Trying to figure out how much super you actually need? Yep, it’s confusing. With all the numbers, charts, and retirement buzzwords flying around, it’s no wonder most of us throw it in the “deal with it later” pile. But future you? They’re going to be so glad you tuned in.
This week, Victoria’s giving you the real talk on super: why comparing your super to everyone else’s might leave you short, how to figure out your own retirement number and what to do if you’re feeling a little (or a lot) behind. This episode is all about ditching the overwhelm and making you feel empowered by your super.
In this ep you’ll find:
💸 The average super balances everyone’s curious about
💸 What the “ASFA comfortable retirement” number is... and if we’re buying it
💸 How much super you'll actually need for the retirement lifestyle you want
💸 A stack of free tools that do the hard maths for you
💸 The easiest way to check if you’re on track
💸 Tiny super habits that can have a serious impact on your balance
RESOURCE LINKS:
Super Detective: Calculates the super balance the ASFA says you should have today, based on their numbers for a comfortable retirement.
Money Smart's Super Calculator: Calculates your super balance at retirement.
Money Smart's Retirement Planner: Calculates your yearly retirement income, including any super you could be eligible for.
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And follow us on Instagram for Q&As, bite-sized tips, daily money inspo... and relatable money memes that just get you.
Acknowledgement of Country By Nartarsha Bamblett aka Queen Acknowledgements.
The advice shared on She's On The Money is general in nature and does not consider your individual circumstances. She's On The Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. If you do choose to buy a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards your needs. Victoria Devine and She's On The Money are authorised representatives of Money Sherpa PTY LTD ABN - 321649 27708, AFSL - 451289.
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
My name is Tatasha Bamblet. I'm a proud First Nations
woman and I'm here to acknowledge country t Glenn Young Ganya, Niana,
Kaka yah y and beIN Ahaka Nian our gay In Mbina,
yakarum jar Dominyamiga Umagahawakaman damon Imlan Bumba bang Gadabomba in
and now in wakah ghana on yak rum jar Watnadaa. Hello,
(00:22):
beautiful friends, we gather on the lands of the Aboriginal people.
We thank acknowledge and respect the Abiginal people's land that
we're gathering on today. Take pleasure in all the land
and respect all that you see. She's on the Money
podcast acknowledges culture, country, community and connections, bringing you the tools,
knowledge and resources for you to thrive.
Speaker 2 (00:44):
She's on the Money. She's on the Money.
Speaker 3 (01:07):
Hello, and welcome to She's on the Money, the podcast
that's here to tell you whether your super is giving
future freedom or coasting.
Speaker 2 (01:13):
Without a game plan yet.
Speaker 3 (01:15):
Today's episode was inspired by our community member Fiona, who
slid into our Spotify comments and asked, do you have
an episode on the minimum super people should have for
their age seems to vary when you google it.
Speaker 2 (01:25):
Great question.
Speaker 3 (01:27):
I'm bexcited and here to help us get to the
bottom of this with me is the woman who is
always telling me that superannuation is very sexy.
Speaker 2 (01:34):
It's just very, very very sexy. Beck, I'm yet to see. No,
you're not.
Speaker 3 (01:39):
You used to work in superannuation and this is something
we should be genuinely, I'm so wildly passionate about this
right because this is what's setting us up for future
financial success. But it's also something that keeps coming up
because a lot of us in this demographic are having
parents that are starting to talk about retirement, that are
starting to talk about how much they need in supernuation
(02:00):
for a comfortable retirement. And when you start googling it,
the numbers are so confusing, and they start talking about, oh, well,
this is the average for women at this age, and
this is the average for men at this age. That's
not the average of what you need, Beck, That's just
the average of what people retire with. And it frustrates
me as an ex financial advisor because durant a little
bit at the start of this episode, superranuation as a
(02:22):
concept was not compulsory until nineteen ninety two. Right, So,
for a lot of our parents and a lot of
our older community members, they worked for a very long
time without contributing anything to supranuation. So when we get
numbers that say the average woman retires with X, that's
(02:44):
not taking into consideration what the average female needs. It's
taking into consideration just what people are retiring with on average,
after most of them didn't actually contribute for their entire
working lives.
Speaker 2 (02:56):
Sure, so moneywin. For most of us millennials and gens.
Speaker 3 (03:00):
We are working for our entire lives and contributing to
supranuation at the same time. So we are already in
a better position than most of our parents purely because.
Speaker 2 (03:12):
Of our consistent contributions. Yeah, so, like that's a win.
But still, how much do you need? Beck, that's the question?
Do you need? How do you work out what do
you need? What's the age pension? How does that work? Like?
At what point would we get that?
Speaker 3 (03:25):
Yeah? Okay, so is it like government figures or something
else we should be looking at.
Speaker 1 (03:29):
Yeah?
Speaker 3 (03:30):
So, I mean, the government does put out a lot
of resources, and they are very good resources if you
know how to use them and what to key into them.
But more often than not, we don't know where we're starting, right.
So the Association of Superbranuation Funds of Australia, which you've
probably never heard about nor will you ever care about,
but I do, or the ASFA for short, they are
the peak body that represents all subranuation funds in Australia
(03:53):
and every single year they release they're what they call
like their Superbranuation Standard, which they is Australia's benchmark guide
for how much you need to be able to have
in retirement or spend in retirement, right, and they update
this quarterly so you can consistently check back. So it's
not like outdated data that's not taking into consideration the
(04:16):
cost of living crisis or like inflation or whatever. It's
a very up to date and the most recent one
available at the time of us recording this episode BECK
was the one that was released in March twenty twenty five,
so we're going to use that data and everything is
in today's dollar. Right. So if we look at the
ASFA retirement standards, if you are a homeowner, so if
(04:39):
you already own your home and you want to have
what they call a comfortable lifestyle by the time you retire,
and today retirement age it used to be sixty five,
it's now classified as sixty seven. By the time you
reach the age of sixty seven. If you are single,
they recommend that you have five hundred and ninety f
(05:00):
five thousand dollars in your superannuation.
Speaker 2 (05:02):
Okay, right, yes, If you.
Speaker 3 (05:04):
Are in a couple, that number is six hundred and
ninety thousand dollars together together, okay, which is I would
say comforting, because like, if you are in a couple,
you obviously need less. And I think that that is
It's interesting because we'll get into it a little bit
further because this is what they say is a comfortable retirement.
Speaker 2 (05:25):
But I think you and I might disagree. I think
it does take into account like the cost of living. Yeah,
it does, it does.
Speaker 3 (05:34):
So that is based on and they say every single year,
a single person will spend fifty two thousand, three hundred
and eighty three dollars, not including mortgage because we already
a home owner, yes, yes, yes, and they're hoping that
you've paid it. And as a couple, you'll be spending
seventy three thousand, eight hundred and seventy five dollars and
that covers like they've taken into consideration for a comfortable lifestyle.
(05:57):
That means that you can pay for private health insurance,
you are paying for a reliable car to stay on
the roads.
Speaker 2 (06:04):
You have like regular leisure activities.
Speaker 3 (06:06):
So they're assuming that you do dine out, and you
do go on holidays, and you might go to the
local swim center every week, like water aerobics whatever. It
includes home maintenance and some upgrades as you might need them, sure,
and then digital connectivity, so like they're including things like Netflix,
they're including streaming services, they're including your internet.
Speaker 2 (06:26):
So they're not delusional, if that makes sense.
Speaker 3 (06:29):
It's not as though they're looking at this and going, oh,
comfortable retirement and they're still using figures based in nineteen
ninety five, Like that's not it, Like they genuinely do
look at it. But then they recommend a modest lifestyle
as well. So every time the ASFA release data, that
will release a modest lifestyle, and then like a comfortable
lifestyle and a comfortable lifestyle is more money than a
(06:53):
modesty modest is like I would say you can put
food on the table, yeah, and they say that a
superbalance needed it retirement for a modest lifestyle. And we
also need to take into consideration that the modest lifestyle
figures assume that you don't have lots of stuff, Like
you don't have a lot of assets. You also don't
have a lot of superannuation. And it means that they
(07:15):
assume that you are going to rely on the age pension,
and that age pension is going to work with your superranuation.
You super will kind of top it up a little
bit sure every single year. So they think that a
single or a couple will approximately have about one hundred
thousand dollars in super.
Speaker 2 (07:30):
Okay, Okay, that's some more. Do I think a lot
of people assumed that I would come on here and
be like, you need one point two million dollars in
sobrainuation there I certainly did. Gol, if you want one
point two million dollars, I can help you get there.
Speaker 3 (07:40):
I got the tools sick I can. I can teach you,
but like, we also want to be realistic. Yeah, So
that means that a single person would on average spend
thirty three thousand, three hundred and eighty six dollars per year,
and a couple would spend forty eight thousand, one hundred
and eighty four dollars okay, per year, and that covers
a lot of things. And just a quick are we
still talking about homeowners? So these people in the bucket
(08:05):
right now, Yeah, they've got one hundred grand in super
but they've also got a home paid off, so they're
not paying rent, they're not paying mortgage. Like the assumption
is that by retirement you paid off your home in full,
and for a lot of people that is actually the reality,
especially for boomers. I don't know if calling them boomers
is nice, but you know, for our parents' generation, Beck,
(08:25):
a lot of them haven't contributed more to superannuation. They've
really prioritized debt reduction. They've prioritized paying off their family home.
They are now completely debt free. They're ready to retire,
but like they don't have heaps in super sure And
that's okay. But what a modest retirement covers is you
still can afford basic private health insurance. The government really
(08:48):
prioritizes that limited leisure activities, so not so many trips,
but you are able to go to like the pool
and get a coffee out and stuff like that. Older
more basic car and then household goods and services. So
we're not paying for upgrades to the house, we're not
going on holidays, but like we can put a roof
over our head and food on the table every single week.
That's all you need, baby, And just to like recap,
(09:10):
there are a number of assumptions that for the modest
and the comfortable lifestyle, there are a number of assumptions
that the ASFA have made. And reminding you that those
retirees have paid for their house in full, completely at right,
no debt, no mortgage, no rent, that they retire at
age sixty five, and then they live to eighty five. Okay,
(09:31):
so we are living for twenty years after we sell
our house.
Speaker 2 (09:36):
That's so morbid, doesn't it? Well, it does, But.
Speaker 3 (09:38):
Then the reality of that situation is we're starting to
live longer. Yeah, So, like, are these predictions actually reflective
of what we're going to need?
Speaker 2 (09:45):
What if I live to eighty six? See, what do
you do? You run out of money?
Speaker 3 (09:48):
What if, like my icon of a grandpa, I lived
to ninety four or he was like literally like a
few days away from being ninety five.
Speaker 2 (09:55):
Oh that's an additional ten years. Yeah, yeah, I need
to pay for Yeah, it's just a that's a while
that they're like, you'll probably DIEDT five. It's like, no,
I don't know a lot of people that are.
Speaker 3 (10:04):
And there's another assumption that they will both receive part
of an age pension. So for the modest lifestyle it's
a full pension and for the comfortable lifestyle it's part
of an age pension. And then instead of having their
superannuation sit there and you might have heard me talk about,
you know, it's fantastic because when you invest money, Beck,
the money that you've invested then makes money. And in
(10:26):
a perfect world, we never spend the money that we
have invested. We always live off the income. Yeah, but
it actually assumes draw down because we don't have that
grace Like if you only have one hundred thousand dollars
in super and that's returning what five percent every year?
So five percent is what a financial advisor will use
(10:48):
as a draw down rule because we know that the
average and I'm going to go off on a tangent here,
I do apologize the average of the Australian share market
returns closer to ten percent every year, but it's not consistent, right,
so some years the market might be off some years,
the market might be an absolute bullmarket and it's having
a really great time. But when you're a financial advisor,
the advice is that you use an average rate or
(11:10):
a draw down rate of five percent, because that's quite conservative,
and it means that if it's a shitty year, Beck,
we're going to be okay, and if it's a good year,
there'll be some cash left over in your super for
the other years that aren't as good.
Speaker 2 (11:23):
Right, So we use five percent.
Speaker 3 (11:25):
But if you've only got one hundred thousand dollars in superannuation,
five percent of that bex five grand.
Speaker 2 (11:31):
A year, you can't live off that.
Speaker 3 (11:33):
So you have to start taking some of the actual
investment out so that you can live your life. And
so every year you start to cut into that investment,
and then the returns start to diminish as well. I'm
not saying that that's scary. That is the reality for
most people. I just want you to fully understand what
that means and why and when and where and how.
Speaker 2 (11:53):
Okay, okay.
Speaker 3 (11:54):
On the flip side, not all of us own property,
not all of our parents' own property, And the reality
is for a lot of people, you're going to rent
for life, that's fine.
Speaker 2 (12:04):
There's literally no shame in that. We just have to
financially prepare for it.
Speaker 3 (12:07):
Yeah, because if we've got rent as another overhead, like,
we just need to factor that in because housing is
a major cost. The ASFA actually publishes completely separate figures
for retirees who do own their homes versus retirees who
don't own their homes in retirement, which I think is
really responsible. And there's no quote comfortable lifestyle benchmark provided
(12:31):
for that because I think they well, I think they
realize that if you're going to be renting for life,
that's a significantly it's harder, like it's harder to rent
and put food on the table and have that income.
Like if you were in the comfortable bucket, maybe we
could get a mortgage. So all they give us is
(12:52):
the modest lifestyle for that fair enough. So a souberannuation
balance at the quote retirement age of sixty seven for
a single is three hundred and forty thousand dollars and
for a couple it's three hundred and eighty five thousand dollars.
And then for their annual spending, because they're going to
spend a bit more because they're renting as well. For
(13:12):
a single person, they're spending forty six thousand, six hundred
and sixty three dollars a year, and for a couple
it's sixty four thousand, two hundred and fifty nine dollars
a year. This just tells me that financially, being in
a couple makes sense. Isn't that sucky? I know? But
also I'm like, it's not that much different to be single,
(13:33):
and I like, I just I don't think we need
to be in a couple. So I'm like, this is
still because I'm looking at the single fore years, even
though I'm not single right now.
Speaker 2 (13:39):
But I'm like, I don't want to plan for being
in a couple. I think this is still very doable.
Speaker 3 (13:44):
And I say so, the extra cost assumed if you're renting,
if you're a single person is thirteen thousand, two hundred
and seventy seven dollars a year, and then they think
that if you're in a couple, you're probably spending slightly more,
and you're spending sixteen thousand and seventy five dollars on rent,
and the rent assumed on that is each week, And
(14:05):
I don't think this is enough personally, but each week
they assume that you're spending three hundred and eighty bucks
a week.
Speaker 2 (14:12):
They're getting this, yeah, let me just disclaim it.
Speaker 3 (14:16):
The I don't agree, but living sticks as a single person,
and then as a couple, they think you're spending four
hundred and fifty bucks.
Speaker 2 (14:22):
That's how much it should be.
Speaker 3 (14:23):
And there's I'm not going to go on our tangent,
but I just don't think anyone's doing about this rental
crisis general in I remember my rent in like twenty
fifteen was four hundred and fifty dollars a week, and
at that time that was so expensive.
Speaker 2 (14:37):
Yes, yes I was.
Speaker 3 (14:38):
Sharing with someone else, don't worry, but like that felt
like a lot at that time. And I know that
rent nowadays, and like it's not that I don't understand
the rental market. Guys at work in property, I really
do get it. But it just it blows my mind
that those are still the figures that they're using and
like projecting on, because if you reflect, go back and
they've assumed that you're like will go on the single one, right,
(15:01):
they've assumed your annual spending is forty six thousand, six
hundred and sixty three dollars, but of that, you're spending
only three hundred and eighty dollars on rent. Girl, You're
not going to be spending three hundred and eighty dollars
on rent. I would say half of that is going
to go on rent, and then what unless you're in
a sharehouse, which I can kind of understand, But.
Speaker 2 (15:18):
Are you're going to be sixty five and you're in
a sharehouse? I would absolutely. I know you're much.
Speaker 3 (15:22):
Cooler than everybody, but like I think a lot of
us by the time we were retiring, that's not what
we want. Sure, that's not what the average person wants.
And I know that you're probably like.
Speaker 2 (15:33):
Oh what about like leave blah laugh, Yeah, but like
I love it, and you can choose that. That's fantastic,
But some people they're in space.
Speaker 3 (15:41):
You deserve your own space, You deserve the financial freedom
that if that is what you want to choose, you
get that.
Speaker 2 (15:45):
I know, isn't that crazy.
Speaker 3 (15:47):
I remember looking for rentals with my mum when I
was like, I don't know, a teenager three fifty for
a four bedroom house.
Speaker 2 (15:52):
Now it's like over one thousand. I'm like, I'm so sorry.
To single parents out there.
Speaker 3 (15:56):
So these numbers are all in today's costs, right, And
I just told you about my rent back in twenty
fifteen being four fifty, Like, we kind of know that
their projection of three hundred and eighty next year, it's
going to be four hundred. The year after that's going
to be four ten, right, So we need to take
that into consideration as well, because these numbers from my perspective,
mean they're not adjusting for future inflation or like you
(16:18):
know I mentioned before, we're living longer, so like rising
life expectancy or even just more housing insecurity. Like this
is just I think, Yes, I get that they have
to put out their bare minimum for everybody in Australia,
and most of us listening to this podcast probably live
in a major city or regionally relatively comfortably. I would
(16:39):
say that we need to remember that a lot of
remote communities are piled into this as well, which is
why the average comes down. And so I mean, if
you're thirty today and you're planning to retire at the
retirement age of sixty seven, the five hundred and ninety
five thousand dollars for your comfortable lifestyle figure, I would say,
is a conceptual baseline, not the actual target, because we
(17:04):
need to adjust for inflation. So that's what you would
need beck to retire today.
Speaker 2 (17:09):
You got you got you Okay.
Speaker 3 (17:12):
So if you're thirty or around that and you go
into a super right now you're super cout and you
check how much you have, I guess.
Speaker 2 (17:20):
It's hard to say, but what would that figure look like? Yeah,
so I have those figures.
Speaker 3 (17:25):
So I've got superannuation balances by age and gender, and
we can quickly go across that. So if you are
between the age of eighteen to twenty four, I'm just
going to base it on females because the male actually
I'll tell you both, right, sure, So the average account
balance for someone between the age of eighteen to twenty
four is seven thousand, two hundred and ninety seven dollars
(17:47):
if they're a female, and eight thousand and sixty nine
dollars if you're a male. Obviously, in our community, they
actually sit between the ages of twenty five to thirty five,
and there's a bit of variance. So if you are
between the age of twenty five to twenty nine and
you're a female, the average is twenty three thousand, two
hundred and seventy three dollars. If you are male, it
(18:08):
is twenty five thousand, four hundred and seven dollars as
the average. If you are and I'm just going to
jump up to thirty five to thirty nine, that jumps
to seventy one thousand, six hundred and eighty six dollars
as the average female account. And then if you're male,
and this is where things start to slip with my
big genka. Absolutely, if you're a male, your average account
(18:32):
balance if you're between the age of thirty five to
thirty nineties ninety thousand, eight hundred and twenty two dollars.
If we jump back up to what retirement age is,
So retirement age is sixty seven in Australia, So if
you are between the age of sixty five and sixty nine,
the average account balance is three hundred and seventy nine thousand,
(18:53):
four hundred and eighty three dollars, and you go, that's
pretty good.
Speaker 2 (18:56):
That's for females.
Speaker 3 (18:57):
If you're a male between the ages seventy five and
sixty nine and the average is four hundred and twenty
eight five hundred and thirty three, that's just telling me
that obviously there is a gender pay gap, full stop.
Speaker 2 (19:07):
End of story.
Speaker 3 (19:08):
Women are retiring consistently with less superannuation than men on
that website. So we were talking about the ASFA before.
There's actually a very cool research tool called Superdetective. So
the Superdetective tool will let you put your age in
and then it will tell you how much you need
to have today beck to hit their comfortable retirement or
their modest retirement ages. Right, And I'll tell you a
(19:31):
bit after this because I'm going to get into it.
There's a number of different calculators you can use as
well that will show you where you need to be
and what that means. Yeah, okay, okay, so wow, it's
a big numbers game today. What other numbers might we see?
Speaker 2 (19:45):
Okay? So you might have heard the rule and a
lot of.
Speaker 3 (19:48):
Financial advisors use this a lot of websites, a lot
of blogs. They say you need to have seventy percent
of your income. And it's a rule that I would
say is one of the most commonly quoted shortcuts for
estimating how much money you'll need to live on in retirement.
But I would say that it comes with some I
don't know, there's just like a lot of pros and
(20:08):
cons and some pretty big assumptions that are baked into that.
Speaker 2 (20:10):
So let's quickly have a chat about it. I suppose yes, please.
Speaker 3 (20:14):
I've written a little bit of a pros and cons
list because I don't want to bore you too much,
because I feel like this episode is very like numbers,
and like he's the median and here's the aide.
Speaker 2 (20:22):
Do you know what I mean?
Speaker 3 (20:22):
It's just this a lot, but the pros of the
seventy per cent rule, it's relatively easy, Like, it's pretty quick.
Just calculate seventy percent of your income. You don't have
to pull out some spreadsheets, you don't have to crush
your dreams. You don't have to, you know, work out
what your retirement budget is and you're crunching the numbers
all night. It actually just gives you a rough ballpark
in I would say seconds, sure, money you in. We
(20:42):
love to see it, easy times money. It takes into
account reduced expenses so within retirement hopefully.
Speaker 2 (20:49):
Hopefully, and we've got our fingers crossed.
Speaker 3 (20:51):
You're not paying off a mortgage, you don't have young
kids to raise, you're not paying school fees, you're not
paying for school camp. You're not commuting daily, so we're
not spending lots on my key to go in and
out of the big smoke. You're not making big superannuation
contributions because you're already retired, right, So the idea is
that your income will shrink a bit, and that's okay.
(21:12):
And for me when I was working as a financial advisor,
it's a pretty healthy conversation starter. It's a pretty healthy
starting point, especially for people in their twenties to forties
who maybe haven't thought a lot about retirement but want
to kind of sense check. Like if I sat you
down and said, all right, beck, well let's talk about retirement,
you might go, I don't even know where to start
the yeah, And I go, okay, cool. Will that start
(21:32):
with the seventy percent rule? And I explained that that's
you know, you living off seventy percent of your income.
Or we can start having a conversation about how comfortable
you'd be, could you would you?
Speaker 2 (21:43):
Would you want more than that?
Speaker 3 (21:44):
But I don't know if you've got some bougie retirement plans, babe,
you're going to go get like a yacht off the
coast of France, like I don't know what your plans are. Yeah,
so it kind of jump starts that conversation into would
that be appropriate? What should we be predicting, what should
we be organizing? Sure, on the flip side, though, there
are some cons it's not very personalized, like it doesn't
(22:06):
consider whether you're going to own your own home or
if you're going to rent forever, or what kind of
retirement lifestyle. Like we're not talking about whether you're going
to get a yacht or if you're going to caravan
around Australia. Like we're not having these conversations like are
you a super minimalist, Are you're going to go completely
off gridter you're not even get a plan to need
money because you're growing all your own vegs, Like, I
don't know that's the dream, But everybody's got their own plans, right.
(22:28):
It's not very personal It doesn't talk about the age
pension at all, and the reality is most Australians are
going to need to rely on the aged pension and
the seventy percent rule assumes that your income is entirely
coming from your savings, your investments and your superannuation. So
(22:50):
I would say it might overestimate how much money you
need in retirement.
Speaker 2 (22:55):
That's good unless it's daunting. Yeah, but like it could
be really scary.
Speaker 3 (23:00):
Yeah, that's like you know, like hypothetically, if I was
helping my parents retire and they were stressed about it,
and I was sitting them down, and I'm like, well,
seventy percent rule, and then we calculate what that is
for how much they needed in super, that very quickly
becomes very overwhelming because they might not have access to that.
Speaker 2 (23:16):
Yeah, do you know what I mean?
Speaker 3 (23:17):
Like we're not talking about the resources and the support
and the age pension and how you know, the super
could just act as a top up as opposed to
the primary income. It also, high owners are relatively skewed.
So like, girl, if you're earning two hundred grand a
year right now, do you actually need one hundred and
forty grand a year in retirement?
Speaker 2 (23:37):
Like probably not, No, I wouldn't think so.
Speaker 3 (23:40):
No, you probably set yourself up, You probably paid off
your entire house, and like, if you are living a
minimalist life, you probably don't need one hundred and forty
thousand dollars in income. Yeah, So I would say the
percentage doesn't scale well across lots of different types of incomes.
Speaker 2 (23:55):
Sure, okay, so how do we actually work out the
right figure for us?
Speaker 3 (23:58):
So you probably figured out by now from this conversation
that we've been having that's superannuation and retirement. It's definitely
not like a one size fits all approach, and that's
why I love.
Speaker 2 (24:09):
And I hate it. Like everyone's different, so we should
embrace that.
Speaker 3 (24:12):
But also I wish I just had a rule like
you'll give you back, Like if I could be like,
oh yeah, fully get back behind the seventy percent rule
money ween, it works for everybody, Like how much easier
would that be?
Speaker 2 (24:22):
As an episode? That would have been so much easier
to be done. Here's the rule, this is the number,
this is what you're working towards.
Speaker 3 (24:29):
And if I could turn around and be like, okay, cool,
at retirement, you need this amount of money, how much
easier would my.
Speaker 2 (24:36):
Life and your life be? Oh, I'll just go towards
that slavy.
Speaker 3 (24:39):
So, because it's not a one size fits all approach,
and because we've been yapping for a while, I think
you and I let's take a really quick break, and
when we're back, I'm actually going to help you work
out what your magic number is and then give you
a game plan to actually get there. So don't go anywhere,
all right, V before the break, you promised to help
us fe about the rights of balance for our life promises,
(25:02):
not just averages.
Speaker 2 (25:04):
That sounds like a mammoth task. So where do we begin?
Speaker 3 (25:08):
Okay, So what we want to do is kind of
like you know how saying the seventy percent rule is
a really good rule for kick starting conversation.
Speaker 2 (25:15):
Yes, ma'am. We want to just get clear on what
retirement means.
Speaker 3 (25:18):
What's that mean for you? Like are you going off grid?
What would that cost? Are you growing all your own veggies?
What type of income would you need? On the flip side,
are we going to the South of France? And like
these are very And I use those examples because like
when I was a financial advisor, this is how I
talk to clients. So I'd be like, go, what's the plan? Yeah,
and then all of a sudden you go, no, I
don't need to go to the South of France. You'd
(25:39):
be like, okay, cool, what does retirement look like? And
then all of a sudden, it's much easier conversation to
go well, actually maybe and like maybe you're talking to
someone in their sixties, right, and they've just started having
grandchildren and they're really excited about just spending more time
with the grandkids. Like they're like, oh, like, hopefully I
can have them one day week. We'll go to the
(26:00):
cafe and like, what do holidays look like? And you know,
I used to talk to a lot of people would
be like, oh, well, I don't actually want to do
a whole heap of overseas stuff. Maybe they've already done that,
maybe they don't have an interest in it. They're like, oh,
maybe like trip to Queensland every year, yeap. Or on
the flip side, I might have sat down with a
retirement couple who are like, go, we have been waiting
for this.
Speaker 2 (26:19):
We want to travel the world.
Speaker 3 (26:21):
Like it's such a good conversation to have, but like,
right now, what are your retirement plans?
Speaker 2 (26:26):
What could that look like?
Speaker 3 (26:27):
And we want to price up what your lifestyle would
look like in today's dollars. So today, if you're retired,
what would that look like? What would your annual spending
look like? And what is kind of like a realistic
house cost, Like are you planning on getting a mortgage
and having it paid off or are you planning on renting?
Speaker 2 (26:44):
Like, what should we be allocating? Sure, okay, okay, So
we have our annual spending.
Speaker 3 (26:50):
What do we do next? We need to then take
that and go okay, well, on average, and like, let's
just pick a number out of the air. Right, on average,
you've decided beck that you want to spend sixty thousand
dollars yeap, And now I'm using that number because it's
higher as a single, because you said that we're going
to pretend to your single for a hot minute. It's
higher than the modest and the comfortable lifestyle based on
(27:12):
the ASFA, right, yeah, so you want to translate that
and you'll spend into a bull park lump sum. So
we want to do and we always times it by
twenty because that's what's going to give us a draw
down rate of five percent. So if you times anything
by twenty, you're going to get that five percent number.
(27:32):
So you let's pretend you want an income of sixty
thousand dollars. Bet sure, sixty thousand times twenty is going
to equal one point two million dollars.
Speaker 2 (27:43):
Yeah, okay, okay, okay, And so.
Speaker 3 (27:45):
That one point two million dollars means that every single
year if you had one point two And I'm not
trying to scare you because that's like a relatively large number.
Speaker 2 (27:54):
But we're just like working backwards.
Speaker 3 (27:55):
And I think a lot of us, you know, we're
listening to the Sheese on the Money podcast because we
want better for ourselves. I can almost guarantee that if
you are in your thirties right now, or if you're
in your twenties right now, and I go, how do
you want to retire, You're not going to say, oh,
I would just like a modest retirement. Most of us
want the financial freedom.
Speaker 2 (28:16):
To do whatever we want there. Yeah right, yeah, So.
Speaker 3 (28:19):
I don't want to scare you with these numbers. But
also these numbers are completely achievable. Right, So we'd need
an investment of one point two million dollars, assuming that
we draw down five percent each and every single year,
and that money doesn't remain income generating.
Speaker 2 (28:35):
I just want to double check. Draw down means like
just take out take out, Okay, yep.
Speaker 3 (28:39):
Drawdown is just taking that cash out. So every single
year you would take that cash out. And the reason is,
remember we said you retire at sixty five, yes, and
then we're assuming you.
Speaker 2 (28:49):
Die at eighty five. Make sure you diet eighty five.
Speaker 3 (28:51):
How many years have you got We've got twenty years,
so we times it by twenty yes, and then five percent.
Speaker 2 (28:56):
So we're assuming assuming every year we draw down five
percent of that the interest earned. So if there's no
just have that lump some and we don't make any money.
Speaker 1 (29:08):
Ever.
Speaker 3 (29:08):
Again, understand we've been quite conservative here. In twenty years,
you will have no money left.
Speaker 2 (29:13):
Got you, got you?
Speaker 1 (29:13):
Got you? Okay?
Speaker 3 (29:15):
In a perfect world, right, in a perfect world, you'd
have that one point two million dollars and it would
be invested, Yes, and we just live off the money
that your money made.
Speaker 2 (29:25):
God, that would be so good.
Speaker 3 (29:26):
Then your kids or your family, or your friends or
the lost dogs home when you die.
Speaker 2 (29:31):
Gets one point two million dollars.
Speaker 3 (29:33):
Gorgeous, sexy copli crazy not the reality for most people,
but like, that's a pipe dream, right, and that totally
completely happened.
Speaker 2 (29:40):
Oh my god, totally.
Speaker 3 (29:41):
So how do we work out if we have enough
or if we will have enough to hear this target
by the time we retire? So the Money Fromart website
is one of my favorite websites ever, like the confound
interest calculators my favorite go to there, right, But there
are another two calculators that don't talk about enough on
this podcast, on that money Smart website that you you
can use to see how you're tracking. So the first
(30:02):
one is their superanuation calculator. What you're going to do
is honestly type in money Smart Superanuation calculator and it
will come up as the first Google search result.
Speaker 2 (30:11):
You're going to click that.
Speaker 3 (30:12):
Then you're going to put in how old you are,
what your salary is, what your current supernuation balance is,
like how much you're contributing, and your risk. So we
want to understand a risk, are your conservative your growth investor?
Are your high growth investor? And then it will show
you your projected balance at retirement in today's dollars.
Speaker 2 (30:32):
Scary. I don't know, I'm scared of that for a reason.
Speaker 3 (30:34):
But like how Good's clarity, Yeah, that's so true, because
do you know what when you're younger, Like, let's pretend
you're thirty and you're like listening to this episode, very
small tweaks today had very big incacs when it comes
to retiring. It could mean you go, oh shit, I'm
going to just talk to my employer and put in
an extra two hundred bucks a month. I'm never going
to have to think about retirement again because I'm set.
(30:57):
But the same thing is not true. If you're seeing
and thinking about retirement and using that calculator, you can't
just add two hundred bucks and hope it's going to
be good. Yeah, we have so much power when we
are young, Beck, because we have time on our side,
and from little things, big things grow. Now, the second
money Smart calculator is their retirement plan a calculator. Stick
in to Google Money Smart Retirement Plan a Calculator. I
(31:22):
love this one because it's a little bit more comprehensive,
takes a little bit longer, but I promise you're going
to want to do it. It's going to ask you
some similar questions to the first one. But you can
also include your partner if you have one plus in
the advanced settings. And we do want to play with
the advanced settings, because like, we're not here to mess around,
we're here to create a retirement plan, Beck, you can
(31:45):
play around with things like your age that you want
to you know, last too, so maybe you're like, oh
my god, like Victoria told me that most of this,
like ASFA data assumes that I retire at sixty five
and die at eighty five. Go, You're going to look
at your nan who's one hundred and one, Like maybe
you have a higher life expectancy in your family and
(32:05):
this can be a morbid conversation, but I'm sorry, you're
gonna need a plan for a few.
Speaker 2 (32:08):
More years than eighty five.
Speaker 3 (32:10):
Yeah, but you can fiddle with that number like the
age you want it to last you, and it will
show you what your yearly income would be from your
superranuation combined with your partner if you have one, And
you can also select if you want it to include
the age pension or not, which I think is really
empowering true because remember before you and I just said
you wanted a sixty thousand dollar income in retirement. Yeah,
(32:32):
that's where the seventy percent rule starts to fall down,
because we didn't talk about the age pension at all.
We just said you needed one point two million dollars
in superranuation to achieve that lifestyle.
Speaker 2 (32:42):
Back, does everyone get the age pension?
Speaker 1 (32:44):
No?
Speaker 3 (32:44):
No, it's asset based, Okay, So you can get the
age pension if you own your own home because your
family home is not considered or taken into consideration when
accessing the age pension. But they do consider youre and
there's like I believe it's around four hundred thousand dollars
before it starts to come into play, but other assets,
(33:05):
so they'll look at your superannuation, they'll look at it,
your investment properties, they'll look at your cars, your boats,
you're literally everything that you own. And if you own
over a certain amount of assets, then it starts to
impact how much of the age pension you get.
Speaker 2 (33:20):
It's not a cutoff and they say you have more
than that, you get none.
Speaker 3 (33:23):
It starts to cut down how much age pension you
get until basically it says, okay, well you don't qualify
for any of it, okay, and this calculator will tell
you based on the assets you're planning on owning at retirement,
not including your family home, which is a little bit sneaky, right,
because if your family home is worth five million dollars, yeah,
(33:44):
that's fine because.
Speaker 2 (33:45):
Your family home's not not taken into consideration.
Speaker 3 (33:48):
True, there's parts that I really like, I agree with
because it like, okay, well we all need to rip
of our heads. But yeah, I suppose you could move
into your most expensive one yep. Are Okay, Yeah, there's
just there's a few things that make sense and don't
make sense. But ideally the plan with the age pension
is that it works out for the average Australian.
Speaker 2 (34:08):
So yeah, you can stick that in and.
Speaker 3 (34:10):
It will show your annual income that is necessary in
today's dollars, and I think that that's really powerful. It's
also a really great tool if you're helping your parents,
if they are, you know, going through overtirement at the moment,
or trying to calculate it out, or they've got some
questions or queries, it's a great resource to go to.
Speaker 2 (34:26):
Okay, And so we're going to either see if we're
on track or on target or not.
Speaker 3 (34:33):
And that's where we want to compare our projection to
the target, like are we on track? Do like we
need to do a schedule or review. Is there a
little bit of a gap? What does that look like?
If so, how are we going to make that up?
Have we taken some If you're a female, very likely
you've taken some time out of the workforce. Do we
need to top up our superannuation? Like do you maybe
(34:55):
want to save for a house and you haven't really
thought about that before. But you're like, oh, maybe I do. Actually,
we want to own a home by the time I retire.
It's like kickstart these conversations. Doesn't mean you need to
Renting for life is a very valid strategy, but it's
a strategy that needs a plan still. Yeah, so it's
not a oh I didn't think about it and I
ended up renting for life. We still need a plan.
(35:17):
We are making a financial plan irrespective of what our
goals are, whether you want to own a home or not.
And I think knowing this now to me is so
empowering because time is on your side. Most people in
our community sit between the age of twenty five and
thirty four. Go go look at your superinuation and make
(35:40):
small tweaks now so that we're not having big problems
down the track.
Speaker 2 (35:43):
Yep, yepkay.
Speaker 3 (35:45):
There are heaps of options as well. There are lots
of quick wins. You can log into your supranuation accounts.
You can go to your MiG of account and consolidate
your multiple subrounuation accounts. If you've got them, you're going
to save heaps of money on fees you could look
at the fees of your fund and do a little
bit of comparison. You can look at the performance of
your fund and pick one that's aligned to your values.
Speaker 2 (36:05):
I would make sure that you're doing a.
Speaker 3 (36:07):
Risk profile and actually understanding well, am I actually a
balanced super fund member?
Speaker 2 (36:11):
Or am I a bit of a high growth baddie?
Like what does that look like?
Speaker 3 (36:16):
And then you know, maybe let's say you're behind, well,
you could boost your salary sacrifice.
Speaker 2 (36:22):
Girl, that's pre tax like money win.
Speaker 3 (36:25):
You can play around with the calculators I mentioned earlier
to see what impacts additional contributions might be able to have.
You could make a plan to invest outside of superannuations.
So you've got another nest egg, We've got double You
could look at additional income streams that you could add
in retirement, like totally, what else are we going to plan?
Speaker 2 (36:46):
There's just so many things we could plan. And when
you have time on your side, we've got so much,
so much.
Speaker 3 (36:50):
And I just based on when I worked at superannuation
company two different ones. They always have their own like
financial advice, like general financial advice for free.
Speaker 2 (37:00):
You can just call up and say, hey, I want to.
Speaker 3 (37:01):
Talk to someone about if you don't understand risk profiles
and all that kind of one hundred superannuation company, if
you just call them and have a chat, they will absolutely.
Speaker 2 (37:10):
Help you and talk you through it. So and they
love that. Please call them already you love it. You're
literally paying them with your super fees.
Speaker 3 (37:16):
Yes, And if you call up and I just I
remember this from one particular place, I'm sure it's in
a lot of different superannuation companies. If you say I
would like general advice, and they put you through the
general advice team, the person who answered your.
Speaker 2 (37:26):
Call gets some sort of voters. I remember we got
like a gig guys. Yeah, they do so super fun.
You've everyone a bonus, you've ever had a bonus? Get
free advice? God win win. Okay, so this episode was
very numbers heavy.
Speaker 3 (37:38):
It was quite numbers heavy, and I am sorry. And
we'll probably do an Instagram post at the same time
as this goes out, So go check our feed because
all of those numbers and stats and stuff will probably
be on a carousel post for you if you want
more information. They will all be on the ASFA website,
which we will link in the show notes. And I
will also make sure that all the calculators that we
have mentioned are also linked in the show notes for you.
Speaker 2 (38:01):
God, she's good. God she's good.
Speaker 3 (38:02):
I feel empowered. Dare I say, oh, hey, yeah, so
I think this is a great place to leave it.
I do as well, and I'm glad that you feel
empowered as you should you.
Speaker 2 (38:13):
Queen.
Speaker 3 (38:13):
Look, super might not be the most exciting thing in
the entire world, or even something that's on your radar,
but like, congrats, queen, if you got through this entire
episode and you're listening to me saying this, like you
have done something for future you already. But it is
the quiet achiever. It is going to fund your bottomless
brunches when you're seventy. If you want to be that
(38:34):
seventy year old who you go wonder what she did
in the past life to be able to drink him
in Mosa at ten am, that's who I plan on being.
Speaker 2 (38:42):
Oh yeah, I want people to question what I did
with my life to end up.
Speaker 3 (38:45):
In the brunch location at ten am, drinking him in
Mosa And I guess that's the kind of long game
that we're all here for. And if you haven't already,
please hit follow tap subscribe, do all the things, because
we've got plenty more episodes coming.
Speaker 2 (39:00):
Are genuinely going to put future you in the best
possible financial position. We'll see you guys on Friday.
Speaker 1 (39:06):
Bye did buy.
Speaker 3 (39:13):
Shared on She's on the Money is general in nature
and does not consider.
Speaker 2 (39:17):
Your individual circumstances.
Speaker 3 (39:19):
She's on the Money exists fully for educational purposes and
should not be relied upon to make an investment or
financial decision. If you do choose to buy a financial product,
read the PDS TMD and obtain appropriate financial advice tailored
towards your needs. Victoria Divine and She's on the Money
are authorized representatives of Money Shopper Pty Ltd.
Speaker 2 (39:40):
A b N three two one IS six four nine
two
Speaker 3 (39:43):
Seven seven zero eight AFSL four five one two eight
gerln
My name is Tatasha Bamblet. I'm a proud First Nations
woman and I'm here to acknowledge country t Glenn Young Ganya, Niana,
Kaka yah y and beIN Ahaka Nian our gay In Mbina,
yakarum jar Dominyamiga Umagahawakaman damon Imlan Bumba bang Gadabomba in
and now in wakah ghana on yak rum jar Watnadaa. Hello,
(00:22):
beautiful friends, we gather on the lands of the Aboriginal people.
We thank acknowledge and respect the Abiginal people's land that
we're gathering on today. Take pleasure in all the land
and respect all that you see. She's on the Money
podcast acknowledges culture, country, community and connections, bringing you the tools,
knowledge and resources for you to thrive.
Speaker 2 (00:44):
She's on the Money. She's on the Money.
Speaker 3 (01:07):
Hello, and welcome to She's on the Money, the podcast
that's here to tell you whether your super is giving
future freedom or coasting.
Speaker 2 (01:13):
Without a game plan yet.
Speaker 3 (01:15):
Today's episode was inspired by our community member Fiona, who
slid into our Spotify comments and asked, do you have
an episode on the minimum super people should have for
their age seems to vary when you google it.
Speaker 2 (01:25):
Great question.
Speaker 3 (01:27):
I'm bexcited and here to help us get to the
bottom of this with me is the woman who is
always telling me that superannuation is very sexy.
Speaker 2 (01:34):
It's just very, very very sexy. Beck, I'm yet to see. No,
you're not.
Speaker 3 (01:39):
You used to work in superannuation and this is something
we should be genuinely, I'm so wildly passionate about this
right because this is what's setting us up for future
financial success. But it's also something that keeps coming up
because a lot of us in this demographic are having
parents that are starting to talk about retirement, that are
starting to talk about how much they need in supernuation
(02:00):
for a comfortable retirement. And when you start googling it,
the numbers are so confusing, and they start talking about, oh, well,
this is the average for women at this age, and
this is the average for men at this age. That's
not the average of what you need, Beck, That's just
the average of what people retire with. And it frustrates
me as an ex financial advisor because durant a little
bit at the start of this episode, superranuation as a
(02:22):
concept was not compulsory until nineteen ninety two. Right, So,
for a lot of our parents and a lot of
our older community members, they worked for a very long
time without contributing anything to supranuation. So when we get
numbers that say the average woman retires with X, that's
(02:44):
not taking into consideration what the average female needs. It's
taking into consideration just what people are retiring with on average,
after most of them didn't actually contribute for their entire
working lives.
Speaker 2 (02:56):
Sure, so moneywin. For most of us millennials and gens.
Speaker 3 (03:00):
We are working for our entire lives and contributing to
supranuation at the same time. So we are already in
a better position than most of our parents purely because.
Speaker 2 (03:12):
Of our consistent contributions. Yeah, so, like that's a win.
But still, how much do you need? Beck, that's the question?
Do you need? How do you work out what do
you need? What's the age pension? How does that work? Like?
At what point would we get that?
Speaker 3 (03:25):
Yeah? Okay, so is it like government figures or something
else we should be looking at.
Speaker 1 (03:29):
Yeah?
Speaker 3 (03:30):
So, I mean, the government does put out a lot
of resources, and they are very good resources if you
know how to use them and what to key into them.
But more often than not, we don't know where we're starting, right.
So the Association of Superbranuation Funds of Australia, which you've
probably never heard about nor will you ever care about,
but I do, or the ASFA for short, they are
the peak body that represents all subranuation funds in Australia
(03:53):
and every single year they release they're what they call
like their Superbranuation Standard, which they is Australia's benchmark guide
for how much you need to be able to have
in retirement or spend in retirement, right, and they update
this quarterly so you can consistently check back. So it's
not like outdated data that's not taking into consideration the
(04:16):
cost of living crisis or like inflation or whatever. It's
a very up to date and the most recent one
available at the time of us recording this episode BECK
was the one that was released in March twenty twenty five,
so we're going to use that data and everything is
in today's dollar. Right. So if we look at the
ASFA retirement standards, if you are a homeowner, so if
(04:39):
you already own your home and you want to have
what they call a comfortable lifestyle by the time you retire,
and today retirement age it used to be sixty five,
it's now classified as sixty seven. By the time you
reach the age of sixty seven. If you are single,
they recommend that you have five hundred and ninety f
(05:00):
five thousand dollars in your superannuation.
Speaker 2 (05:02):
Okay, right, yes, If you.
Speaker 3 (05:04):
Are in a couple, that number is six hundred and
ninety thousand dollars together together, okay, which is I would
say comforting, because like, if you are in a couple,
you obviously need less. And I think that that is
It's interesting because we'll get into it a little bit
further because this is what they say is a comfortable retirement.
Speaker 2 (05:25):
But I think you and I might disagree. I think
it does take into account like the cost of living. Yeah,
it does, it does.
Speaker 3 (05:34):
So that is based on and they say every single year,
a single person will spend fifty two thousand, three hundred
and eighty three dollars, not including mortgage because we already
a home owner, yes, yes, yes, and they're hoping that
you've paid it. And as a couple, you'll be spending
seventy three thousand, eight hundred and seventy five dollars and
that covers like they've taken into consideration for a comfortable lifestyle.
(05:57):
That means that you can pay for private health insurance,
you are paying for a reliable car to stay on
the roads.
Speaker 2 (06:04):
You have like regular leisure activities.
Speaker 3 (06:06):
So they're assuming that you do dine out, and you
do go on holidays, and you might go to the
local swim center every week, like water aerobics whatever. It
includes home maintenance and some upgrades as you might need them, sure,
and then digital connectivity, so like they're including things like Netflix,
they're including streaming services, they're including your internet.
Speaker 2 (06:26):
So they're not delusional, if that makes sense.
Speaker 3 (06:29):
It's not as though they're looking at this and going, oh,
comfortable retirement and they're still using figures based in nineteen
ninety five, Like that's not it, Like they genuinely do
look at it. But then they recommend a modest lifestyle
as well. So every time the ASFA release data, that
will release a modest lifestyle, and then like a comfortable
lifestyle and a comfortable lifestyle is more money than a
(06:53):
modesty modest is like I would say you can put
food on the table, yeah, and they say that a
superbalance needed it retirement for a modest lifestyle. And we
also need to take into consideration that the modest lifestyle
figures assume that you don't have lots of stuff, Like
you don't have a lot of assets. You also don't
have a lot of superannuation. And it means that they
(07:15):
assume that you are going to rely on the age pension,
and that age pension is going to work with your superranuation.
You super will kind of top it up a little
bit sure every single year. So they think that a
single or a couple will approximately have about one hundred
thousand dollars in super.
Speaker 2 (07:30):
Okay, Okay, that's some more. Do I think a lot
of people assumed that I would come on here and
be like, you need one point two million dollars in
sobrainuation there I certainly did. Gol, if you want one
point two million dollars, I can help you get there.
Speaker 3 (07:40):
I got the tools sick I can. I can teach you,
but like, we also want to be realistic. Yeah, So
that means that a single person would on average spend
thirty three thousand, three hundred and eighty six dollars per year,
and a couple would spend forty eight thousand, one hundred
and eighty four dollars okay, per year, and that covers
a lot of things. And just a quick are we
still talking about homeowners? So these people in the bucket
(08:05):
right now, Yeah, they've got one hundred grand in super
but they've also got a home paid off, so they're
not paying rent, they're not paying mortgage. Like the assumption
is that by retirement you paid off your home in full,
and for a lot of people that is actually the reality,
especially for boomers. I don't know if calling them boomers
is nice, but you know, for our parents' generation, Beck,
(08:25):
a lot of them haven't contributed more to superannuation. They've
really prioritized debt reduction. They've prioritized paying off their family home.
They are now completely debt free. They're ready to retire,
but like they don't have heaps in super sure And
that's okay. But what a modest retirement covers is you
still can afford basic private health insurance. The government really
(08:48):
prioritizes that limited leisure activities, so not so many trips,
but you are able to go to like the pool
and get a coffee out and stuff like that. Older
more basic car and then household goods and services. So
we're not paying for upgrades to the house, we're not
going on holidays, but like we can put a roof
over our head and food on the table every single week.
That's all you need, baby, And just to like recap,
(09:10):
there are a number of assumptions that for the modest
and the comfortable lifestyle, there are a number of assumptions
that the ASFA have made. And reminding you that those
retirees have paid for their house in full, completely at right,
no debt, no mortgage, no rent, that they retire at
age sixty five, and then they live to eighty five. Okay,
(09:31):
so we are living for twenty years after we sell
our house.
Speaker 2 (09:36):
That's so morbid, doesn't it? Well, it does, But.
Speaker 3 (09:38):
Then the reality of that situation is we're starting to
live longer. Yeah, So, like, are these predictions actually reflective
of what we're going to need?
Speaker 2 (09:45):
What if I live to eighty six? See, what do
you do? You run out of money?
Speaker 3 (09:48):
What if, like my icon of a grandpa, I lived
to ninety four or he was like literally like a
few days away from being ninety five.
Speaker 2 (09:55):
Oh that's an additional ten years. Yeah, yeah, I need
to pay for Yeah, it's just a that's a while
that they're like, you'll probably DIEDT five. It's like, no,
I don't know a lot of people that are.
Speaker 3 (10:04):
And there's another assumption that they will both receive part
of an age pension. So for the modest lifestyle it's
a full pension and for the comfortable lifestyle it's part
of an age pension. And then instead of having their
superannuation sit there and you might have heard me talk about,
you know, it's fantastic because when you invest money, Beck,
the money that you've invested then makes money. And in
(10:26):
a perfect world, we never spend the money that we
have invested. We always live off the income. Yeah, but
it actually assumes draw down because we don't have that
grace Like if you only have one hundred thousand dollars
in super and that's returning what five percent every year?
So five percent is what a financial advisor will use
(10:48):
as a draw down rule because we know that the
average and I'm going to go off on a tangent here,
I do apologize the average of the Australian share market
returns closer to ten percent every year, but it's not consistent, right,
so some years the market might be off some years,
the market might be an absolute bullmarket and it's having
a really great time. But when you're a financial advisor,
the advice is that you use an average rate or
(11:10):
a draw down rate of five percent, because that's quite conservative,
and it means that if it's a shitty year, Beck,
we're going to be okay, and if it's a good year,
there'll be some cash left over in your super for
the other years that aren't as good.
Speaker 2 (11:23):
Right, So we use five percent.
Speaker 3 (11:25):
But if you've only got one hundred thousand dollars in superannuation,
five percent of that bex five grand.
Speaker 2 (11:31):
A year, you can't live off that.
Speaker 3 (11:33):
So you have to start taking some of the actual
investment out so that you can live your life. And
so every year you start to cut into that investment,
and then the returns start to diminish as well. I'm
not saying that that's scary. That is the reality for
most people. I just want you to fully understand what
that means and why and when and where and how.
Speaker 2 (11:53):
Okay, okay.
Speaker 3 (11:54):
On the flip side, not all of us own property,
not all of our parents' own property, And the reality
is for a lot of people, you're going to rent
for life, that's fine.
Speaker 2 (12:04):
There's literally no shame in that. We just have to
financially prepare for it.
Speaker 3 (12:07):
Yeah, because if we've got rent as another overhead, like,
we just need to factor that in because housing is
a major cost. The ASFA actually publishes completely separate figures
for retirees who do own their homes versus retirees who
don't own their homes in retirement, which I think is
really responsible. And there's no quote comfortable lifestyle benchmark provided
(12:31):
for that because I think they well, I think they
realize that if you're going to be renting for life,
that's a significantly it's harder, like it's harder to rent
and put food on the table and have that income.
Like if you were in the comfortable bucket, maybe we
could get a mortgage. So all they give us is
(12:52):
the modest lifestyle for that fair enough. So a souberannuation
balance at the quote retirement age of sixty seven for
a single is three hundred and forty thousand dollars and
for a couple it's three hundred and eighty five thousand dollars.
And then for their annual spending, because they're going to
spend a bit more because they're renting as well. For
(13:12):
a single person, they're spending forty six thousand, six hundred
and sixty three dollars a year, and for a couple
it's sixty four thousand, two hundred and fifty nine dollars
a year. This just tells me that financially, being in
a couple makes sense. Isn't that sucky? I know? But
also I'm like, it's not that much different to be single,
(13:33):
and I like, I just I don't think we need
to be in a couple. So I'm like, this is
still because I'm looking at the single fore years, even
though I'm not single right now.
Speaker 2 (13:39):
But I'm like, I don't want to plan for being
in a couple. I think this is still very doable.
Speaker 3 (13:44):
And I say so, the extra cost assumed if you're renting,
if you're a single person is thirteen thousand, two hundred
and seventy seven dollars a year, and then they think
that if you're in a couple, you're probably spending slightly more,
and you're spending sixteen thousand and seventy five dollars on rent,
and the rent assumed on that is each week, And
(14:05):
I don't think this is enough personally, but each week
they assume that you're spending three hundred and eighty bucks
a week.
Speaker 2 (14:12):
They're getting this, yeah, let me just disclaim it.
Speaker 3 (14:16):
The I don't agree, but living sticks as a single person,
and then as a couple, they think you're spending four
hundred and fifty bucks.
Speaker 2 (14:22):
That's how much it should be.
Speaker 3 (14:23):
And there's I'm not going to go on our tangent,
but I just don't think anyone's doing about this rental
crisis general in I remember my rent in like twenty
fifteen was four hundred and fifty dollars a week, and
at that time that was so expensive.
Speaker 2 (14:37):
Yes, yes I was.
Speaker 3 (14:38):
Sharing with someone else, don't worry, but like that felt
like a lot at that time. And I know that
rent nowadays, and like it's not that I don't understand
the rental market. Guys at work in property, I really
do get it. But it just it blows my mind
that those are still the figures that they're using and
like projecting on, because if you reflect, go back and
they've assumed that you're like will go on the single one, right,
(15:01):
they've assumed your annual spending is forty six thousand, six
hundred and sixty three dollars, but of that, you're spending
only three hundred and eighty dollars on rent. Girl, You're
not going to be spending three hundred and eighty dollars
on rent. I would say half of that is going
to go on rent, and then what unless you're in
a sharehouse, which I can kind of understand, But.
Speaker 2 (15:18):
Are you're going to be sixty five and you're in
a sharehouse? I would absolutely. I know you're much.
Speaker 3 (15:22):
Cooler than everybody, but like I think a lot of
us by the time we were retiring, that's not what
we want. Sure, that's not what the average person wants.
And I know that you're probably like.
Speaker 2 (15:33):
Oh what about like leave blah laugh, Yeah, but like
I love it, and you can choose that. That's fantastic,
But some people they're in space.
Speaker 3 (15:41):
You deserve your own space, You deserve the financial freedom
that if that is what you want to choose, you
get that.
Speaker 2 (15:45):
I know, isn't that crazy.
Speaker 3 (15:47):
I remember looking for rentals with my mum when I
was like, I don't know, a teenager three fifty for
a four bedroom house.
Speaker 2 (15:52):
Now it's like over one thousand. I'm like, I'm so sorry.
To single parents out there.
Speaker 3 (15:56):
So these numbers are all in today's costs, right, And
I just told you about my rent back in twenty
fifteen being four fifty, Like, we kind of know that
their projection of three hundred and eighty next year, it's
going to be four hundred. The year after that's going
to be four ten, right, So we need to take
that into consideration as well, because these numbers from my perspective,
mean they're not adjusting for future inflation or like you
(16:18):
know I mentioned before, we're living longer, so like rising
life expectancy or even just more housing insecurity. Like this
is just I think, Yes, I get that they have
to put out their bare minimum for everybody in Australia,
and most of us listening to this podcast probably live
in a major city or regionally relatively comfortably. I would
(16:39):
say that we need to remember that a lot of
remote communities are piled into this as well, which is
why the average comes down. And so I mean, if
you're thirty today and you're planning to retire at the
retirement age of sixty seven, the five hundred and ninety
five thousand dollars for your comfortable lifestyle figure, I would say,
is a conceptual baseline, not the actual target, because we
(17:04):
need to adjust for inflation. So that's what you would
need beck to retire today.
Speaker 2 (17:09):
You got you got you Okay.
Speaker 3 (17:12):
So if you're thirty or around that and you go
into a super right now you're super cout and you
check how much you have, I guess.
Speaker 2 (17:20):
It's hard to say, but what would that figure look like? Yeah,
so I have those figures.
Speaker 3 (17:25):
So I've got superannuation balances by age and gender, and
we can quickly go across that. So if you are
between the age of eighteen to twenty four, I'm just
going to base it on females because the male actually
I'll tell you both, right, sure, So the average account
balance for someone between the age of eighteen to twenty
four is seven thousand, two hundred and ninety seven dollars
(17:47):
if they're a female, and eight thousand and sixty nine
dollars if you're a male. Obviously, in our community, they
actually sit between the ages of twenty five to thirty five,
and there's a bit of variance. So if you are
between the age of twenty five to twenty nine and
you're a female, the average is twenty three thousand, two
hundred and seventy three dollars. If you are male, it
(18:08):
is twenty five thousand, four hundred and seven dollars as
the average. If you are and I'm just going to
jump up to thirty five to thirty nine, that jumps
to seventy one thousand, six hundred and eighty six dollars
as the average female account. And then if you're male,
and this is where things start to slip with my
big genka. Absolutely, if you're a male, your average account
(18:32):
balance if you're between the age of thirty five to
thirty nineties ninety thousand, eight hundred and twenty two dollars.
If we jump back up to what retirement age is,
So retirement age is sixty seven in Australia, So if
you are between the age of sixty five and sixty nine,
the average account balance is three hundred and seventy nine thousand,
(18:53):
four hundred and eighty three dollars, and you go, that's
pretty good.
Speaker 2 (18:56):
That's for females.
Speaker 3 (18:57):
If you're a male between the ages seventy five and
sixty nine and the average is four hundred and twenty
eight five hundred and thirty three, that's just telling me
that obviously there is a gender pay gap, full stop.
Speaker 2 (19:07):
End of story.
Speaker 3 (19:08):
Women are retiring consistently with less superannuation than men on
that website. So we were talking about the ASFA before.
There's actually a very cool research tool called Superdetective. So
the Superdetective tool will let you put your age in
and then it will tell you how much you need
to have today beck to hit their comfortable retirement or
their modest retirement ages. Right, And I'll tell you a
(19:31):
bit after this because I'm going to get into it.
There's a number of different calculators you can use as
well that will show you where you need to be
and what that means. Yeah, okay, okay, so wow, it's
a big numbers game today. What other numbers might we see?
Speaker 2 (19:45):
Okay? So you might have heard the rule and a
lot of.
Speaker 3 (19:48):
Financial advisors use this a lot of websites, a lot
of blogs. They say you need to have seventy percent
of your income. And it's a rule that I would
say is one of the most commonly quoted shortcuts for
estimating how much money you'll need to live on in retirement.
But I would say that it comes with some I
don't know, there's just like a lot of pros and
(20:08):
cons and some pretty big assumptions that are baked into that.
Speaker 2 (20:10):
So let's quickly have a chat about it. I suppose yes, please.
Speaker 3 (20:14):
I've written a little bit of a pros and cons
list because I don't want to bore you too much,
because I feel like this episode is very like numbers,
and like he's the median and here's the aide.
Speaker 2 (20:22):
Do you know what I mean?
Speaker 3 (20:22):
It's just this a lot, but the pros of the
seventy per cent rule, it's relatively easy, Like, it's pretty quick.
Just calculate seventy percent of your income. You don't have
to pull out some spreadsheets, you don't have to crush
your dreams. You don't have to, you know, work out
what your retirement budget is and you're crunching the numbers
all night. It actually just gives you a rough ballpark
in I would say seconds, sure, money you in. We
(20:42):
love to see it, easy times money. It takes into
account reduced expenses so within retirement hopefully.
Speaker 2 (20:49):
Hopefully, and we've got our fingers crossed.
Speaker 3 (20:51):
You're not paying off a mortgage, you don't have young
kids to raise, you're not paying school fees, you're not
paying for school camp. You're not commuting daily, so we're
not spending lots on my key to go in and
out of the big smoke. You're not making big superannuation
contributions because you're already retired, right, So the idea is
that your income will shrink a bit, and that's okay.
(21:12):
And for me when I was working as a financial advisor,
it's a pretty healthy conversation starter. It's a pretty healthy
starting point, especially for people in their twenties to forties
who maybe haven't thought a lot about retirement but want
to kind of sense check. Like if I sat you
down and said, all right, beck, well let's talk about retirement,
you might go, I don't even know where to start
the yeah, And I go, okay, cool. Will that start
(21:32):
with the seventy percent rule? And I explained that that's
you know, you living off seventy percent of your income.
Or we can start having a conversation about how comfortable
you'd be, could you would you?
Speaker 2 (21:43):
Would you want more than that?
Speaker 3 (21:44):
But I don't know if you've got some bougie retirement plans, babe,
you're going to go get like a yacht off the
coast of France, like I don't know what your plans are. Yeah,
so it kind of jump starts that conversation into would
that be appropriate? What should we be predicting, what should
we be organizing? Sure, on the flip side, though, there
are some cons it's not very personalized, like it doesn't
(22:06):
consider whether you're going to own your own home or
if you're going to rent forever, or what kind of
retirement lifestyle. Like we're not talking about whether you're going
to get a yacht or if you're going to caravan
around Australia. Like we're not having these conversations like are
you a super minimalist, Are you're going to go completely
off gridter you're not even get a plan to need
money because you're growing all your own vegs, Like, I
don't know that's the dream, But everybody's got their own plans, right.
(22:28):
It's not very personal It doesn't talk about the age
pension at all, and the reality is most Australians are
going to need to rely on the aged pension and
the seventy percent rule assumes that your income is entirely
coming from your savings, your investments and your superannuation. So
(22:50):
I would say it might overestimate how much money you
need in retirement.
Speaker 2 (22:55):
That's good unless it's daunting. Yeah, but like it could
be really scary.
Speaker 3 (23:00):
Yeah, that's like you know, like hypothetically, if I was
helping my parents retire and they were stressed about it,
and I was sitting them down, and I'm like, well,
seventy percent rule, and then we calculate what that is
for how much they needed in super, that very quickly
becomes very overwhelming because they might not have access to that.
Speaker 2 (23:16):
Yeah, do you know what I mean?
Speaker 3 (23:17):
Like we're not talking about the resources and the support
and the age pension and how you know, the super
could just act as a top up as opposed to
the primary income. It also, high owners are relatively skewed.
So like, girl, if you're earning two hundred grand a
year right now, do you actually need one hundred and
forty grand a year in retirement?
Speaker 2 (23:37):
Like probably not, No, I wouldn't think so.
Speaker 3 (23:40):
No, you probably set yourself up, You probably paid off
your entire house, and like, if you are living a
minimalist life, you probably don't need one hundred and forty
thousand dollars in income. Yeah, So I would say the
percentage doesn't scale well across lots of different types of incomes.
Speaker 2 (23:55):
Sure, okay, so how do we actually work out the
right figure for us?
Speaker 3 (23:58):
So you probably figured out by now from this conversation
that we've been having that's superannuation and retirement. It's definitely
not like a one size fits all approach, and that's
why I love.
Speaker 2 (24:09):
And I hate it. Like everyone's different, so we should
embrace that.
Speaker 3 (24:12):
But also I wish I just had a rule like
you'll give you back, Like if I could be like,
oh yeah, fully get back behind the seventy percent rule
money ween, it works for everybody, Like how much easier
would that be?
Speaker 2 (24:22):
As an episode? That would have been so much easier
to be done. Here's the rule, this is the number,
this is what you're working towards.
Speaker 3 (24:29):
And if I could turn around and be like, okay, cool,
at retirement, you need this amount of money, how much
easier would my.
Speaker 2 (24:36):
Life and your life be? Oh, I'll just go towards
that slavy.
Speaker 3 (24:39):
So, because it's not a one size fits all approach,
and because we've been yapping for a while, I think
you and I let's take a really quick break, and
when we're back, I'm actually going to help you work
out what your magic number is and then give you
a game plan to actually get there. So don't go anywhere,
all right, V before the break, you promised to help
us fe about the rights of balance for our life promises,
(25:02):
not just averages.
Speaker 2 (25:04):
That sounds like a mammoth task. So where do we begin?
Speaker 3 (25:08):
Okay, So what we want to do is kind of
like you know how saying the seventy percent rule is
a really good rule for kick starting conversation.
Speaker 2 (25:15):
Yes, ma'am. We want to just get clear on what
retirement means.
Speaker 3 (25:18):
What's that mean for you? Like are you going off grid?
What would that cost? Are you growing all your own veggies?
What type of income would you need? On the flip side,
are we going to the South of France? And like
these are very And I use those examples because like
when I was a financial advisor, this is how I
talk to clients. So I'd be like, go, what's the plan? Yeah,
and then all of a sudden you go, no, I
don't need to go to the South of France. You'd
(25:39):
be like, okay, cool, what does retirement look like? And
then all of a sudden, it's much easier conversation to
go well, actually maybe and like maybe you're talking to
someone in their sixties, right, and they've just started having
grandchildren and they're really excited about just spending more time
with the grandkids. Like they're like, oh, like, hopefully I
can have them one day week. We'll go to the
(26:00):
cafe and like, what do holidays look like? And you know,
I used to talk to a lot of people would
be like, oh, well, I don't actually want to do
a whole heap of overseas stuff. Maybe they've already done that,
maybe they don't have an interest in it. They're like, oh,
maybe like trip to Queensland every year, yeap. Or on
the flip side, I might have sat down with a
retirement couple who are like, go, we have been waiting
for this.
Speaker 2 (26:19):
We want to travel the world.
Speaker 3 (26:21):
Like it's such a good conversation to have, but like,
right now, what are your retirement plans?
Speaker 2 (26:26):
What could that look like?
Speaker 3 (26:27):
And we want to price up what your lifestyle would
look like in today's dollars. So today, if you're retired,
what would that look like? What would your annual spending
look like? And what is kind of like a realistic
house cost, Like are you planning on getting a mortgage
and having it paid off or are you planning on renting?
Speaker 2 (26:44):
Like, what should we be allocating? Sure, okay, okay, So
we have our annual spending.
Speaker 3 (26:50):
What do we do next? We need to then take
that and go okay, well, on average, and like, let's
just pick a number out of the air. Right, on average,
you've decided beck that you want to spend sixty thousand
dollars yeap, And now I'm using that number because it's
higher as a single, because you said that we're going
to pretend to your single for a hot minute. It's
higher than the modest and the comfortable lifestyle based on
(27:12):
the ASFA, right, yeah, so you want to translate that
and you'll spend into a bull park lump sum. So
we want to do and we always times it by
twenty because that's what's going to give us a draw
down rate of five percent. So if you times anything
by twenty, you're going to get that five percent number.
(27:32):
So you let's pretend you want an income of sixty
thousand dollars. Bet sure, sixty thousand times twenty is going
to equal one point two million dollars.
Speaker 2 (27:43):
Yeah, okay, okay, okay, And so.
Speaker 3 (27:45):
That one point two million dollars means that every single
year if you had one point two And I'm not
trying to scare you because that's like a relatively large number.
Speaker 2 (27:54):
But we're just like working backwards.
Speaker 3 (27:55):
And I think a lot of us, you know, we're
listening to the Sheese on the Money podcast because we
want better for ourselves. I can almost guarantee that if
you are in your thirties right now, or if you're
in your twenties right now, and I go, how do
you want to retire, You're not going to say, oh,
I would just like a modest retirement. Most of us
want the financial freedom.
Speaker 2 (28:16):
To do whatever we want there. Yeah right, yeah, So.
Speaker 3 (28:19):
I don't want to scare you with these numbers. But
also these numbers are completely achievable. Right, So we'd need
an investment of one point two million dollars, assuming that
we draw down five percent each and every single year,
and that money doesn't remain income generating.
Speaker 2 (28:35):
I just want to double check. Draw down means like
just take out take out, Okay, yep.
Speaker 3 (28:39):
Drawdown is just taking that cash out. So every single
year you would take that cash out. And the reason is,
remember we said you retire at sixty five, yes, and
then we're assuming you.
Speaker 2 (28:49):
Die at eighty five. Make sure you diet eighty five.
Speaker 3 (28:51):
How many years have you got We've got twenty years,
so we times it by twenty yes, and then five percent.
Speaker 2 (28:56):
So we're assuming assuming every year we draw down five
percent of that the interest earned. So if there's no
just have that lump some and we don't make any money.
Speaker 1 (29:08):
Ever.
Speaker 3 (29:08):
Again, understand we've been quite conservative here. In twenty years,
you will have no money left.
Speaker 2 (29:13):
Got you, got you?
Speaker 1 (29:13):
Got you? Okay?
Speaker 3 (29:15):
In a perfect world, right, in a perfect world, you'd
have that one point two million dollars and it would
be invested, Yes, and we just live off the money
that your money made.
Speaker 2 (29:25):
God, that would be so good.
Speaker 3 (29:26):
Then your kids or your family, or your friends or
the lost dogs home when you die.
Speaker 2 (29:31):
Gets one point two million dollars.
Speaker 3 (29:33):
Gorgeous, sexy copli crazy not the reality for most people,
but like, that's a pipe dream, right, and that totally
completely happened.
Speaker 2 (29:40):
Oh my god, totally.
Speaker 3 (29:41):
So how do we work out if we have enough
or if we will have enough to hear this target
by the time we retire? So the Money Fromart website
is one of my favorite websites ever, like the confound
interest calculators my favorite go to there, right, But there
are another two calculators that don't talk about enough on
this podcast, on that money Smart website that you you
can use to see how you're tracking. So the first
(30:02):
one is their superanuation calculator. What you're going to do
is honestly type in money Smart Superanuation calculator and it
will come up as the first Google search result.
Speaker 2 (30:11):
You're going to click that.
Speaker 3 (30:12):
Then you're going to put in how old you are,
what your salary is, what your current supernuation balance is,
like how much you're contributing, and your risk. So we
want to understand a risk, are your conservative your growth investor?
Are your high growth investor? And then it will show
you your projected balance at retirement in today's dollars.
Speaker 2 (30:32):
Scary. I don't know, I'm scared of that for a reason.
Speaker 3 (30:34):
But like how Good's clarity, Yeah, that's so true, because
do you know what when you're younger, Like, let's pretend
you're thirty and you're like listening to this episode, very
small tweaks today had very big incacs when it comes
to retiring. It could mean you go, oh shit, I'm
going to just talk to my employer and put in
an extra two hundred bucks a month. I'm never going
to have to think about retirement again because I'm set.
(30:57):
But the same thing is not true. If you're seeing
and thinking about retirement and using that calculator, you can't
just add two hundred bucks and hope it's going to
be good. Yeah, we have so much power when we
are young, Beck, because we have time on our side,
and from little things, big things grow. Now, the second
money Smart calculator is their retirement plan a calculator. Stick
in to Google Money Smart Retirement Plan a Calculator. I
(31:22):
love this one because it's a little bit more comprehensive,
takes a little bit longer, but I promise you're going
to want to do it. It's going to ask you
some similar questions to the first one. But you can
also include your partner if you have one plus in
the advanced settings. And we do want to play with
the advanced settings, because like, we're not here to mess around,
we're here to create a retirement plan, Beck, you can
(31:45):
play around with things like your age that you want
to you know, last too, so maybe you're like, oh
my god, like Victoria told me that most of this,
like ASFA data assumes that I retire at sixty five
and die at eighty five. Go, You're going to look
at your nan who's one hundred and one, Like maybe
you have a higher life expectancy in your family and
(32:05):
this can be a morbid conversation, but I'm sorry, you're
gonna need a plan for a few.
Speaker 2 (32:08):
More years than eighty five.
Speaker 3 (32:10):
Yeah, but you can fiddle with that number like the
age you want it to last you, and it will
show you what your yearly income would be from your
superranuation combined with your partner if you have one, And
you can also select if you want it to include
the age pension or not, which I think is really
empowering true because remember before you and I just said
you wanted a sixty thousand dollar income in retirement. Yeah,
(32:32):
that's where the seventy percent rule starts to fall down,
because we didn't talk about the age pension at all.
We just said you needed one point two million dollars
in superranuation to achieve that lifestyle.
Speaker 2 (32:42):
Back, does everyone get the age pension?
Speaker 1 (32:44):
No?
Speaker 3 (32:44):
No, it's asset based, Okay, So you can get the
age pension if you own your own home because your
family home is not considered or taken into consideration when
accessing the age pension. But they do consider youre and
there's like I believe it's around four hundred thousand dollars
before it starts to come into play, but other assets,
(33:05):
so they'll look at your superannuation, they'll look at it,
your investment properties, they'll look at your cars, your boats,
you're literally everything that you own. And if you own
over a certain amount of assets, then it starts to
impact how much of the age pension you get.
Speaker 2 (33:20):
It's not a cutoff and they say you have more
than that, you get none.
Speaker 3 (33:23):
It starts to cut down how much age pension you
get until basically it says, okay, well you don't qualify
for any of it, okay, and this calculator will tell
you based on the assets you're planning on owning at retirement,
not including your family home, which is a little bit sneaky, right,
because if your family home is worth five million dollars, yeah,
(33:44):
that's fine because.
Speaker 2 (33:45):
Your family home's not not taken into consideration.
Speaker 3 (33:48):
True, there's parts that I really like, I agree with
because it like, okay, well we all need to rip
of our heads. But yeah, I suppose you could move
into your most expensive one yep. Are Okay, Yeah, there's
just there's a few things that make sense and don't
make sense. But ideally the plan with the age pension
is that it works out for the average Australian.
Speaker 2 (34:08):
So yeah, you can stick that in and.
Speaker 3 (34:10):
It will show your annual income that is necessary in
today's dollars, and I think that that's really powerful. It's
also a really great tool if you're helping your parents,
if they are, you know, going through overtirement at the moment,
or trying to calculate it out, or they've got some
questions or queries, it's a great resource to go to.
Speaker 2 (34:26):
Okay, And so we're going to either see if we're
on track or on target or not.
Speaker 3 (34:33):
And that's where we want to compare our projection to
the target, like are we on track? Do like we
need to do a schedule or review. Is there a
little bit of a gap? What does that look like?
If so, how are we going to make that up?
Have we taken some If you're a female, very likely
you've taken some time out of the workforce. Do we
need to top up our superannuation? Like do you maybe
(34:55):
want to save for a house and you haven't really
thought about that before. But you're like, oh, maybe I do. Actually,
we want to own a home by the time I retire.
It's like kickstart these conversations. Doesn't mean you need to
Renting for life is a very valid strategy, but it's
a strategy that needs a plan still. Yeah, so it's
not a oh I didn't think about it and I
ended up renting for life. We still need a plan.
(35:17):
We are making a financial plan irrespective of what our
goals are, whether you want to own a home or not.
And I think knowing this now to me is so
empowering because time is on your side. Most people in
our community sit between the age of twenty five and
thirty four. Go go look at your superinuation and make
(35:40):
small tweaks now so that we're not having big problems
down the track.
Speaker 2 (35:43):
Yep, yepkay.
Speaker 3 (35:45):
There are heaps of options as well. There are lots
of quick wins. You can log into your supranuation accounts.
You can go to your MiG of account and consolidate
your multiple subrounuation accounts. If you've got them, you're going
to save heaps of money on fees you could look
at the fees of your fund and do a little
bit of comparison. You can look at the performance of
your fund and pick one that's aligned to your values.
Speaker 2 (36:05):
I would make sure that you're doing a.
Speaker 3 (36:07):
Risk profile and actually understanding well, am I actually a
balanced super fund member?
Speaker 2 (36:11):
Or am I a bit of a high growth baddie?
Like what does that look like?
Speaker 3 (36:16):
And then you know, maybe let's say you're behind, well,
you could boost your salary sacrifice.
Speaker 2 (36:22):
Girl, that's pre tax like money win.
Speaker 3 (36:25):
You can play around with the calculators I mentioned earlier
to see what impacts additional contributions might be able to have.
You could make a plan to invest outside of superannuations.
So you've got another nest egg, We've got double You
could look at additional income streams that you could add
in retirement, like totally, what else are we going to plan?
Speaker 2 (36:46):
There's just so many things we could plan. And when
you have time on your side, we've got so much,
so much.
Speaker 3 (36:50):
And I just based on when I worked at superannuation
company two different ones. They always have their own like
financial advice, like general financial advice for free.
Speaker 2 (37:00):
You can just call up and say, hey, I want to.
Speaker 3 (37:01):
Talk to someone about if you don't understand risk profiles
and all that kind of one hundred superannuation company, if
you just call them and have a chat, they will absolutely.
Speaker 2 (37:10):
Help you and talk you through it. So and they
love that. Please call them already you love it. You're
literally paying them with your super fees.
Speaker 3 (37:16):
Yes, And if you call up and I just I
remember this from one particular place, I'm sure it's in
a lot of different superannuation companies. If you say I
would like general advice, and they put you through the
general advice team, the person who answered your.
Speaker 2 (37:26):
Call gets some sort of voters. I remember we got
like a gig guys. Yeah, they do so super fun.
You've everyone a bonus, you've ever had a bonus? Get
free advice? God win win. Okay, so this episode was
very numbers heavy.
Speaker 3 (37:38):
It was quite numbers heavy, and I am sorry. And
we'll probably do an Instagram post at the same time
as this goes out, So go check our feed because
all of those numbers and stats and stuff will probably
be on a carousel post for you if you want
more information. They will all be on the ASFA website,
which we will link in the show notes. And I
will also make sure that all the calculators that we
have mentioned are also linked in the show notes for you.
Speaker 2 (38:01):
God, she's good. God she's good.
Speaker 3 (38:02):
I feel empowered. Dare I say, oh, hey, yeah, so
I think this is a great place to leave it.
I do as well, and I'm glad that you feel
empowered as you should you.
Speaker 2 (38:13):
Queen.
Speaker 3 (38:13):
Look, super might not be the most exciting thing in
the entire world, or even something that's on your radar,
but like, congrats, queen, if you got through this entire
episode and you're listening to me saying this, like you
have done something for future you already. But it is
the quiet achiever. It is going to fund your bottomless
brunches when you're seventy. If you want to be that
(38:34):
seventy year old who you go wonder what she did
in the past life to be able to drink him
in Mosa at ten am, that's who I plan on being.
Speaker 2 (38:42):
Oh yeah, I want people to question what I did
with my life to end up.
Speaker 3 (38:45):
In the brunch location at ten am, drinking him in
Mosa And I guess that's the kind of long game
that we're all here for. And if you haven't already,
please hit follow tap subscribe, do all the things, because
we've got plenty more episodes coming.
Speaker 2 (39:00):
Are genuinely going to put future you in the best
possible financial position. We'll see you guys on Friday.
Speaker 1 (39:06):
Bye did buy.
Speaker 3 (39:13):
Shared on She's on the Money is general in nature
and does not consider.
Speaker 2 (39:17):
Your individual circumstances.
Speaker 3 (39:19):
She's on the Money exists fully for educational purposes and
should not be relied upon to make an investment or
financial decision. If you do choose to buy a financial product,
read the PDS TMD and obtain appropriate financial advice tailored
towards your needs. Victoria Divine and She's on the Money
are authorized representatives of Money Shopper Pty Ltd.
Speaker 2 (39:40):
A b N three two one IS six four nine
two
Speaker 3 (39:43):
Seven seven zero eight AFSL four five one two eight
gerln
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