestyle for that fair enough. So a souberannuation
• 12:56
  Speaker 3: balance at the quote retirement age of sixty seven for
• 13:00
  Speaker 3: a single is three hundred and forty thousand dollars and
• 13:03
  Speaker 3: for a couple it's three hundred and eighty five thousand dollars.
• 13:06
  Speaker 3: And then for their annual spending, because they're going to
• 13:11
  Speaker 3: spend a bit more because they're renting as well. For
• 13:12
  Speaker 3: a single person, they're spending forty six thousand, six hundred
• 13:15
  Speaker 3: and sixty three dollars a year, and for a couple
• 13:18
  Speaker 3: it's sixty four thousand, two hundred and fifty nine dollars
• 13:21
  Speaker 3: a year. This just tells me that financially, being in
• 13:24
  Speaker 3: a couple makes sense. Isn't that sucky? I know? But
• 13:28
  Speaker 3: also I'm like, it's not that much different to be single,
• 13:33
  Speaker 3: and I like, I just I don't think we need
• 13:35
  Speaker 3: to be in a couple. So I'm like, this is
• 13:36
  Speaker 3: still because I'm looking at the single fore years, even
• 13:38
  Speaker 3: though I'm not single right now.
• 13:39
  Speaker 2: But I'm like, I don't want to plan for being
• 13:41
  Speaker 2: in a couple. I think this is still very doable.
• 13:44
  Speaker 3: And I say so, the extra cost assumed if you're renting,
• 13:49
  Speaker 3: if you're a single person is thirteen thousand, two hundred
• 13:52
  Speaker 3: and seventy seven dollars a year, and then they think
• 13:54
  Speaker 3: that if you're in a couple, you're probably spending slightly more,
• 13:57
  Speaker 3: and you're spending sixteen thousand and seventy five dollars on rent,
• 14:02
  Speaker 3: and the rent assumed on that is each week, And
• 14:05
  Speaker 3: I don't think this is enough personally, but each week
• 14:08
  Speaker 3: they assume that you're spending three hundred and eighty bucks
• 14:11
  Speaker 3: a week.
• 14:12
  Speaker 2: They're getting this, yeah, let me just disclaim it.
• 14:16
  Speaker 3: The I don't agree, but living sticks as a single person,
• 14:19
  Speaker 3: and then as a couple, they think you're spending four
• 14:21
  Speaker 3: hundred and fifty bucks.
• 14:22
  Speaker 2: That's how much it should be.
• 14:23
  Speaker 3: And there's I'm not going to go on our tangent,
• 14:25
  Speaker 3: but I just don't think anyone's doing about this rental
• 14:27
  Speaker 3: crisis general in I remember my rent in like twenty
• 14:32
  Speaker 3: fifteen was four hundred and fifty dollars a week, and
• 14:34
  Speaker 3: at that time that was so expensive.
• 14:37
  Speaker 2: Yes, yes I was.
• 14:38
  Speaker 3: Sharing with someone else, don't worry, but like that felt
• 14:41
  Speaker 3: like a lot at that time. And I know that
• 14:43
  Speaker 3: rent nowadays, and like it's not that I don't understand
• 14:46
  Speaker 3: the rental market. Guys at work in property, I really
• 14:48
  Speaker 3: do get it. But it just it blows my mind
• 14:51
  Speaker 3: that those are still the figures that they're using and
• 14:53
  Speaker 3: like projecting on, because if you reflect, go back and
• 14:58
  Speaker 3: they've assumed that you're like will go on the single one, right,
• 15:01
  Speaker 3: they've assumed your annual spending is forty six thousand, six
• 15:04
  Speaker 3: hundred and sixty three dollars, but of that, you're spending
• 15:07
  Speaker 3: only three hundred and eighty dollars on rent. Girl, You're
• 15:10
  Speaker 3: not going to be spending three hundred and eighty dollars
• 15:12
  Speaker 3: on rent. I would say half of that is going
• 15:14
  Speaker 3: to go on rent, and then what unless you're in
• 15:16
  Speaker 3: a sharehouse, which I can kind of understand, But.
• 15:18
  Speaker 2: Are you're going to be sixty five and you're in
• 15:19
  Speaker 2: a sharehouse? I would absolutely. I know you're much.
• 15:22
  Speaker 3: Cooler than everybody, but like I think a lot of
• 15:26
  Speaker 3: us by the time we were retiring, that's not what
• 15:28
  Speaker 3: we want. Sure, that's not what the average person wants.
• 15:31
  Speaker 3: And I know that you're probably like.
• 15:33
  Speaker 2: Oh what about like leave blah laugh, Yeah, but like
• 15:35
  Speaker 2: I love it, and you can choose that. That's fantastic,
• 15:39
  Speaker 2: But some people they're in space.
• 15:41
  Speaker 3: You deserve your own space, You deserve the financial freedom
• 15:43
  Speaker 3: that if that is what you want to choose, you
• 15:45
  Speaker 3: get that.
• 15:45
  Speaker 2: I know, isn't that crazy.
• 15:47
  Speaker 3: I remember looking for rentals with my mum when I
• 15:49
  Speaker 3: was like, I don't know, a teenager three fifty for
• 15:51
  Speaker 3: a four bedroom house.
• 15:52
  Speaker 2: Now it's like over one thousand. I'm like, I'm so sorry.
• 15:55
  Speaker 2: To single parents out there.
• 15:56
  Speaker 3: So these numbers are all in today's costs, right, And
• 15:59
  Speaker 3: I just told you about my rent back in twenty
• 16:01
  Speaker 3: fifteen being four fifty, Like, we kind of know that
• 16:04
  Speaker 3: their projection of three hundred and eighty next year, it's
• 16:06
  Speaker 3: going to be four hundred. The year after that's going
• 16:08
  Speaker 3: to be four ten, right, So we need to take
• 16:10
  Speaker 3: that into consideration as well, because these numbers from my perspective,
• 16:14
  Speaker 3: mean they're not adjusting for future inflation or like you
• 16:18
  Speaker 3: know I mentioned before, we're living longer, so like rising
• 16:20
  Speaker 3: life expectancy or even just more housing insecurity. Like this
• 16:25
  Speaker 3: is just I think, Yes, I get that they have
• 16:28
  Speaker 3: to put out their bare minimum for everybody in Australia,
• 16:31
  Speaker 3: and most of us listening to this podcast probably live
• 16:34
  Speaker 3: in a major city or regionally relatively comfortably. I would
• 16:39
  Speaker 3: say that we need to remember that a lot of
• 16:41
  Speaker 3: remote communities are piled into this as well, which is
• 16:44
  Speaker 3: why the average comes down. And so I mean, if
• 16:48
  Speaker 3: you're thirty today and you're planning to retire at the
• 16:52
  Speaker 3: retirement age of sixty seven, the five hundred and ninety
• 16:55
  Speaker 3: five thousand dollars for your comfortable lifestyle figure, I would say,
• 16:59
  Speaker 3: is a conceptual baseline, not the actual target, because we
• 17:04
  Speaker 3: need to adjust for inflation. So that's what you would
• 17:07
  Speaker 3: need beck to retire today.
• 17:09
  Speaker 2: You got you got you Okay.
• 17:12
  Speaker 3: So if you're thirty or around that and you go
• 17:16
  Speaker 3: into a super right now you're super cout and you
• 17:18
  Speaker 3: check how much you have, I guess.
• 17:20
  Speaker 2: It's hard to say, but what would that figure look like? Yeah,
• 17:24
  Speaker 2: so I have those figures.
• 17:25
  Speaker 3: So I've got superannuation balances by age and gender, and
• 17:28
  Speaker 3: we can quickly go across that. So if you are
• 17:31
  Speaker 3: between the age of eighteen to twenty four, I'm just
• 17:34
  Speaker 3: going to base it on females because the male actually
• 17:37
  Speaker 3: I'll tell you both, right, sure, So the average account
• 17:41
  Speaker 3: balance for someone between the age of eighteen to twenty
• 17:44
  Speaker 3: four is seven thousand, two hundred and ninety seven dollars
• 17:47
  Speaker 3: if they're a female, and eight thousand and sixty nine
• 17:51
  Speaker 3: dollars if you're a male. Obviously, in our community, they
• 17:54
  Speaker 3: actually sit between the ages of twenty five to thirty five,
• 17:58
  Speaker 3: and there's a bit of variance. So if you are
• 18:01
  Speaker 3: between the age of twenty five to twenty nine and
• 18:03
  Speaker 3: you're a female, the average is twenty three thousand, two
• 18:05
  Speaker 3: hundred and seventy three dollars. If you are male, it
• 18:08
  Speaker 3: is twenty five thousand, four hundred and seven dollars as
• 18:12
  Speaker 3: the average. If you are and I'm just going to
• 18:14
  Speaker 3: jump up to thirty five to thirty nine, that jumps
• 18:17
  Speaker 3: to seventy one thousand, six hundred and eighty six dollars
• 18:20
  Speaker 3: as the average female account. And then if you're male,
• 18:24
  Speaker 3: and this is where things start to slip with my
• 18:27
  Speaker 3: big genka. Absolutely, if you're a male, your average account
• 18:32
  Speaker 3: balance if you're between the age of thirty five to
• 18:34
  Speaker 3: thirty nineties ninety thousand, eight hundred and twenty two dollars.
• 18:39
  Speaker 3: If we jump back up to what retirement age is,
• 18:42
  Speaker 3: So retirement age is sixty seven in Australia, So if
• 18:46
  Speaker 3: you are between the age of sixty five and sixty nine,
• 18:50
  Speaker 3: the average account balance is three hundred and seventy nine thousand,
• 18:53
  Speaker 3: four hundred and eighty three dollars, and you go, that's
• 18:55
  Speaker 3: pretty good.
• 18:56
  Speaker 2: That's for females.
• 18:57
  Speaker 3: If you're a male between the ages seventy five and
• 18:59
  Speaker 3: sixty nine and the average is four hundred and twenty
• 19:01
  Speaker 3: eight five hundred and thirty three, that's just telling me
• 19:04
  Speaker 3: that obviously there is a gender pay gap, full stop.
• 19:07
  Speaker 2: End of story.
• 19:08
  Speaker 3: Women are retiring consistently with less superannuation than men on
• 19:12
  Speaker 3: that website. So we were talking about the ASFA before.
• 19:15
  Speaker 3: There's actually a very cool research tool called Superdetective. So
• 19:20
  Speaker 3: the Superdetective tool will let you put your age in
• 19:23
  Speaker 3: and then it will tell you how much you need
• 19:25
  Speaker 3: to have today beck to hit their comfortable retirement or
• 19:27
  Speaker 3: their modest retirement ages. Right, And I'll tell you a
• 19:31
  Speaker 3: bit after this because I'm going to get into it.
• 19:33
  Speaker 3: There's a number of different calculators you can use as
• 19:35
  Speaker 3: well that will show you where you need to be
• 19:37
  Speaker 3: and what that means. Yeah, okay, okay, so wow, it's
• 19:42
  Speaker 3: a big numbers game today. What other numbers might we see?
• 19:45
  Speaker 2: Okay? So you might have heard the rule and a
• 19:47
  Speaker 2: lot of.
• 19:48
  Speaker 3: Financial advisors use this a lot of websites, a lot
• 19:50
  Speaker 3: of blogs. They say you need to have seventy percent
• 19:54
  Speaker 3: of your income. And it's a rule that I would
• 19:57
  Speaker 3: say is one of the most commonly quoted shortcuts for
• 20:00
  Speaker 3: estimating how much money you'll need to live on in retirement.
• 20:04
  Speaker 3: But I would say that it comes with some I
• 20:06
  Speaker 3: don't know, there's just like a lot of pros and
• 20:08
  Speaker 3: cons and some pretty big assumptions that are baked into that.
• 20:10
  Speaker 2: So let's quickly have a chat about it. I suppose yes, please.
• 20:14
  Speaker 3: I've written a little bit of a pros and cons
• 20:15
  Speaker 3: list because I don't want to bore you too much,
• 20:17
  Speaker 3: because I feel like this episode is very like numbers,
• 20:19
  Speaker 3: and like he's the median and here's the aide.
• 20:22
  Speaker 2: Do you know what I mean?
• 20:22
  Speaker 3: It's just this a lot, but the pros of the
• 20:24
  Speaker 3: seventy per cent rule, it's relatively easy, Like, it's pretty quick.
• 20:28
  Speaker 3: Just calculate seventy percent of your income. You don't have
• 20:30
  Speaker 3: to pull out some spreadsheets, you don't have to crush
• 20:32
  Speaker 3: your dreams. You don't have to, you know, work out
• 20:34
  Speaker 3: what your retirement budget is and you're crunching the numbers
• 20:37
  Speaker 3: all night. It actually just gives you a rough ballpark
• 20:40
  Speaker 3: in I would say seconds, sure, money you in. We
• 20:42
  Speaker 3: love to see it, easy times money. It takes into
• 20:45
  Speaker 3: account reduced expenses so within retirement hopefully.
• 20:49
  Speaker 2: Hopefully, and we've got our fingers crossed.
• 20:51
  Speaker 3: You're not paying off a mortgage, you don't have young
• 20:53
  Speaker 3: kids to raise, you're not paying school fees, you're not
• 20:56
  Speaker 3: paying for school camp. You're not commuting daily, so we're
• 20:59
  Speaker 3: not spending lots on my key to go in and
• 21:01
  Speaker 3: out of the big smoke. You're not making big superannuation
• 21:04
  Speaker 3: contributions because you're already retired, right, So the idea is
• 21:08
  Speaker 3: that your income will shrink a bit, and that's okay.
• 21:12
  Speaker 3: And for me when I was working as a financial advisor,
• 21:15
  Speaker 3: it's a pretty healthy conversation starter. It's a pretty healthy
• 21:19
  Speaker 3: starting point, especially for people in their twenties to forties
• 21:22
  Speaker 3: who maybe haven't thought a lot about retirement but want
• 21:25
  Speaker 3: to kind of sense check. Like if I sat you
• 21:27
  Speaker 3: down and said, all right, beck, well let's talk about retirement,
• 21:28
  Speaker 3: you might go, I don't even know where to start
• 21:31
  Speaker 3: the yeah, And I go, okay, cool. Will that start
• 21:32
  Speaker 3: with the seventy percent rule? And I explained that that's
• 21:36
  Speaker 3: you know, you living off seventy percent of your income.
• 21:38
  Speaker 3: Or we can start having a conversation about how comfortable
• 21:40
  Speaker 3: you'd be, could you would you?
• 21:43
  Speaker 2: Would you want more than that?
• 21:44
  Speaker 3: But I don't know if you've got some bougie retirement plans, babe,
• 21:47
  Speaker 3: you're going to go get like a yacht off the
• 21:49
  Speaker 3: coast of France, like I don't know what your plans are. Yeah,
• 21:53
  Speaker 3: so it kind of jump starts that conversation into would
• 21:56
  Speaker 3: that be appropriate? What should we be predicting, what should
• 22:00
  Speaker 3: we be organizing? Sure, on the flip side, though, there
• 22:03
  Speaker 3: are some cons it's not very personalized, like it doesn't
• 22:06
  Speaker 3: consider whether you're going to own your own home or
• 22:08
  Speaker 3: if you're going to rent forever, or what kind of
• 22:10
  Speaker 3: retirement lifestyle. Like we're not talking about whether you're going
• 22:12
  Speaker 3: to get a yacht or if you're going to caravan
• 22:14
  Speaker 3: around Australia. Like we're not having these conversations like are
• 22:18
  Speaker 3: you a super minimalist, Are you're going to go completely
• 22:20
  Speaker 3: off gridter you're not even get a plan to need
• 22:22
  Speaker 3: money because you're growing all your own vegs, Like, I
• 22:24
  Speaker 3: don't know that's the dream, But everybody's got their own plans, right.
• 22:28
  Speaker 3: It's not very personal It doesn't talk about the age
• 22:31
  Speaker 3: pension at all, and the reality is most Australians are
• 22:37
  Speaker 3: going to need to rely on the aged pension and
• 22:41
  Speaker 3: the seventy percent rule assumes that your income is entirely
• 22:44
  Speaker 3: coming from your savings, your investments and your superannuation. So
• 22:50
  Speaker 3: I would say it might overestimate how much money you
• 22:54
  Speaker 3: need in retirement.
• 22:55
  Speaker 2: That's good unless it's daunting. Yeah, but like it could
• 22:59
  Speaker 2: be really scary.
• 23:00
  Speaker 3: Yeah, that's like you know, like hypothetically, if I was
• 23:02
  Speaker 3: helping my parents retire and they were stressed about it,
• 23:06
  Speaker 3: and I was sitting them down, and I'm like, well,
• 23:07
  Speaker 3: seventy percent rule, and then we calculate what that is
• 23:10
  Speaker 3: for how much they needed in super, that very quickly
• 23:13
  Speaker 3: becomes very overwhelming because they might not have access to that.
• 23:16
  Speaker 2: Yeah, do you know what I mean?
• 23:17
  Speaker 3: Like we're not talking about the resources and the support
• 23:20
  Speaker 3: and the age pension and how you know, the super
• 23:22
  Speaker 3: could just act as a top up as opposed to
• 23:25
  Speaker 3: the primary income. It also, high owners are relatively skewed.
• 23:29
  Speaker 3: So like, girl, if you're earning two hundred grand a
• 23:31
  Speaker 3: year right now, do you actually need one hundred and
• 23:34
  Speaker 3: forty grand a year in retirement?
• 23:37
  Speaker 2: Like probably not, No, I wouldn't think so.
• 23:40
  Speaker 3: No, you probably set yourself up, You probably paid off
• 23:42
  Speaker 3: your entire house, and like, if you are living a
• 23:44
  Speaker 3: minimalist life, you probably don't need one hundred and forty
• 23:47
  Speaker 3: thousand dollars in income. Yeah, So I would say the
• 23:50
  Speaker 3: percentage doesn't scale well across lots of different types of incomes.
• 23:55
  Speaker 2: Sure, okay, so how do we actually work out the
• 23:57
  Speaker 2: right figure for us?
• 23:58
  Speaker 3: So you probably figured out by now from this conversation
• 24:02
  Speaker 3: that we've been having that's superannuation and retirement. It's definitely
• 24:05
  Speaker 3: not like a one size fits all approach, and that's
• 24:08
  Speaker 3: why I love.
• 24:09
  Speaker 2: And I hate it. Like everyone's different, so we should
• 24:12
  Speaker 2: embrace that.
• 24:12
  Speaker 3: But also I wish I just had a rule like
• 24:14
  Speaker 3: you'll give you back, Like if I could be like,
• 24:16
  Speaker 3: oh yeah, fully get back behind the seventy percent rule
• 24:19
  Speaker 3: money ween, it works for everybody, Like how much easier
• 24:21
  Speaker 3: would that be?
• 24:22
  Speaker 2: As an episode? That would have been so much easier
• 24:25
  Speaker 2: to be done. Here's the rule, this is the number,
• 24:28
  Speaker 2: this is what you're working towards.
• 24:29
  Speaker 3: And if I could turn around and be like, okay, cool,
• 24:31
  Speaker 3: at retirement, you need this amount of money, how much
• 24:35
  Speaker 3: easier would my.
• 24:36
  Speaker 2: Life and your life be? Oh, I'll just go towards
• 24:38
  Speaker 2: that slavy.
• 24:39
  Speaker 3: So, because it's not a one size fits all approach,
• 24:42
  Speaker 3: and because we've been yapping for a while, I think
• 24:43
  Speaker 3: you and I let's take a really quick break, and
• 24:46
  Speaker 3: when we're back, I'm actually going to help you work
• 24:48
  Speaker 3: out what your magic number is and then give you
• 24:50
  Speaker 3: a game plan to actually get there. So don't go anywhere,
• 24:57
  Speaker 3: all right, V before the break, you promised to help
• 24:59
  Speaker 3: us fe about the rights of balance for our life promises,
• 25:02
  Speaker 3: not just averages.
• 25:04
  Speaker 2: That sounds like a mammoth task. So where do we begin?
• 25:08
  Speaker 3: Okay, So what we want to do is kind of
• 25:10
  Speaker 3: like you know how saying the seventy percent rule is
• 25:12
  Speaker 3: a really good rule for kick starting conversation.
• 25:15
  Speaker 2: Yes, ma'am. We want to just get clear on what
• 25:17
  Speaker 2: retirement means.
• 25:18
  Speaker 3: What's that mean for you? Like are you going off grid?
• 25:22
  Speaker 3: What would that cost? Are you growing all your own veggies?
• 25:24
  Speaker 3: What type of income would you need? On the flip side,
• 25:26
  Speaker 3: are we going to the South of France? And like
• 25:28
  Speaker 3: these are very And I use those examples because like
• 25:31
  Speaker 3: when I was a financial advisor, this is how I
• 25:32
  Speaker 3: talk to clients. So I'd be like, go, what's the plan? Yeah,
• 25:35
  Speaker 3: and then all of a sudden you go, no, I
• 25:37
  Speaker 3: don't need to go to the South of France. You'd
• 25:39
  Speaker 3: be like, okay, cool, what does retirement look like? And
• 25:42
  Speaker 3: then all of a sudden, it's much easier conversation to
• 25:44
  Speaker 3: go well, actually maybe and like maybe you're talking to
• 25:48
  Speaker 3: someone in their sixties, right, and they've just started having
• 25:51
  Speaker 3: grandchildren and they're really excited about just spending more time
• 25:55
  Speaker 3: with the grandkids. Like they're like, oh, like, hopefully I
• 25:58
  Speaker 3: can have them one day week. We'll go to the
• 26:00
  Speaker 3: cafe and like, what do holidays look like? And you know,
• 26:03
  Speaker 3: I used to talk to a lot of people would
• 26:05
  Speaker 3: be like, oh, well, I don't actually want to do
• 26:07
  Speaker 3: a whole heap of overseas stuff. Maybe they've already done that,
• 26:09
  Speaker 3: maybe they don't have an interest in it. They're like, oh,
• 26:11
  Speaker 3: maybe like trip to Queensland every year, yeap. Or on
• 26:14
  Speaker 3: the flip side, I might have sat down with a
• 26:16
  Speaker 3: retirement couple who are like, go, we have been waiting
• 26:18
  Speaker 3: for this.
• 26:19
  Speaker 2: We want to travel the world.
• 26:21
  Speaker 3: Like it's such a good conversation to have, but like,
• 26:24
  Speaker 3: right now, what are your retirement plans?
• 26:26
  Speaker 2: What could that look like?
• 26:27
  Speaker 3: And we want to price up what your lifestyle would
• 26:30
  Speaker 3: look like in today's dollars. So today, if you're retired,
• 26:33
  Speaker 3: what would that look like? What would your annual spending
• 26:36
  Speaker 3: look like? And what is kind of like a realistic
• 26:39
  Speaker 3: house cost, Like are you planning on getting a mortgage
• 26:42
  Speaker 3: and having it paid off or are you planning on renting?
• 26:44
  Speaker 2: Like, what should we be allocating? Sure, okay, okay, So
• 26:48
  Speaker 2: we have our annual spending.
• 26:50
  Speaker 3: What do we do next? We need to then take
• 26:53
  Speaker 3: that and go okay, well, on average, and like, let's
• 26:55
  Speaker 3: just pick a number out of the air. Right, on average,
• 26:58
  Speaker 3: you've decided beck that you want to spend sixty thousand
• 27:01
  Speaker 3: dollars yeap, And now I'm using that number because it's
• 27:04
  Speaker 3: higher as a single, because you said that we're going
• 27:06
  Speaker 3: to pretend to your single for a hot minute. It's
• 27:08
  Speaker 3: higher than the modest and the comfortable lifestyle based on
• 27:12
  Speaker 3: the ASFA, right, yeah, so you want to translate that
• 27:16
  Speaker 3: and you'll spend into a bull park lump sum. So
• 27:20
  Speaker 3: we want to do and we always times it by
• 27:23
  Speaker 3: twenty because that's what's going to give us a draw
• 27:27
  Speaker 3: down rate of five percent. So if you times anything
• 27:30
  Speaker 3: by twenty, you're going to get that five percent number.
• 27:32
  Speaker 3: So you let's pretend you want an income of sixty
• 27:35
  Speaker 3: thousand dollars. Bet sure, sixty thousand times twenty is going
• 27:39
  Speaker 3: to equal one point two million dollars.
• 27:43
  Speaker 2: Yeah, okay, okay, okay, And so.
• 27:45
  Speaker 3: That one point two million dollars means that every single
• 27:49
  Speaker 3: year if you had one point two And I'm not
• 27:51
  Speaker 3: trying to scare you because that's like a relatively large number.
• 27:54
  Speaker 2: But we're just like working backwards.
• 27:55
  Speaker 3: And I think a lot of us, you know, we're
• 27:57
  Speaker 3: listening to the Sheese on the Money podcast because we
• 27:59
  Speaker 3: want better for ourselves. I can almost guarantee that if
• 28:03
  Speaker 3: you are in your thirties right now, or if you're
• 28:04
  Speaker 3: in your twenties right now, and I go, how do
• 28:07
  Speaker 3: you want to retire, You're not going to say, oh,
• 28:11
  Speaker 3: I would just like a modest retirement. Most of us
• 28:14
  Speaker 3: want the financial freedom.
• 28:16
  Speaker 2: To do whatever we want there. Yeah right, yeah, So.
• 28:19
  Speaker 3: I don't want to scare you with these numbers. But
• 28:21
  Speaker 3: also these numbers are completely achievable. Right, So we'd need
• 28:26
  Speaker 3: an investment of one point two million dollars, assuming that
• 28:30
  Speaker 3: we draw down five percent each and every single year,
• 28:32
  Speaker 3: and that money doesn't remain income generating.
• 28:35
  Speaker 2: I just want to double check. Draw down means like
• 28:37
  Speaker 2: just take out take out, Okay, yep.
• 28:39
  Speaker 3: Drawdown is just taking that cash out. So every single
• 28:42
  Speaker 3: year you would take that cash out. And the reason is,
• 28:45
  Speaker 3: remember we said you retire at sixty five, yes, and
• 28:48
  Speaker 3: then we're assuming you.
• 28:49
  Speaker 2: Die at eighty five. Make sure you diet eighty five.
• 28:51
  Speaker 3: How many years have you got We've got twenty years,
• 28:54
  Speaker 3: so we times it by twenty yes, and then five percent.
• 28:56
  Speaker 2: So we're assuming assuming every year we draw down five
• 29:00
  Speaker 2: percent of that the interest earned. So if there's no
• 29:05
  Speaker 2: just have that lump some and we don't make any money.
• 29:08
  Speaker 1: Ever.
• 29:08
  Speaker 3: Again, understand we've been quite conservative here. In twenty years,
• 29:12
  Speaker 3: you will have no money left.
• 29:13
  Speaker 2: Got you, got you?
• 29:13
  Speaker 1: Got you? Okay?
• 29:15
  Speaker 3: In a perfect world, right, in a perfect world, you'd
• 29:18
  Speaker 3: have that one point two million dollars and it would
• 29:20
  Speaker 3: be invested, Yes, and we just live off the money
• 29:24
  Speaker 3: that your money made.
• 29:25
  Speaker 2: God, that would be so good.
• 29:26
  Speaker 3: Then your kids or your family, or your friends or
• 29:29
  Speaker 3: the lost dogs home when you die.
• 29:31
  Speaker 2: Gets one point two million dollars.
• 29:33
  Speaker 3: Gorgeous, sexy copli crazy not the reality for most people,
• 29:37
  Speaker 3: but like, that's a pipe dream, right, and that totally
• 29:39
  Speaker 3: completely happened.
• 29:40
  Speaker 2: Oh my god, totally.
• 29:41
  Speaker 3: So how do we work out if we have enough
• 29:43
  Speaker 3: or if we will have enough to hear this target
• 29:45
  Speaker 3: by the time we retire? So the Money Fromart website
• 29:48
  Speaker 3: is one of my favorite websites ever, like the confound
• 29:50
  Speaker 3: interest calculators my favorite go to there, right, But there
• 29:54
  Speaker 3: are another two calculators that don't talk about enough on
• 29:57
  Speaker 3: this podcast, on that money Smart website that you you
• 30:00
  Speaker 3: can use to see how you're tracking. So the first
• 30:02
  Speaker 3: one is their superanuation calculator. What you're going to do
• 30:06
  Speaker 3: is honestly type in money Smart Superanuation calculator and it
• 30:09
  Speaker 3: will come up as the first Google search result.
• 30:11
  Speaker 2: You're going to click that.
• 30:12
  Speaker 3: Then you're going to put in how old you are,
• 30:14
  Speaker 3: what your salary is, what your current supernuation balance is,
• 30:17
  Speaker 3: like how much you're contributing, and your risk. So we
• 30:22
  Speaker 3: want to understand a risk, are your conservative your growth investor?
• 30:25
  Speaker 3: Are your high growth investor? And then it will show
• 30:28
  Speaker 3: you your projected balance at retirement in today's dollars.
• 30:32
  Speaker 2: Scary. I don't know, I'm scared of that for a reason.
• 30:34
  Speaker 3: But like how Good's clarity, Yeah, that's so true, because
• 30:37
  Speaker 3: do you know what when you're younger, Like, let's pretend
• 30:39
  Speaker 3: you're thirty and you're like listening to this episode, very
• 30:42
  Speaker 3: small tweaks today had very big incacs when it comes
• 30:45
  Speaker 3: to retiring. It could mean you go, oh shit, I'm
• 30:49
  Speaker 3: going to just talk to my employer and put in
• 30:51
  Speaker 3: an extra two hundred bucks a month. I'm never going
• 30:54
  Speaker 3: to have to think about retirement again because I'm set.
• 30:57
  Speaker 3: But the same thing is not true. If you're seeing
• 31:00
  Speaker 3: and thinking about retirement and using that calculator, you can't
• 31:03
  Speaker 3: just add two hundred bucks and hope it's going to
• 31:04
  Speaker 3: be good. Yeah, we have so much power when we
• 31:07
  Speaker 3: are young, Beck, because we have time on our side,
• 31:09
  Speaker 3: and from little things, big things grow. Now, the second
• 31:13
  Speaker 3: money Smart calculator is their retirement plan a calculator. Stick
• 31:17
  Speaker 3: in to Google Money Smart Retirement Plan a Calculator. I
• 31:22
  Speaker 3: love this one because it's a little bit more comprehensive,
• 31:25
  Speaker 3: takes a little bit longer, but I promise you're going
• 31:28
  Speaker 3: to want to do it. It's going to ask you
• 31:31
  Speaker 3: some similar questions to the first one. But you can
• 31:34
  Speaker 3: also include your partner if you have one plus in
• 31:37
  Speaker 3: the advanced settings. And we do want to play with
• 31:39
  Speaker 3: the advanced settings, because like, we're not here to mess around,
• 31:42
  Speaker 3: we're here to create a retirement plan, Beck, you can
• 31:45
  Speaker 3: play around with things like your age that you want
• 31:47
  Speaker 3: to you know, last too, so maybe you're like, oh
• 31:49
  Speaker 3: my god, like Victoria told me that most of this,
• 31:53
  Speaker 3: like ASFA data assumes that I retire at sixty five
• 31:57
  Speaker 3: and die at eighty five. Go, You're going to look
• 31:59
  Speaker 3: at your nan who's one hundred and one, Like maybe
• 32:02
  Speaker 3: you have a higher life expectancy in your family and
• 32:05
  Speaker 3: this can be a morbid conversation, but I'm sorry, you're
• 32:07
  Speaker 3: gonna need a plan for a few.
• 32:08
  Speaker 2: More years than eighty five.
• 32:10
  Speaker 3: Yeah, but you can fiddle with that number like the
• 32:13
  Speaker 3: age you want it to last you, and it will
• 32:14
  Speaker 3: show you what your yearly income would be from your
• 32:17
  Speaker 3: superranuation combined with your partner if you have one, And
• 32:20
  Speaker 3: you can also select if you want it to include
• 32:23
  Speaker 3: the age pension or not, which I think is really
• 32:25
  Speaker 3: empowering true because remember before you and I just said
• 32:28
  Speaker 3: you wanted a sixty thousand dollar income in retirement. Yeah,
• 32:32
  Speaker 3: that's where the seventy percent rule starts to fall down,
• 32:36
  Speaker 3: because we didn't talk about the age pension at all.
• 32:38
  Speaker 3: We just said you needed one point two million dollars
• 32:40
  Speaker 3: in superranuation to achieve that lifestyle.
• 32:42
  Speaker 2: Back, does everyone get the age pension?
• 32:44
  Speaker 1: No?
• 32:44
  Speaker 3: No, it's asset based, Okay, So you can get the
• 32:48
  Speaker 3: age pension if you own your own home because your
• 32:50
  Speaker 3: family home is not considered or taken into consideration when
• 32:55
  Speaker 3: accessing the age pension. But they do consider youre and
• 32:59
  Speaker 3: there's like I believe it's around four hundred thousand dollars
• 33:02
  Speaker 3: before it starts to come into play, but other assets,
• 33:05
  Speaker 3: so they'll look at your superannuation, they'll look at it,
• 33:08
  Speaker 3: your investment properties, they'll look at your cars, your boats,
• 33:11
  Speaker 3: you're literally everything that you own. And if you own
• 33:14
  Speaker 3: over a certain amount of assets, then it starts to
• 33:18
  Speaker 3: impact how much of the age pension you get.
• 33:20
  Speaker 2: It's not a cutoff and they say you have more
• 33:22
  Speaker 2: than that, you get none.
• 33:23
  Speaker 3: It starts to cut down how much age pension you
• 33:26
  Speaker 3: get until basically it says, okay, well you don't qualify
• 33:28
  Speaker 3: for any of it, okay, and this calculator will tell
• 33:32
  Speaker 3: you based on the assets you're planning on owning at retirement,
• 33:36
  Speaker 3: not including your family home, which is a little bit sneaky, right,
• 33:40
  Speaker 3: because if your family home is worth five million dollars, yeah,
• 33:44
  Speaker 3: that's fine because.
• 33:45
  Speaker 2: Your family home's not not taken into consideration.
• 33:48
  Speaker 3: True, there's parts that I really like, I agree with
• 33:51
  Speaker 3: because it like, okay, well we all need to rip
• 33:53
  Speaker 3: of our heads. But yeah, I suppose you could move
• 33:55
  Speaker 3: into your most expensive one yep. Are Okay, Yeah, there's
• 33:59
  Speaker 3: just there's a few things that make sense and don't
• 34:02
  Speaker 3: make sense. But ideally the plan with the age pension
• 34:06
  Speaker 3: is that it works out for the average Australian.
• 34:08
  Speaker 2: So yeah, you can stick that in and.
• 34:10
  Speaker 3: It will show your annual income that is necessary in
• 34:12
  Speaker 3: today's dollars, and I think that that's really powerful. It's
• 34:15
  Speaker 3: also a really great tool if you're helping your parents,
• 34:18
  Speaker 3: if they are, you know, going through overtirement at the moment,
• 34:21
  Speaker 3: or trying to calculate it out, or they've got some
• 34:23
  Speaker 3: questions or queries, it's a great resource to go to.
• 34:26
  Speaker 2: Okay, And so we're going to either see if we're
• 34:30
  Speaker 2: on track or on target or not.
• 34:33
  Speaker 3: And that's where we want to compare our projection to
• 34:37
  Speaker 3: the target, like are we on track? Do like we
• 34:40
  Speaker 3: need to do a schedule or review. Is there a
• 34:42
  Speaker 3: little bit of a gap? What does that look like?
• 34:44
  Speaker 3: If so, how are we going to make that up?
• 34:46
  Speaker 3: Have we taken some If you're a female, very likely
• 34:48
  Speaker 3: you've taken some time out of the workforce. Do we
• 34:51
  Speaker 3: need to top up our superannuation? Like do you maybe
• 34:55
  Speaker 3: want to save for a house and you haven't really
• 34:57
  Speaker 3: thought about that before. But you're like, oh, maybe I do. Actually,
• 35:00
  Speaker 3: we want to own a home by the time I retire.
• 35:03
  Speaker 3: It's like kickstart these conversations. Doesn't mean you need to
• 35:06
  Speaker 3: Renting for life is a very valid strategy, but it's
• 35:09
  Speaker 3: a strategy that needs a plan still. Yeah, so it's
• 35:12
  Speaker 3: not a oh I didn't think about it and I
• 35:15
  Speaker 3: ended up renting for life. We still need a plan.
• 35:17
  Speaker 3: We are making a financial plan irrespective of what our
• 35:21
  Speaker 3: goals are, whether you want to own a home or not.
• 35:24
  Speaker 3: And I think knowing this now to me is so
• 35:29
  Speaker 3: empowering because time is on your side. Most people in
• 35:32
  Speaker 3: our community sit between the age of twenty five and
• 35:35
  Speaker 3: thirty four. Go go look at your superinuation and make
• 35:40
  Speaker 3: small tweaks now so that we're not having big problems
• 35:43
  Speaker 3: down the track.
• 35:43
  Speaker 2: Yep, yepkay.
• 35:45
  Speaker 3: There are heaps of options as well. There are lots
• 35:47
  Speaker 3: of quick wins. You can log into your supranuation accounts.
• 35:50
  Speaker 3: You can go to your MiG of account and consolidate
• 35:52
  Speaker 3: your multiple subrounuation accounts. If you've got them, you're going
• 35:55
  Speaker 3: to save heaps of money on fees you could look
• 35:57
  Speaker 3: at the fees of your fund and do a little
• 35:59
  Speaker 3: bit of comparison. You can look at the performance of
• 36:03
  Speaker 3: your fund and pick one that's aligned to your values.
• 36:05
  Speaker 2: I would make sure that you're doing a.
• 36:07
  Speaker 3: Risk profile and actually understanding well, am I actually a
• 36:10
  Speaker 3: balanced super fund member?
• 36:11
  Speaker 2: Or am I a bit of a high growth baddie?
• 36:14
  Speaker 2: Like what does that look like?
• 36:16
  Speaker 3: And then you know, maybe let's say you're behind, well,
• 36:20
  Speaker 3: you could boost your salary sacrifice.
• 36:22
  Speaker 2: Girl, that's pre tax like money win.
• 36:25
  Speaker 3: You can play around with the calculators I mentioned earlier
• 36:28
  Speaker 3: to see what impacts additional contributions might be able to have.
• 36:33
  Speaker 3: You could make a plan to invest outside of superannuations.
• 36:36
  Speaker 3: So you've got another nest egg, We've got double You
• 36:39
  Speaker 3: could look at additional income streams that you could add
• 36:42
  Speaker 3: in retirement, like totally, what else are we going to plan?
• 36:46
  Speaker 2: There's just so many things we could plan. And when
• 36:48
  Speaker 2: you have time on your side, we've got so much,
• 36:50
  Speaker 2: so much.
• 36:50
  Speaker 3: And I just based on when I worked at superannuation
• 36:54
  Speaker 3: company two different ones. They always have their own like
• 36:57
  Speaker 3: financial advice, like general financial advice for free.
• 37:00
  Speaker 2: You can just call up and say, hey, I want to.
• 37:01
  Speaker 3: Talk to someone about if you don't understand risk profiles
• 37:04
  Speaker 3: and all that kind of one hundred superannuation company, if
• 37:07
  Speaker 3: you just call them and have a chat, they will absolutely.
• 37:10
  Speaker 2: Help you and talk you through it. So and they
• 37:11
  Speaker 2: love that. Please call them already you love it. You're
• 37:14
  Speaker 2: literally paying them with your super fees.
• 37:16
  Speaker 3: Yes, And if you call up and I just I
• 37:17
  Speaker 3: remember this from one particular place, I'm sure it's in
• 37:19
  Speaker 3: a lot of different superannuation companies. If you say I
• 37:22
  Speaker 3: would like general advice, and they put you through the
• 37:24
  Speaker 3: general advice team, the person who answered your.
• 37:26
  Speaker 2: Call gets some sort of voters. I remember we got
• 37:28
  Speaker 2: like a gig guys. Yeah, they do so super fun.
• 37:31
  Speaker 2: You've everyone a bonus, you've ever had a bonus? Get
• 37:33
  Speaker 2: free advice? God win win. Okay, so this episode was
• 37:37
  Speaker 2: very numbers heavy.
• 37:38
  Speaker 3: It was quite numbers heavy, and I am sorry. And
• 37:41
  Speaker 3: we'll probably do an Instagram post at the same time
• 37:43
  Speaker 3: as this goes out, So go check our feed because
• 37:46
  Speaker 3: all of those numbers and stats and stuff will probably
• 37:48
  Speaker 3: be on a carousel post for you if you want
• 37:50
  Speaker 3: more information. They will all be on the ASFA website,
• 37:53
  Speaker 3: which we will link in the show notes. And I
• 37:55
  Speaker 3: will also make sure that all the calculators that we
• 37:58
  Speaker 3: have mentioned are also linked in the show notes for you.
• 38:01
  Speaker 2: God, she's good. God she's good.
• 38:02
  Speaker 3: I feel empowered. Dare I say, oh, hey, yeah, so
• 38:07
  Speaker 3: I think this is a great place to leave it.
• 38:09
  Speaker 3: I do as well, and I'm glad that you feel
• 38:11
  Speaker 3: empowered as you should you.
• 38:13
  Speaker 2: Queen.
• 38:13
  Speaker 3: Look, super might not be the most exciting thing in
• 38:17
  Speaker 3: the entire world, or even something that's on your radar,
• 38:20
  Speaker 3: but like, congrats, queen, if you got through this entire
• 38:22
  Speaker 3: episode and you're listening to me saying this, like you
• 38:24
  Speaker 3: have done something for future you already. But it is
• 38:28
  Speaker 3: the quiet achiever. It is going to fund your bottomless
• 38:31
  Speaker 3: brunches when you're seventy. If you want to be that
• 38:34
  Speaker 3: seventy year old who you go wonder what she did
• 38:37
  Speaker 3: in the past life to be able to drink him
• 38:39
  Speaker 3: in Mosa at ten am, that's who I plan on being.
• 38:42
  Speaker 2: Oh yeah, I want people to question what I did
• 38:44
  Speaker 2: with my life to end up.
• 38:45
  Speaker 3: In the brunch location at ten am, drinking him in
• 38:48
  Speaker 3: Mosa And I guess that's the kind of long game
• 38:51
  Speaker 3: that we're all here for. And if you haven't already,
• 38:53
  Speaker 3: please hit follow tap subscribe, do all the things, because
• 38:58
  Speaker 3: we've got plenty more episodes coming.
• 39:00
  Speaker 2: Are genuinely going to put future you in the best
• 39:02
  Speaker 2: possible financial position. We'll see you guys on Friday.
• 39:06
  Speaker 1: Bye did buy.
• 39:13
  Speaker 3: Shared on She's on the Money is general in nature
• 39:16
  Speaker 3: and does not consider.
• 39:17
  Speaker 2: Your individual circumstances.
• 39:19
  Speaker 3: She's on the Money exists fully for educational purposes and
• 39:22
  Speaker 3: should not be relied upon to make an investment or
• 39:25
  Speaker 3: financial decision. If you do choose to buy a financial product,
• 39:28
  Speaker 3: read the PDS TMD and obtain appropriate financial advice tailored
• 39:32
  Speaker 3: towards your needs. Victoria Divine and She's on the Money
• 39:36
  Speaker 3: are authorized representatives of Money Shopper Pty Ltd.
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  Speaker 2: A b N three two one IS six four nine
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