Retirement Essentials recorded webinars

Josh
Hi, and welcome to this first webinar in our series, How to plan your retirement. My name is Josh van Gestel. I'm the Senior Manager of Education here at the Australian Retirement Trust, and I'm joined by a wonderful colleague and friend, one of the Education team leaders at the Australian Retirement Trust. Ruth, how are you?

Ruth
I'm really well thanks Josh. Great to be here.

Josh
Thank you. Great to have you here. Ruth and I are going to go through quite a lot in this webinar, but we're hoping that it will really help answer a lot of the questions that we've seen coming through that Ruth will talk to you about in one moment. But before we do that, I wanted to first make three really important acknowledgments.
The first is to all of you for taking the time to actually invest in your super, to think about your retirement, and to consider the opportunities that you can take to make the most of it.

I'd like to also acknowledge the traditional custodians of all the lands that we are joining this event from. But I pay particular mention to the traditional owners of these lands now known as Brisbane where we're broadcasting from the Jagera and the Turrbal peoples. There is a third acknowledgment, though, that we do need to make, and I'll hand over to Ruth to talk to you about it.

Ruth
Thank you, Josh. Now it's also really important to remind everyone here with us today that the information that Josh and I will share with you will be general advice only. And what that means is we're not able to apply that to your circumstances specifically. Everyone came here today with different reasons, different strategies in mind, different motivations, and different goals to try and achieve.

Bear in mind the content we cover will be very, very general. This is why it's really important to talk to your financial planner if you have one but also continue to read more information so that you are mindful of applying these general topics to your personal circumstances. Now, I'd also like to thank you all for submitting all of the questions that you submitted on your registration.

Josh and I spent lots of time looking through those questions for two reasons. Number one, to make sure that the information we are bringing to you in this event is actually the information that you wanted from us. So, thank you so much for helping us to shape this particular event. The other reason we'd like to look at those questions is to make sure that we are addressing some of the concerns and the worries that we know many retirees face as they're leading up to retirement.

So, I do assure you, lots of those questions will be answered as we work through the content. Now, we do have a team live with us here today, and they are looking at the live Q&A box. If there are questions that pop up throughout the session, please do put them into the Q&A box and you will very likely get a written response to that question where we can.

We will have time for some live Q&A at the end as well. So, we look forward to seeing your questions come through the event today. Now, as Josh said, today's event is about everything. It is a high-level look at all the things we need to be thinking about. As we are entering into and planning for retirement, we will touch on various different topics, maybe a little bit lightly.

That being said, there are three subsequent series that we would love you to also join when they are available, and that is where we will have a much deeper dive into some of the topics we discussed today. So, it is a great idea to start with this one. It gives you a little bit of a taste of some of the topics that are going to be covered in the next three series.

Today is all about understanding some of the key components involved when it comes to planning for your retirement, and the types of things that you need to be thinking about, and most importantly, the types of questions you need to be asking. So, what we're going to cover today is a little bit of an insight as to what retirement might look like.

It can be difficult for someone who's never really thought about it before, to visualise where the income will come from. How frequently can I get this income? How do I know how much I need? Things like that we're going to touch on. We're also going to talk about some myths that are out there. One of the most common ones being do I really need a million dollars?

We'll dissect that a little bit and hopefully put to bed some concerns you might have. We'll talk about some of the really important things that you can do now to what we say. Awaken your super. Or in other words, get that super really working for you as you're in those years leading up to retirement. And of course, we give you some next steps that we'd like you to consider doing as well.

Now, at this stage in your life, many of you are starting to think about retirement and very likely have had superannuation accumulating for you. Maybe in the back end and maybe not looking at it every day. But the reason you're here is because you are probably starting to think about retirement. And I want to remind you that the superannuation fund that you're partnering with and entering to retirement with can play a significant role in shaping.

Number one, how prepared for retirement you are. And number two, how you looked after during those retirement years. Not all super funds are the same. Ultimately, we're all trying to do the same thing, but we work in different ways. It is so important that you are comfortable with and familiar with your fund of choice. I would be fairly confident to suggest that for most people in this event today, the amount of money sitting in your super fund far outweighs the money that's in your bank account.

And for that reason, I want you to be very comfortable with who's looking after that money for you. So Australian Retirement Trust is a significant super fund in the Australian supermarket here in Australia. We have almost 2.5 million members. And for them we are looking after over $300 billion worth of retirement savings. Now, I'm not throwing those big numbers out as a flex.

They are very relevant. And the reason for the relevancy is that size and that scale gives us some significant advantages for our members, one being the ability to keep our costs really competitive. When you've got that number of members, that's good news for you and your retirement savings. The other reason that big scale that we have and enjoy is important to you as a member is because it gives us access to some increase credible investment opportunities both here and overseas.

That might be a little bit more difficult for smaller investors, and that translates back to you in the form of strong and consistent investment returns. And it's the investment returns a fund can generate for you that we shape primarily how prepared for retirement you are, but also how long that asset can last you during your retirement years. So please do hop on our website if you have any more questions, or you'd like to learn a little bit more about Australian Retirement Trust, I'd encourage you to do so.

We want you all to be partnering with us and be confident in that partnership. Now we're here today to talk about retirement, which is a huge chapter and an exciting one for many of us. Josh, where will we start? It's a big, big topic.

Josh Well, as you said, Ruth, it is an exciting chapter for many of us, but it is also one with a lot of anxiety. And that's where I want to start, because what we're wanting to do throughout this webinar is actually give you some assurance and give you confidence in where your retirement is or could go. And just in thinking about those anxieties for a moment.

Josh
We say that half of surveyed people do have concerns around their retirement, either that it's going to start getting further away from them, that they may have to work for longer, or that they're seeing the Age Pension age increase as it's done previously, for example. We're also saying that people are concerned about their own funding. Will they have enough to look after themselves?

But they're also worried about the support that comes from the government. Now, Ruth and I can't look into the future, but what we can do is give you absolute certainty of the rules, the conditions, the opportunities that exist for you today and how you can make the most of them. But let's just go a bit further to think a little bit about how your own circumstances, your own situation and your own needs might actually play into what your retirement will look like.

Now, Ruth and I'll talk about this quite a lot, that every person's retirement is completely different. What you need might be very different to a friend, to a sibling, to a colleague. And so, it's important that although sometimes it's easy to listen to others and to seek guidance from what others have done before us, that you take the time to actually think about your own situation and what we're going through in this webinar.

So the first thing is to think about when you might actually retire. And I think what we know is that many people will retire as they approach 60 or 65 or even into their 70s, as this chart shows. But what this chart also shows is that for the vast majority, really up until the age of 60, if they're retiring early or earlier, then the norm, they are usually doing so because of circumstances that have been thrust upon them.

People retiring early are usually doing so because of health issues they have, health issues, of a partner or an older parent, or also due to changing circumstances with their work. It is only later in their life as people entering into their 60s and then into their 70s, that we say people are retiring for their own reasons, that people are retiring because that's the decision that they've made, not that's being forced upon them.

Now, this isn't to try and throw you off if early retirement is in your planning, but it's just to try and show that for many of us, retirement can come unexpectedly and we do have to also be prepared for it. The other key consideration, though, isn't just when you're choosing to retire, but thinking about how long that retirement could possibly go for.

In my own circumstances, I've got two parents who are now in their 90s. I've got aunties who are about to turn 100. So, I have to assume that based on my own family history, that I am going to have a long, hopefully and healthy life. So, when it comes to me thinking about my retirement, I should also be thinking about how long I may need to plan for.

Instead of thinking about living to life expectancy that may be in my early 80s or mid-80s. I have to really be thinking around. The retirement for me. May be well into my 90s, and that needs to be considered in the funding that I take. So the important thing for you to do is to really consider the income needs that you have and what your situation is that is different to others.

And this really is an individual and personal discussion that you have to have with yourself or in seeking guidance on your income will be determined, or your income needs in retirement will be determined on firstly by your situation. Are you a single person or are you part of a couple? If you're part of a couple, that means that you can share costs.

It means that you're sharing, electricity bills, utilities, internet. It also means that you're sharing groceries. It means that you don't have as much in terms of costs as you would as two separate individuals. The second thing you need to consider is your needs. And some of this I've touched on. If you're going to live much later in life, for example, as I know based on my family history, I might have to really think about the medical expenses that I will be facing later in my life.

Josh
You might be someone who has worked in physical labour all your life, and you might be actually taking some of those medical needs early into your retirement. Or you may, as we're saying, for many Australians now entering retirement, but going into retirement, carrying debt, even a large mortgage. These are all needs that you need to make sure when you're thinking about your retirement income that you are planning for and expecting you were going to need to cover.

Now, I know it's all sounded a bit negative to this point, but this is the positive element. The positive is then thinking about, well, if all those needs are looked after, if those circumstances are dealt with, then what is it that you want from your retirement? What do you want your retirement doing for you? And this is where you really do think about things like whether it be, holidays overseas, or things you'd be liking to do for your family or with friends.

What are those things that don't just get you through life, but that you'd like to do to really enrich your life further? Now, as part of this webinar series, you've got access to a workbook, and on page six of that workbook, we actually go through some thinking that you maybe one to consider in applying these to your own circumstances and situation. But before we go a bit deeper into all of that Ruth, maybe we talk about now that we're getting an idea of the income we may need. How do we actually just go about paying for it?

Ruth
I think this is a really important, piece of planning for retirement is really understanding and thinking about where is the money going to come from week in, week out. And that's going to be very different for everyone here today. There are going to be various different sources of income that you'll be able to generate throughout retirement. Superannuation may only be one.

So let's have a little look at what the possible sources of income might be. First and foremost, you may be somebody lucky enough to have assets outside of superannuation, which can generate some kind of income during retirement. The most common example I can think of here is, for example, an investment property. Or maybe you've just got a little bit of cash sitting in the bank that you've held on to, that you can actually fall back on and spend a little bit of each week, whatever the situation for you is.

Ruth
We do need to factor that in when we think about where some of the income is going to come from. The other thing to then think about is your superannuation and the amount of superannuation you need, and the amount of income you need to come from that source, will actually depend an awful lot on whether you have any other income sources and how much they might be.

So, for some people here today, you may not have any personal sources of income, in which case the role that your superannuation needs to play will be much more significant. And for some people who have ample assets outside super, the role that their super needs to play will be a lot less significant. And in other words, they'll need a lot less superannuation. So, we do need to step back and think about the fact that super might only be one source of income. The other thing to bear in mind is that there is a safety net in Australia called the Age Pension, and the Age Pension will do a lot of the heavy lifting for some Australians who may have very little assets of their own to fund their retirement.

Now, the difference with these sources of income can be when they start to kick in or when you can receive them, you'll see a little red dot there over the top of the superannuation arrow and it says 60. And the reason for that is your superannuation can be accessed from the age of 60. So if you are needing to trigger that source of income at age 60 or beyond, it is something you can think about doing 67.

On the other hand, you can see over the Age Pension, and the reason for that is that you cannot factor that as a source of income to your household until you have reached the age of 67. That is age, pension age. So, what we're trying to do here is think about if I'm going to retire before 67, where's the money going to come from?

Primarily super in your own assets after 67. Then will the Age Pension play a little bit of the role here for me? So, if we think about the Age Pension I mentioned, it is nothing but a safety net and it will do a lot of the heavy lifting for many Australians. What you can see here are the current Age Pension entitlements for a single Australian, and also what it would be worth for a couple in Australia.

Now bear in mind that those rates will change regularly, and they are always updated on the websites. But what I do want to remind you of is if you cast your memory back to the slide just shared where we talked about income needs, and Josh specifically called out needs and wants. What I often try to say to people is the Age Pension was only ever designed to fund needs.

It is not really going to generate enough income for any single person or any couple in Australia to be able to play around too much with what you want to do in retirement. It is a safety net and it will do the bare minimum for you. So, who receives it or when can you qualify? Number one, the most important thing to do is reach Age Pension age, which is currently 67 or above.

And you also must have been a resident of Australia for at least ten years. If you take both of those box boxes, you can then move on to the next stage of determining whether you qualify. So, what will happen is Centrelink will apply two tests for you to determine whether you're eligible to receive some or all of the Age Pension.

So, they will apply a means test both income and assets. Now when they look at the income, they will say you can generate a certain amount of income per annum before will start to reduce your entitlements. And of course, as you can see here, it's different for an individual and a couple. And it's only when you go above that threshold do you start to see the impact your entitlement is.

They'll then apply an asset test. And the asset test is looking at your current assets. And again there are amounts here. If you are a single or a couple you can see the thresholds. If your total assets excluding your own home by the way, are under those values, you may very well find yourself qualifying for the full Age Pension above those.

You might find that you're qualifying for part and of course is a maximum as well, which is all available for you to view on their website. Unfortunately, we have a little bit of a joke in the system. They do actually give you the worst result. So whatever pension entitlement is the lowest under both of those tests, the means test is what you receive.

Sometimes we say that's why they call it the mean test. Now there is a little concession available as well. The concession card is really something to be mindful of. If you do not qualify for the Age Pension, you may still very well qualify for the Commonwealth Seniors Health Card, which can actually allow you some further concessions that you could you should be able to pick up, regardless of whether you've, failed the means, test the assets or the income test.

There is a third test for that Commonwealth Senior Health Care Card, and it's a much more generous testing system where the majority of Australians will qualify for that particular card. Now just remember this is designed to fund your wants, your needs only and doesn't really factor in your wants. Your wants are very often funded by your super. And that's the beauty of super.

It's giving you the flexibility to be able to talk, not just what I need to survive, but what I want to do. Unfortunately, despite the important role super plays in generating this income, many of us still don't really understand the fundamentals of us. Our own research tells us that almost two thirds of Australians don't have a strong understanding of how super works.

Let me give you a very quick one on one session. There are two types of super funds in Australia which you might have. The first, and probably the more older type is called the defined benefit. The defined benefit type account is really designed to look at your years of service with your employer and your income, and it's worked out under a particular formula.

You are not subject to market movements. You are not subject often to fees and things like that. You're very much subject to a formula based on how long you've been with your employer and your income. It's an older type model and very rare now for anyone coming through to have one of these. These are generally the types of accounts that you would have held for quite some time.

Most of us, myself and Josh included, are using what we call the accumulation accounts. These are far more common these days, and the majority of Australians will have an accumulation account. This is designed very like a bank account. In other words, contributions will come through into the account from your employer. Those contributions will then be invested and earn returns for you.

And it has a beautiful compounding effect. However, there will be debits and the debits will consist of things like administrative costs, maybe insurance premiums, etc. but at the end of it, what we see is the benefit or the balance. So what you can see is the accumulation type of account. Have a few other things to factor in fees, costs, investment, earnings.

And we are very reliant on what's going into the account. The defined benefit accounts are slightly different. Many defined benefit people also have an accumulation account. So still very relevant. Now the fundamental contribution that's coming into our account and what's feeding into the system is what we call the superannuation guarantee. We call it SG. That is of course the money that is coming into the account from your employer.

And for many Australians, the only money coming into the account right now, the SG or the contribution rate is sitting at 11.5% of your income. What that means is whatever your income is, you're also receiving an additional 11.5% into your superannuation account that we move to 12% from the financial year 25/26. So this is what's making up the bulk of the money entering the system into our superannuation accounts.

And as I said, it is then invested. And we're going to talk today a little bit about how that's invested and what role you need to play. Now that accumulation journey is the longest part of your superannuation journey. Very often, if you think about the average 18-year-old who is starting out their careers, maybe their part time jobs, they are getting a superannuation account and getting these contributions put in.

These contributions are then invested for potentially forty, fifty years before they ever get to retirement, if not more. So you're accumulation journey is the savings part. This is where we're preparing the balances and trying to maximise every opportunity to boost those balances. There is a little part in the middle of your journey, and many of you today may find yourself sitting in this stage, and it is called the transition to a retirement stage.

It is applicable for anyone between the age of 60 and 65, and this stage opens up opportunities for you to continue to contribute super and into superannuation. Continue to work. But it also just means you've got an opportunity to potentially access some superannuation. We have a wonderful module which goes into a lot more detail on transition to retirement.

So please do register for the Pay Yourself in Retirement module and we'll cover this little stage in a lot more detail. But it is an area and the stage of your journey. You should be very mindful of what the ultimate goal is the retirement stage. This is why we have superannuation and that is what we're trying to get you.

To maximise your balance for the retirement stage. As Josh alluded to, can vary in length depending on when you retire and depending on your life expectancy and how long that money needs to last you. There are so many factors that can determine how long this will last. One being the amount of money you have when you get there.

But there are other things at play, like for example, how that money is invested leading up to retirement. Now, before I come back to Josh, I do want to talk to you a little bit about this. One of the most common questions we get is when can I get my superannuation or when can I start to access? And the simple answer is 60.

Once you get to the age of 60, there are some, shackles removed if you like, from super. And there are opportunities. One of which is the transition to your retirement account. If you're still working, there will be some availability of your super funds to draw down. However, if you have retired fully from the age of 60 or beyond, you have full access to your superannuation.

So, anybody here who is 60 or older or close to and you're thinking about retirement, your superannuation is fully accessible. And the wonderful news is it's tax free because we don't want to be tanked paying tax on this after the age of 60. So, this is where you really need to be thinking about. Just because I can doesn't mean I should.

So, what does that mean if I do start to access super. So yes, the shackles are starting to remove from the age of 60, but that doesn't necessarily mean it's the right move for you. Once you get to the age of 65, however, regardless of whether you're still working or whether you're fully retired, you have full access, full tax-free access that is to your superannuation.

And the way in which you take that out of the system is up to you. And there are lots of different ways you might draw it down. Again, join us in series three and we'll go into much more detail on accessing superannuation, and paying yourself during those retirement years. Now, I mentioned that that the accumulation journey is all about maximising your super balance so we can let it last as long as we can during retirement.

And the question we often get is, well, what balance should I have? Is it true that I should have a million dollars?

Josh
Not necessarily, and probably not would be my answer to that question. And it's funny, you raised that, I've actually seen a couple of questions almost to that point. Coming in through the chat, the answer to this is that the number you need for retirement is actually going to be different for every single person, as Ruth and I've already been talking about.

And it's really important for you to think about what this number will be for you. It may be far less than $1 million. It may in fact be far more, but what you've also got to take into account as Ruth has outlined is how much of this may actually be supported by the Age Pension, or how much might be supported by your own investments, including super.

And the reason why it's different for every individual is as we’ve been talking about every individual's needs and wants will be different. So where do you actually start? There's a couple of really great ways, depending on what your preferences is, as to how you can think about how much you might need to fund your retirement. The first is what we call the two thirds rule.

When it comes to income that you need two thirds in retirement of what you earn today and that difference, that other third is really what you pay in tax. Remember, as Ruth said, certainly with your superannuation that that benefit is paid to you largely tax free. And you do say that the tax you pay in retirement from other sources, including age, pension and investments, probably be far less than you would be paying during your working career.

So that's the first rule of thumb. Two thirds of your current income might be what you expect you need in retirement. But if you want to dig a bit deeper, which I would really suggest you do, the second approach, if you're a numbers person, is to think about preparing a budget. And I'd really strongly suggest to you that with that budget, you think about both your needs and your wants.

What is it that's coming into your account and what is the you want that you also have going out? The third and I'll talk to this in one moment, is what we call a lifestyle guide. And there's different ways that these are produced but we're going to talk today about one that's produced by ASFA the Association of Super Funds Australia, which gives you some really clear ideas as to how much you might need for different types of lifestyles in retirement.

And the fourth and final, which we will cover off and which many others super funds also provide, is a retirement calculator. You can put in some basic information and it will provide you an indication as to how much you may need for retirement and how much income that may generate for you. So, what are the different lifestyle options that are available?

Well, I'll go back to something that Ruth was talking about with the aged pension in thinking that it really just covers off your needs and it is a safety net. And this is where your lifestyles in retirement really starts this budget retirement lifestyle is completely funded by the Age Pension and this is for a lot of people.

Their reality this is the reality of my parents, for example, who didn't have the benefit really of a mature support system in their working lives. But the reality for people who are dependent fully upon the Age Pension, like my mum and dad, is that it doesn't give you a lot of room to move. If emergency or other issues come up.

And I'll admit that in my own parent’s case, they only survive well on the Age Pension because they've got five kids to really help them. So, then it may be thinking about, well, especially if I don't have those children to support me. How do I think about supporting myself beyond the Age Pension? And again, remember what Ruth was talking about, that superannuation starts to give you real access to think about those wants that you have in retirement, not just the needs.

What is it that you want to do in your time off to work? So, for this modest retirement, you'll save that a lot of your income is going to be provided by the Age Pension but will also be supplemented by superannuation or other savings. And this will give you a lot more flexibility. It will allow you to think more about your private health insurance.

It will allow you to look after emergencies as they come up. It will also allow you to think a lot more about leisure pursuits and activities, including things like domestic holidays. But where we're all probably aiming is thinking about a comfortable retirement and a comfortable retirement is one where you're going to have income that will really allow you to be largely independent.

These income numbers might be partly funded by the Age Pension, or they may actually not be any Age Pension involved. But this is where you can say that your needs are being looked after, but you are absolutely also getting your wants, your desires for retirement looked after as well. You have to think about which one of these lifestyles might be appropriate for you, or which one you want.

And Ruth and I will talk through the rest of this webinar about where there are times where you may be have to think about, or have some decisions about what happens if that lifestyle you want necessarily isn't necessarily one that you're on target for. But let's go into a little bit deeper in now that we know your income that you may be aiming for.

How much do you need to fund it? And again, you can see here that we're showing two very different figures between a modest and a comfortable lifestyle. Remembering again as I've just explained that a modest lifestyle, that income is to a large extent probably going to be covered by the Age Pension. It's not a lifestyle you need to actually contribute a lot to.

A comfortable lifestyle, on the other hand, is one where your superannuation and your other investments are going to be really important in supplementing whatever part Age Pension you may receive, or remembering that you may actually not, depending on your circumstances, receive any Age Pension in this case. So, this should actually put to bed the fact that you don't really need $1 million, but a lot of it's going to depend on how you think about your income needs.

And as we've said, your income what wants. So, before I hand back to Ruth to dig a little bit deeper into what we can do, let me just give you a bit of a case study, and this is using our retirement forecast. You might remember me mentioning a couple of slides ago that you can use a retirement forecast.

So, there's one on our website. A lot of other superfans also have one to get a sense by answering some very simple questions, to get a sense as to how much income you may be ending up with in retirement, and what balance you'll have. So, let's assume we've got a couple here. We'll call them Jo and Rob. And they're aged 60 and 58, and they've got a combined income of $120,000 and total super savings at the moment of $100,000.

They are saying that they'd really like to have that comfortable lifestyle in retirement. And what that really means is that they'll need that amount that I'm showing on the bottom of the screen here. That will give them that comfortable income in retirement. So through our retirement forecaster, we add some basic information and answer some simple questions, as I said.

And it's then going to give us a result. We've got the target income they’d like from now through to their life expectancy and beyond hopefully. But what we see as we play this out is that in those early years, the youngest spouse will have still some employment income coming in. The oldest spouse would have retired, but they'll start to be accessing income from their super.

Okay. So, you've got within the couple dynamic here, some income coming in from employment, but also a lot of income starting to come in from super. From the age of 67 you can also see some Age Pension coming into this. And as they both move into retirement, that Age Pension will become a bigger part of their income mix.

But what you can see here is a couple of things, or two things I want to call out in particular. The first is that that target income they want isn't really being achieved, for the rest, for the rest of their lives. In fact, in some years it is being considerably underachieved. The second thing I'd call out is that in this scenario, they are almost completely dependent, certainly from their late 70s on the Age Pension.

That means that their needs, as we've talked about, may be covered, but it may be far more difficult for them to look after any wants that they may have, or also any emergencies that may emerge. So, they are a far way off of actually achieving that outcome they’d like so what do you do if you don't have enough?

The first is that you actually reassess your goals. Are they higher or more extravagant then perhaps you can afford? Do you need to bring those goals back a bit? Do you actually reassess your income needs? Okay. Do you think about how much you may need, how the Age Pension may come into it? Do you need to think about working for longer?

And by that, pushing your retirement age back. You also need to think about and this is where Ruth and I are going to spend much of the rest of the session. And I'll hand to Ruth in a moment, what you can do with your savings to progress your super in particular, further to work harder for you. So, there are two things we're going to unpack.

The first is how you can really make some simple steps with your super through bringing it together, and also through making extra contributions to grow that balance as much as possible before your retirement. And the second thing we'll be considering is how you look at investing your super, both as you enter into or leading into retirement, but also how you should still consider investments throughout your retirement years and journey.

So, to start and to talk about that first one, I'll hand back to Ruth.

Ruth
Thank you, Josh. So, we have seen lots of questions coming through. Thank you so much. And the team are doing a great job in the back typing answers to some of those. There's been 1 or 2 that I've picked up that I'm going to cover at the end. As well. So, bear with us. We are now going to talk about some of the simple steps that you can take to maximise those superannuation savings on your path into retirement.

The first thing I want to say is please don't be despondent. If you come out of using a forecaster tool and think that your goals are out of reach, it might just need some subtle tweaking. There might still be things that you can do that really impact the results that you can get. And we're going to show you some of those things that the couple Josh talked about earlier on how they were able to really change the dial on their outcome by implementing some small strategies.

And we're going to talk about those now. Firstly, though, a little bit of housekeeping with your super. I mentioned, if you remember back at the very beginning, that the accumulation stage of our journey is when we are getting contributions in from our employer, and it's often the time where we're least connected with our superannuation, unfortunately. And what can happen sometimes historically, is we move around employment.

And it may have meant that we picked up more than one super fund during our journey. If that is you, please stop and just reassess whether you still need to hold multiple accounts. I generally have a rule of thumb with holding multiple accounts, and that is that if if you don't know why you have multiple accounts, then I would suggest you may not need them.

Multiple accounts often means having multiple fees and potentially even duplicate insurance costs being debited. One of the easiest ways to bring your superannuation together is through your online access, and you might have seen there earlier on. Get connected. Every single step that we talk about implementing you can do through your digital assets, whether it's combining your super, whether it's making contributions or whether it's looking at investing.

All of these actions are very often implemented through your online portal or your access through the mobile. So please do make sure you're connected with your super. I would be alarmed if there was anybody in this event today that couldn't look at their bank account at the drop of a hat and and have a look at their immediate balance.

We should be able to do the same with their super. So, step number one is to think about bringing those accounts together whereby that makes sense for you and really simplify your own administration when it comes to superannuation. So obviously consider the fact that when you close a superannuation account any benefits you had like insurances etc. also stop.

But the ultimate benefit of having everything together is ease of admin, but also the reduction of potential costs with administering your super. So that's step number one and many of you have done it. I call getting connected and bringing your super together the housekeeping. Now let's move into the strategy. This is where you've got everything where you want it to be.

You're happy with your fund, you're connected, you can see it. Now we're going to talk about getting money into your superannuation account. There are two methods. And I talked about the main one already, which was the money coming in from your employer. This is called a concessional contribution. And the reason it's called concessional is because it's taxed at a concessional rate of 15%.

Now, 15% tax is probably far friendlier than the tax rate that many of you are paying, during your working life. And that's why we have the word concessional on there. So SG employer contribution I mentioned earlier is taxed at 15%. If you're looking at your statement or you've logged in online and you see a tax number, that's what it is, what it is, the 15% we must pay to the ATO on those employer contributions.

Now you can also enjoy that 15% tax bracket and make your own contributions under that concessional method. There are two ways you can enjoy that 15% tax bracket. Number one is through salary sacrifice. This is an arrangement that you would organise with the payroll of your employer. And you would say, please redirect some of my pretax money into my superannuation.

I'd like to enjoy some of that 15% tax bracket as well. Another way, if you don't have a payroll or you maybe missed the boat on it and you have money sitting there and you didn't know about this opportunity, you can also put money from your bank account into your superannuation and then claim a tax deduction on it.

That's really your own way of salary sacrifice. The method that most self-employed Australians have used for many, many years. But now it's an option for all PAYG workers. So, the money from the employer, the money that you salary sacrifice through your payroll, or the money you put in from your bank account and then claim a tax deduction, all make up the concessional contributions.

That's the good news. However, we need to be very careful that when we have a good thing, it's usually limited. So, we are maxed out and a limit of up to $30,000 per person per annum. And that includes all the three types. Now there is a caveat to the rule. So, the $30,000 is in relation to the existing financial year.

However, the government recognised that maybe we weren't always able to reach that in previous years. And in some cases, where your balance is under half a million dollars, you might be able to use the unused amounts from previous years. We'll talk a lot more about that particular strategy in series number two, which is growing your super. So, if you have the ability to put money into superannuation, I would strongly recommend you hop into session number two where we'll cover this in a lot more detail.

Now, the second way of getting money into the system is called after tax or non-concessional. And the reason this is called non-concessional or after tax is because it exists of money that is already in your bank account and therefore you've already been taxed on it. That then can enter into the superannuation as an after-tax contribution. The government recognises you've already done your fair share of tax on that.

They are not going to tax you on that contribution going into super again. Okay. Now you might have two reasons to put that in. You might have money in your bank account and you might just want to contribute it. An example might be maybe you've got some savings that you now want to invest. Maybe you've received an inheritance, or you sold an asset.

There is a way you can put money from the bank account into super. Or maybe you've got a spouse and you'd like to put some money into a spouse account. Again, there are reasons you might want to do that. We talk about them in series three. That being said, this is a far more generous limit. It's up to 120,000 per person per annum.

Now you can use three years’ worth of this limit. So, in this one we're looking forward in the concessional one we're looking back. This means we can use future years to get additional money. And so, there is a much more generous limit here. The reason for that I think, is obvious. The government have already had their tax on that money.

So, they were allowing you to get a lot more of this type of contribution into the system. A common question we get from this one is, well, how do I do this? This is going back to get connected. When I told you earlier on that almost every move you make with super can be done through your portal online or through your mobile app.

This is one example. You will see your BPay and your reference number in there and it is a simple bank transaction. That's why getting connected is so important. Now the after-tax method of getting money in is also used for people who may be entitled to pick up some government incentives for contributing money into super. These are generally lower income earners.

If you're in a household where there is a low-income earner and by low-income earners, we're talking people and sitting at income levels, usually under about 50,000, give or take. Get onto the website and have a look at all the criteria. But there is a contribution incentive for low income earners to put money in this way and receive what we call the government co-contribution.

So, if you or someone in the household is a lower income earner. Have a look and see what the best way to get money into this system is for you. Again, we go into a lot more detail in session number two. Now there's an exception to the after-tax contribution. Or rather than the word exception, maybe another additional amount that you might think about contributing.

And I did see 1 or 2 questions on this come through in the pre-submitted. And this is about the downsizer opportunity. And effectively, what that means is the government recognises that there are ample amounts of housing out there where there is lots of empty bedrooms. So, these are the empty nesters who are now sitting in four- and five-bedroom houses, who really can't use that to their benefit.

And it's giving an opportunity whereby if you are thinking about downsizing your home, you are giving an additional amount of 300,000 that you can contribute into super. You can consider doing that once you're aged 55 or above. And what this does is allow you to be more prepared for retirement while also considering downsizing the property. Now, again, like all things with super, there are eligibility rules to be mindful of.

Lots of great information on our website on this. So, if this is something you're thinking about, please do read up about it. There is one big red flag I generally say for individuals who are thinking about this and that is that it may impact any Age Pension entitlements you might have been qualified to receive in advance. And the reason I say that is because I might have mentioned quite quickly and subtly earlier on, that when this Centrelink are assessing you and they look at your assets, your home is not assessed as an asset, okay.

It doesn't matter what it's worth, your principal place of residence is not an asset. As soon as you sell that and you've got proceeds from that and that additional 300,000 that you might put into super is now an asset. Just something to be mindful of and really highlighting the reason why seeking financial advice before you make big moves like this is so important.

With superannuation, these strategies can look very attractive and can be a very clear purpose in your mind, but it can be something that can backfire and have negative results if all things are considered. I often say it's like medication. We all know what the particular medicine is designed to do, but some of us might actually have side effects that we didn't foresee.

And that's why we need to be really delving into the personal aspects behind these. So, this is contributions. As I've said a few times now, we do talk a lot more about this in session number two, if you have cash or you've got the ability to make contributions into your super and really boost that balance in the years leading up, hop into session number two and we'll go into a lot more detail on them there.

So that strategy number one, can I get money in. Can I get a bit more in. And what's the best way to get it in session. Strategy number two rather is what happens when the money is in there.

Josh
That's right. But before we do come to strategy number two, I just we've had a question coming from Ian, and so I think this is both just something we can clarify but also reinforce. Ian had actually asked, can I use proceeds from the sale of my home for contributing when you have just covered that. But he's also said about, if I put inheritance in, will that be taxed?

So can you just clarify in Ian's case, let's say he does receive an inheritance. How would he go about contributing that and not having tax apply to it?

Ruth
I think the simple thing, Ian, is to recognise that when you're making a contribution into superannuation, you'll notice that nobody's asking where you got the money. So, we're not asking you to disclose, has this come from an inheritance or the sale of a property or the sale of an asset? Effectively, if the money is in the bank account, regardless of how or why it's there, there is an assumption you've looked after the tax to that already.

That can then be contributed into superannuation. Subject to the rules that I talked about, the 120 per annum or the 360 over the three-year period. So, I think to put to bed a lot of those questions, we get them a lot about inheritances. When you make the contribution. We're not asking where the money came from. So, the fact it's an inheritance is actually irrelevant.

Yep.

Josh
So, as Ruth said, we will cover that off more in session two. But a great question that's come through. So, as Ruth said, strategy two is, well, once you've got the money in super how do you grow it further? And the truth is that it is your investment performance on your super over its life, including when you're in retirement, that does most of the heavy lifting for you.

If you actually went and looked at your superannuation and added up all the contributions you've received over the years, you'd see they'd only be a very small part of your overall balance. Generally, what for most of us, you'd say, is that the investment earnings that you've made over those years is actually what forms the bulk of your money.

Now, we know, though, that investing again, going back to something I said earlier can be something that causes anxiety. It can be something that causes concern. Superannuation, though, comes with one really big advantage, and that is time. So, although you might be thinking that you're going to retire in a couple of years, the reality is that your super is still something that you may have for a few decades. Your super is also something that you've potentially had for 20, 30, even 40 years or more over that long time period.

And the advantage that's afforded you is, although in that period you would have seen and you will yet say volatility or market downturn or market upturns, and you'll know that it smooths out that ride over time. So, it then really comes down to a few questions for you. How long do you think you'll need that money for before you really want to start accessing it?

And that might change some of the way you think about your investment. So, I'll come to that in a moment. The second thing to think about is although I said a long time period smooths out volatility, it is still something that some of us feel really anxious about. And we're not suggesting for a moment that you invest your money in a way that makes you lie awake at night.

In fact, our chief economist often says that the best test with your super and with how it's invested is can you sleep well at night? If you can, you know, it's invested in the right way for you. But you need to think about volatility. If the markets are going up and down are you ok with that, knowing that it's giving you a long term return, or is that something that's really going to bother you and keep you awake?

The third thing for you to consider beyond time and that volatility you're comfortable with, is what level of engagement do you want to have with your investments? 90% of our members certainly in accumulation accounts, 90% of our members really don't change their investments day to day. 90% of our members are invested the way that we have invested for them.

But there is that 1 in 10 people who really likes to be actively involved in the way their money is invested and what it's doing for them. You need to decide which one of those you are based on. The three of these will determine the level of engagement, awareness, activity, and comfort that you need to think about with your investment, some of which I'm going to go through now.

So, as I said, we do have the advantage with superannuation of having a long-term investment horizon. And this means that we can get some really great benefits. But it also means that, as I've already talked about, you may have to ride out some periods of volatility in order to achieve those returns. What do I mean? Well, if you look at the far left of this chart, you can say that we've got cash there.

And this is traditional cash investments and fixed interest investments or bonds that we know generally don't have a lot of volatility and fluctuation, both in the short term as well as the medium and long term. These are amounts that, you know, if you invest in that, they'll stay pretty safe, secure and stable more or less. But the trade-off is that they returns to you will possibly be quite low.

So, in order to get higher returns, you do need to take on a higher level of risk. And that's where you might consider investing things like in infrastructure, alternative investments, which I'll go through in a moment, or shares or even thinking about property. Investment assets that we know will go up and down, but also over the long term, tend to give stronger returns as well.

You have to decide the trade-off that you have between the return you want and the comfort you need. So, at Australian Retirement Trust we invest in all of these investments for you. If you've never made an investment decision with your account, you're likely when you log in as Ruth has suggested, to see that about probably 40%, perhaps even close to the 50% of your account balance is in shares.

Unless you have chosen to invest a different way. And those shares will be both here in Australia as well as shares owned globally. As I've already mentioned, the great thing about shares is that we know over the long term they do give a very strong return historically, certainly, but what we also know is they come with great short-term volatility.

And we've seen a lot of that in markets, particularly since the Covid pandemic. So, to try and balance out some of that volatility is where we also invest our members in cash and fixed interest. And if you've never made an investment choice, you will see that we do automatically put some of your money here to try and balance out that volatility that occurs day to day.

But the reality of these two traditional areas of investing is that, firstly, as I've already mentioned, cash doesn't tend to give the returns our members demand. Members want more than 1, 2 or 3% returns that these are often deriving certainty as we came out of the pandemic. The other thing is that when it comes to shares, they quite concentrated, particularly here in Australia.

So we have to look for investment opportunities far beyond that, especially as rates said, being a very large fund, it does give us the ability to go out to market and look for other opportunities for you that you may not be able to access individually. And these include things like infrastructure, roads, rail, airports, but also renewable energy production or even digital warehousing.

These are emerging technologies as well as those traditional infrastructure assets that you would know very well. The advantage of these is that they don't just give us access to the capital value of that asset, but they generally also provide an income. Think of a toll road or an airport, for example. We also invest in hundreds of thousands of properties commercial, industrial, residential here in Australia, but also globally.

A lot of people are very attracted to the idea of investing their super in property but if you were doing that individually, it often means you were putting all of your money into a concentrated property and taking on all of that risk. It also means when you need to access that money, it's very difficult. You can't just sell a bedroom, for example.

So, with a large fund like Australian Retirement Trust, we invest in hundreds of thousands of properties to achieve a great outcome for our members. And then we also invest in what is called private equity. And this recognises that two thirds of all large companies globally are not invested or not listed on the stock market. They're actually privately owned, and we want to make sure we've got access to them.

The other advantage of them is unlike the share market, which goes up and down very much based on the whim of investors minute by minute or day by day. Private equity tends to be a little bit more immune to that. So, we invest in large companies here in Australia and overseas that are not accessible on the share market, and these have provided us with some incredibly strong returns for our members.

So, when it comes to how you want to use these, you have three choices. The first is like the 90% of members I referred to that have chosen to do nothing with their investments in their super. We will choose for you and the default option is our life cycle or lifetime investment option. And that's where we will actually manage that investment for you over time.

You may actually decide you want a little bit of control, but not too much. And this is where you can come in to our purpose built diversified options, different options that give you access to a range of those assets that I talked about, and these include our high growth option, which has a large exposure to things like shares and property and private equity, right through to our more conservative options that have a higher exposure to things like cash and fixed interest.

The other choice you can make, though, is to say, well, maybe I want some money in those things. Maybe you don't. But what you may want to do is actually choose specific asset classes you want to invest in, in effect, making your own investment portfolio, deciding what exposure you want to Australian shares or what exposure you want to property or diversified investment options.

You basically construct the portfolio that you want. All of these, as I said, will be influenced by the engagement you want. They will also be influenced by how you feel about investing and also how much control you want to take on. So just very quickly, as we do cover this more in future sessions that we're providing. I just wanted to highlight some of that mix always referring to.

And these are four of our main diversified options. High growth on the left through to the conservative balanced option on the rise. And what you can see is that high growth option, as I talked about, has a much more significant investment in things like shares and alternative investments. Whereas going over to the right, you can see that conservative balanced option has a much bigger exposure to things like cash and fixed interest.

You can expect generally that the investments on the left will have more volatility but provide a stronger return over time compared to those on the right. But the long game is what you need to think about. Even if you're entering into retirement. Remember you've still potentially got 20 or 30 years ahead of you. What I'm showing here is if you have invested $10,000 and just had it pegged to inflation, what is that money going to be worth to you over time?

And you'll see here that over about 20 years, the value of that has not quite doubled. So, if that's your cost of living that you need to invest beyond, you need to actually have investment performance going higher than that. What do those different options I just showed you give you this is that same $10,000 without additional investments going in.

Additional contributions going in over a 20-year period where it would be at the end of 2024. This is our balanced option, our balance risk adjusted option and our conservative option. As you can see, all do suffer volatility but to far different extremes. And if I can highlight for you just some moments in time, you can say right back in 2008, 2009, the financial crisis, the global financial crisis, I can well remember how big that felt.

But on this chart, it actually looks far smaller. Or if we move through to the early 20s, you can see the downturn that that was that forced financial crisis from Covid. But you've seen incredible growth in the years since this is why it's really important that when we talk about investing for super, we do have to have a discussion about the importance of long term and volatility.

So, let's go back to Jo and Rob, who I introduced to you earlier. And then I'll hand over to Ruth to go through a few things and to start wrapping it up. But what we've got here is a revised plan where Jo and Rob have decided to actually change their investment options and to invest in a more aggressive investment option.

They've also made the decision, which I understand in times like now, where cost of living is difficult, but they've made the decision to actually start investing some of their money into super to take advantage of some of that, those tax advantages and opportunities available to them. If we play out that same retirement forecast for them. What we're saying is that now they have a far less, far less of a dependence on the Age Pension.

It's still there. It's still very much a part of their investment mix and their income mix. But you can say that they now have so well into their 90s. That gives them that flexibility, that freedom, that choice. And it also means that should something occur or should I want or desire emerge that they want to follow, they have that opportunity.

So, superannuation isn't necessarily talking about giving you complete financial independence, but it is absolutely talking to how you can get flexibility and freedom. For many of us, in addition to the Age Pension. So, the last thing I would give you to think about, and then I'll hand to Ruth, is to really explore investment. So, this scenario that many of us feel anxious about or uncertain about or confused by, but our website gives you some great resources and information to assist you.

It also gives you access to our investment profiling tool that allows you to understand how you would deal with different levels of volatility and what sort of investments you may want to consider. On that note, I’ll pass to you.

Ruth
Thank you. Josh, we are almost at the end, but I just wanted to give a little bit of a recap on what we have done with regards to the simple steps that you can take, regardless how close to retirement you are. So, remember to look at the retirement calculator. This will give you a good insight as to how prepared or unprepared you might be when it comes to your superannuation balance, and whether you're on track to do what you want to do.

I talked about the benefits of bringing your superannuation together, not just from an ease of administrative perspective for yourself, but also because of the potential cost savings that you might have when you bring all of those accounts together. Think about making extra contributions into your account if and when you can but also think about the best way to make those contributions.

We do have a wonderful calculator on our website. If you just go to the main page and type in contributions calculator, it will really help you and prompt you to look at your situation. It uses your income and it will give you a little bit of a sense as to which method might give you the greatest benefits of getting money into the, into the superannuation system.

And as Josh has just covered, think about how your super is invested and what that means for you. Now all of that is a lot of information to digest, so please do bear in mind that we are strongly encouraging each and every one of you to go now. Read more. Learn more and most importantly, ask questions. If we did our job well here today, we've probably triggered more questions that you need to ask than what we have answered.

That is a great thing. If you now know all the questions that you should be asking because of this session that you didn't know to ask, then you've had great success by participating in today's events. Use the calculators. Use the tools. There are podcasts and webinars and all sorts of learning opportunities. Different channels. We all learn in a different way.

So please choose your channel of preference and really engage in your superannuation. And as I said, talk to the experts. The experts know what questions to ask. The experts know potentially what the side effects might be to making any strategic decision when it comes to superannuation. Now we are at time for questions and we've seen some wonderful questions coming through.

But before we do, I just want to remind everybody about the channels that are available for talking to us more about your superannuation, if that is what you'd like to do. Please do reach out. Give us a call or hop on to the website. We are here, ready, willing and able to guide you and assist you on your journey into and during retirement and again, like always, your voice matters a lot when we build these platforms in these events, we want to know what you want to know so that we can bring relevant information.

We want to make sure that when you've participated in an event like this, yes, we might have generated more questions, but you're also walking away feeling motivated to look further. Feeling a bit more comforted in what you've managed to learn. What can we do better? What are we doing well, what are we not doing? Well? You need to tell us that we read it very carefully.

We apply all of your feedback every time we look at events. We are so mindful of what our members want us to bring to them. You will receive an email after participating today's event. Please do take the time. It's not a very long questionnaire, but we would love you to take the time to share your feedback so we know if we're missing the mark on certain points or not.

And as we've said throughout the session, please do participate in one of the further modules. If you can, because we do go into a bit more detail on some of those things. Now, bearing in mind we do have lots of questions, Josh. So, if there's one in particular that you liked throughout the event, please do feel free to call it out now.

And I've got a couple that I saw come through as well that I'll address.

Josh
The probably question that I thought that was interesting that came through, was can I actually you talked a lot about combining super, and there was a question there that actually asked about, can I combine my super with my wife or with my partner? Do you want to just talk to that for a moment? Because I came up actually a couple of times.

Ruth
Yeah. Look, it it's a really good, good question. And it is one we get a lot.

No, you can't basically yes, you can be part of the same superannuation fund, but each individual has to hold their own superannuation account. Speaking of spouses, it's actually there was there was a really good question that I sponsored when it came. It's a contributions question as well. And it was about contributing to a spouse account. I had a slide there that had, two little bubbles come through.

One of said you might put an after-tax contribution into your spouse. And the question was, why would I contribute?
Yeah.

Josh
And dare I say I did notice you skipped over that.
I was conscious of time.

So, there was that slide where Ruth was talking about, if you make a non-concessional contribution and after-tax contribution that it might give you access to the government co-contribution. There's another advantage if that after tax contribution is made by a spouse into your account, if you're a lower income earner, as Ruth was talking about, if you're a lower income earner, that contributing spouse may actually be eligible for what's called a tax offset.

So, they can actually apply that to reduce their own tax in their tax return. So, it's a really great incentive to think about, although you can't combine both your super accounts if you're you need to keep your account individual. But you can still think about, well, how do we manage contributions across a couple. And so they may be advantage in you going.

Well, instead of putting a contribution into my account, I'll actually put it into my spouse's account. If they are beneath that threshold, that income threshold that then gives you a tax advantage. So don't necessarily just be limited by what you can do with your own account. Ruth was talking about if I think about the co contribution, just go off topic for a second.

If you've got a lower income earner in your household, it's worth was mentioning. It's a really great way to think about putting some after tax money into this super and getting a government co contribution. I can tell you what, as soon as my son, he's currently 11, he's already talking about getting his first job back. Can I say as soon as Jonas starts working, I'm going to make sure that I'm making contributions or giving him money to make contributions that he can then get, co contribution on top of really great effective strategies don't necessarily apply to you. Think about it for others in your household.

Ruth
I'm trying to imagine how excited an 18-year-old would be with a super contribution. You might need to.

Josh
Yeah, I don't yeah, I think he just dreams of some luxury job, like working at Maccas as soon as he can. Maybe it's his way of escaping the house. I don't know.

Ruth
There'll be lots of brilliant questions coming through when the team have done a great job responding to the majority of them, with a written response. People talking about gifting. So giving children money and will that help me qualify for the Age Pension if you can. You know, reduce the amount of assets. Yep.

Josh
So, we do actually talk about gifting in session four, we cover the Age Pension in a bit more detail in that session. There are very strict rules on gifting and how much you can effectively might be the terminology is wrong, but
how much you can give away, to help you with accessing the Age Pension or how much you can give without it causing issues or consequences with the Age Pension.

So, if that's an area that's really important to you, I'd suggest that you do watch, that fourth webinar and the thrive, webinar that will go into it in more detail. But I think the comment I would make is a bit like everything else you've talked about. Gifting is a great idea. Thinking about helping your kids or your grandkids, even if it is ultimately to also help you with Age Pension, for example.

But it can have consequences. The last thing you want to do is to be generous with your money. If you can be and then realise that that's going to cause an impact as to what the government may give you. So, I would really, as I said, if that's something that you're wanting to look at, really think about attending that fourth session, if I can jump in, that question came up that that is I'm going put straight out is not one we can answer.

But I think it brings up a really interesting point to consider. And the question that's come through here is, is it possible to grow my super without too much risk over the next five years? I think part of what we've been talking about today is what's your income needs and goals in retirement and how much money do you need to fund it?

And if you're finding that the amount you need to fund it is pretty much on track, that maybe means that you can pull back that lever a little bit if you wanted to when it comes to investments. But remember that there are two levers that you can use to really grow your money and one of those his contributions that Ruth covered.

The other is in making investment decisions. If you do have to lean in on that investment lever, then risk probably becomes a real thing that you need to consider and balance it out. Now, why I say I can answer that question is because we just don't know the reality of the world ahead of us. We've certainly seen a lot of change earlier in 2025, with global politics and what's happening around the world.

We saw the Covid crisis a few years ago, which none of us saw coming. None of us were prepared for that. Certainly with financial markets, so risk to some extent is an unknown. What I would try and give you confidence in now is two things. Firstly, whether you're in one of those diversified investments, for example, remember that when managing your money across a whole range of assets, and that's to try and in some cases to actually smooth out that volatility, but also focusing on the long term.

The second thing I would say to you is that it is those periods of volatility. If you remember the chart I showed that looked at the Covid downturn, but then this enormous growth that occurred afterwards. If you are in a really conservative investment option, this is something I'll talk about in session two actually. But if you're in a really conservative investment option, might be great during a downturn.

But then that means that you could potentially also miss out on that upturn as well. So, I just as I said, not necessarily something that we have an answer to, but certainly something that highlights the importance of you thinking about the risk you're willing to take on and then making sure the investment you’re in is appropriate to that.

Ruth
Two very quick ones that I'll address here. There was an interesting question about salary sacrifice. When can I stop salary sacrificing? Do I have to continue with this? The answer is you can stop change salary, sacrifice arrangements with your employer when you want to. Depending on how, I suppose how supportive the payroll are with adopting changes regularly, it is not something you're locking in for life.

If you engage in a salary sacrifice arrangement, then you can also stop it by just approaching payroll and asking them to change the amount or stop that amount. So, it isn't something you need to be too concerned on. You're not locking in forever. The other quick question was about how do I change my investment options and my investment portfolios?

Really simply, you can do it online, through the mobile app, or through logging into the dashboard. We do not charge you any costs to switch in between the portfolios. And remember as well, Josh talked about various different options. You don't just have to pick one. You can actually hold multiple options at the same time until you find a weighting in a blend of investments that suits you and your needs.

Now, if you're not confident to do it yourself through your online accounts, give us a call on 13 1184 and our operators will help you talk you through that process for lots of different ways to do it. But it is something that's really, really simple. Just hop online is probably the easiest way.

Josh
Last question that I've got, and it's actually a bit of a wrap up question. So, if there's something you've got, now's your time.

Ruth
No, I think we've covered the team behind, have done a great job answering most of them, actually.

Josh
So, the question I've got here is what do I do next? I think someone who's. Probably, been a bit overawed by anything. I would actually answer that in two ways. The first and then I'll, I'll let you, expand if you'd like. But the first is, as Ruth said, we've got a whole series of webinars now that really delve into these topics further. So, if you've started to get some new questions that you need to answer, that's a really great way for you to to start to get some of those answered or to think about them.

So do register for those webinars and think about that. The second thing about what's next though, or what do I do now, is I would really encourage you to make sure you've got that housekeeping right, make sure that ‘you’ve got your online access, that you've got that tangibility,

But I'd also say as part of that housekeeping, you've got a workbook, as I've mentioned, as part of this webinar series, jump into that workbook, start filling it out and start thinking about those needs.

And once start thinking about your income needs and that can actually start helping you as we move into those next sessions. But on that note, I might pass to you and let you wrap actually, have the final word. I don't give it to you often.

Ruth
No, you don’t, I'll take it. I will say, to that question, what to do next? I'll tell you what not to do next. And that's panic. Please don't panic if after today you've realised that you're not prepared and that you feel like you can't ever get to where you want to, where there is a will, there's a way. And sometimes that might mean us helping you.

Re- determine what your retirement goals are and what you're trying to achieve. So, what not to do is panic and be stressed about your superannuation and your retirement. We want to work with you to make this one of the best chapters yet, so please do reach out and talk to us. Engage with us, ask those questions and we'd love to see you partake in one of our next series to learn more.

Thank you everyone. Take care.

Josh
Thank you very much.

RUTH
Hi everyone, and welcome to today's webinar, How to pay yourself in retirement. My name is Ruth Weaver. I'm joined today by Kane Everingham and today Kane and myself are going to talk about a very exciting chapter in your superannuation journey, how to structure that superannuation and how to now turn that super into an income throughout your retirement years.

Now, before we get started today, there are a couple of acknowledgments I'd like to make. Firstly, we are linking in from all over the country. So, let's take a moment to acknowledge the traditional custodians of the lands where we live and work and their connections to land, sea and community. We pay our respects to their elders, past and present, and we extend that respect to any Aboriginal or Torres Strait Islander peoples who are here today.

I also want to remind our audience that today, Kane and I have a lot of content to cover, but we will only be talking in general advice terms only. We do not know your personal or your financial circumstances. It is up to you to make sure that you are seeking further information, so you can apply this information to your situation, to your circumstances, with your goals in mind.

We would strongly encourage you to talk to your financial adviser if you have one, and if you don't, please do reach out to us on 13 11 84. If you'd like to explore any of these topics a bit further, considering your own circumstances. Of course, there's also lots of information about Australian Retirement Trust and our products and services available on the website.

Now I'd like to start as well by thanking you all so very much for all the questions you submitted in advance, in advance to today's event. Kane and I spent many hours looking through your wonderful questions, and truth be told, it really helps us to shape what we're going to bring to you in these events. So, I'm confident that the vast majority of those questions will actually be covered throughout the content today.

We do have a team with us here. It's not just Kane and I. There is a team behind the scenes who are manning our Q&A function. So if you look at the top right hand corner of your screen, you will see a Q&A box. Please do submit your live questions there. We'll be able to see them along with the team, who may reply to many of them through text.

Kane and I will have about 20 minutes, I think at the end. All going well to go through those questions as well. So we encourage you to pop those through throughout the session. Now, if this is not the first time you're here, you'll know that this is part of a four-part series. This is number three. So, if I can just cast your memory back, this is a series made up of four pieces.

The very first series of this retirement program was about laying down the foundations on planning for retirement. It was about dropping the seeds and getting you thinking about the important things to do. The second, third and fourth part of these series are more deep dives into these topics. More specifically. The second one, which many of you may have engaged in, was really considering contributions into your superannuation and considering how that's invested.

Really focused on boosting your superannuation balance in those years leading up to retirement. This is the third part. And today we're going to talk about getting into retirement, structuring your superannuation during those retirement years and the different options you've got available. But it's also mindful of that little period called transitioning to retirement and some options you've got available there as well.

Now there is a fourth part to the series. It's called How to thrive in retirement. So, this is very much guided for those individuals who are maybe already retired and just wanting a little bit of a recap on how to make sure that they're also mindful of any opportunities available. Today we're going to talk about the three pillars of retirement income.

We touched on it briefly in session number one where we talked about the different sources of income that you might have in retirement. Acknowledging that super might only be one source of income. We had a lot of questions about transition to retirement. We tend to call that TTR for short. We're going to talk a lot about what that looks like. Give you some examples on how that might work in practice. We'll talk about structuring super then during those retirement years, the options that you've got available, as well as considering how it's invested, even though you're retired. And then, of course, we'll talk about what happens to that superannuation asset in the event that you are no longer here. So, a little bit of estate planning.

Let's start very quickly with a little summary of the previous seminar. Just to refresh those of you who did engage. In the last session, we focused very much on how to grow your superannuation savings. We wanted to give you a really deep dive in the different types of contributions, the different reasons you might make certain contributions. Fundamentally, trying to highlight the overall benefits of making extra contributions regardless of how close or far away you might feel you are to retirement at this stage.

We then talked a lot in the last session about investing that super helping you to understand the different types of investors that are out there and maybe helping you to identify the type of investor you might be and therefore helping to see from our investment menu which particular portfolios might be suitable for you. We also discussed the concepts of insurance and protecting yourself and your family as you're leading up to and entering into retirement.

Any of those topics, if they are of interest to you, please do engage in session number two. Today we're going to talk about funding, retirement and how you can pay yourself an income throughout retirement. Now, speaking of income, that is often the part that creates the most confusion. Many Australians will ask Kane and myself throughout our education events how much super should I have?

What balance should I have at this age? And unfortunately, we can't answer that until we have a little bit of an insight as to what income you'd like to live on during retirement, and also what amount of the work does super need to do to source that income. And we'll talk about that today. So firstly, if we think about income needs, this is tricky for a lot of families to get their heads around because it might be very different to what your current income is.

Retirement is a different chapter. It can have different expenses associated, but there's also lots of expenses that you may no longer have in retirement that you currently do. Now, there is a couple of ways you might land on the income needs for retirement. One is called the two thirds rule, and it's really just looking at your current income levels and looking at two thirds of that.

A good starting point to get closer to your true figure, unfortunately, it does require maybe doing a budget, and that's a concept that many people don't like the thoughts of doing. But it is a really valuable exercise to get a feel for what you might need during those retirement years. There's also some guidelines out there in the market for you to use as a benchmark. We are human. We like to know roughly what other people out there are doing.

So as far, which is the Association of Super Funds of Australia, they've set a couple of guidelines to say, look, if you're a couple, most couples would like to achieve X, Y, Z. Most individuals would like to achieve this kind of figure. So, you could use those as a benchmark yourself. Notwithstanding, it doesn't factor in what you're wanting to do.

Everyone will have a different income need, and it will be different to your siblings, to your family, to your colleagues, to your friends. So, take this exercise as a very personal one and use a retirement calculator. Retirement calculators are very useful to help you determine not what you could do, but also what you actually can do. So at least you get a starting point.

Now when we think about retirement lifestyles, we've broken it up here into three. We're going to use the ASFA lifestyle guidelines here. Just to give you a little bit of a benchmark and a starting point. We know that in Australia we all have a safety net called the Age Pension. And what that means is even if we have no superannuation and no savings, the worst-case scenario is that we will qualify for the full Age Pension.

And live on what is quite a modest lifestyle. The Age Pension was designed purely to fund the needs you have during retirement. The Government were not thinking about what wants you might have, what things you might like to do, and were very much focused on the basic needs for retirees in this country. So, what you can see here are those modest income levels that somebody who was relying wholly and solely on the Age Pension might achieve.

You can see the single figure and the figure for a couple who might also, qualify for the full amount. Now, there are many Australians surviving on that particular income level, but most of them will tell you it leaves them with very little choice. You can then think about what superannuation might do, even if you only have a modest superannuation balance.

It can really give you a little bit of freedom. It gives you the freedom to think a bit more about not just the costs that I have to meet. Things like electricity costs and fuel, for example. But also, what kind of little things would I like to do? And it gives you a little bit of breathing space. So, the average Australians are showing us that you don't need too much more than the Age Pension to be able to get a little bit of breathing space.

However, most of us are saying that we'd like to achieve something better than that. We want to be a bit more comfortable during retirement. And what you can see here is that there is a big gap between the current Age Pension rates for an individual or a couple, compared to the comfortable income needs that Australians are currently saying they'd like to try and achieve.

So, the reality is, for most of us, we might find ourselves somewhere in between, modest and comfortable. And that's perfectly fine too. And of course, there will be individuals who suggest that they want far more than the income needs for comfortable. These are just benchmarks and guidelines that we like to work off. So how does that then translate into your balance.

And what we can see is you don't have to have a significant superannuation balance as an individual or a couple to really just give yourself a little bit of breathing space beyond the Age Pension. However, if you are aiming for something more like the comfortable lifestyle standards, what you can see here is you have a lot more work to do, and your reliance on superannuation might be far greater.

Now, of course, that's notwithstanding you may have assets outside of superannuation. This is assuming that you are putting a lot of eggs in your super basket, and you are wanting your super to fund a lot of that. So, depending on where you sit on the lifestyle requirements will absolutely determine how much superannuation you might need to fund that.

Now I mentioned the forecasting calculators. They are fantastic and if you haven't used one, I would strongly recommend you hop on to ours or any of them. And they generally invite you to put some personal details like your age, maybe your current income or the income you might be trying to achieve at retirement. Then look at your current super balance and they really give you a little bit of a health check as to whether you might be on track for that retirement income or not.

So, I'd strongly suggest you hop in and use those and play around with the levers that you have in there to push and pull the levers, or maybe change the age at which you retire, maybe change the income levels that you're aiming for, and see what the results can bring for you. Now you'll also see on the top right-hand corner of the screen that little symbol, and that is prompting you to maybe look at your workbook, which by now you should have received.

And that workbook is encouraging you to take notes. Take some action and jot down some questions or some calls to action you have for yourself throughout tonight's event. So please do make sure that you're using your workbook alongside, using these calculators so that you are documenting your thoughts, your goals, and your objectives. Once you've gone through that exercise and then you're trying to figure out, look, I understand the role that super is going to play.

How does it sit in conjunction with the other possible sources of income you might have? Kane, I'm going to hand over to you for this one.

KANE
Thank you, Ruth. All right. So, as you've heard Ruth talk about, you've spent your whole working life building your superannuation. Now you're either knocking on the door of retirement or you're not far away. How do I actually fund my retirement? And that's what we're going to go through right now. So typical sources of income available to you.

So, we call them the three pillars because you might have your own savings. So, you might have stuff in your bank account. You might have rental income from investment properties. So, you'll have some other assets there that could provide some income for you. Then obviously superannuation. We're going to spend a lot of time focusing on how I use that.

I've spent all this time growing my super during my working life. How do I now use that super to actually help fund my retirement? And then the third pillar is the Age Pension. So, you can see some age limits there on the screen as well. But with the Age Pension, we're finding most people who are retired now or moving into retirement.

You didn't have super for most your working life. So, there is still a lot of Australians who are in retirement either getting full or part Age Pension to help supplement and fund their retirement. So, I'm just going to spend a little bit of time on the Age Pension. Firstly, because it is an area we get asked a lot of questions about.

So firstly, to be eligible to apply for the Age Pension, I must be 67 years of age. I have to meet that residency rule there as well. And importantly, they will apply an income test and an asset test to see if I'm eligible to get some Age Pension. And I will go through both of those in more detail.

Now, how much could I potentially get from the Age Pension you can see on your screen now? There's an amount, a maximum per fortnight for an individual and then for a couple. So, you can see the differences there. Now that's the maximum amount showing. And you might get a part pension through the assessment which obviously is going to be less than that.

Now a little key point that we want to highlight here is that you can apply for the Age Pension up to 13 weeks before you hit age 67. So really encourage you to get in before, don't wait till you 67th birthday. Otherwise, you might be waiting, waiting for a bit to get some income if you're eligible.

So, 13 weeks out, you can start that process with Services Australia to apply for the Age Pension. Now what is included in the income? So, if I'm still doing any kind of work, you know I might have retired, but I might be doing a little bit of casual work, that kind of thing. That would be included. Income from my financial assets is included.

Now, what's a financial asset? Superannuation, money in the bank, I might have shares outside of super. That's what they call a financial asset. And the good news is you don't have to report to Centrelink. Well, hang on, I got 3% from this bank account. I got 4% from that one, 7% from this share They don't care about that.

All they want to know is what is the balance of those assets. I've got 100 grand in super. I've got four grand in this bank account. They just want to get the total of those financial assets. And then they apply what's called deeming. And this is a rate, or an income rate set by the government. They assume that your financial assets earn, so they don't care about what it actually earns.

They will apply this deeming rate, which is a heck of a lot easier than you working it out yourself. And generally, those deeming rates are quite generous compared to what you're actually earning on your financial assets. And then the last thing, stream of income that can be absolutely assessed is I might be getting an overseas pension, or I might have that investment property getting some rental income.

So those sources of income will be assessed. And of course, if I'm in a couple, then my partner's income will be included in that assessment as well. Now what are the income test limits? They should be popping up on your screen right now. So, you can see there first of all that's to get the maximum Age Pension. So, if I earn less than that threshold I would be entitled to get the full Age Pension under the Income Test.

But remember they do apply the income and assets test. So whichever one gives you the least or the worst outcome, that's the test that will apply. So even though you might satisfy the income test, you may not satisfy the asset test. But those limits there on the screen now are to get the full Age Pension under the income test.

Then once I earn more than that, every dollar above that my Age Pension starts to reduce until eventually I reach a cutoff point where I wouldn't then be entitled to any Age Pension under the income test. Now there is some good news, and this isn't often known widely, but Centrelink have provided where there is a work bonus. So essentially, I can earn a certain amount per fortnight where it won't impact my Age Pension entitlements, and I call that the Work Bonus.

So, can I work and get the Age Pension? Potentially. So, with this Work Bonus, I can earn up to a certain amount and you can see that amount on the screen there. And that does not impact my Age Pension entitlements. And when I apply and get the Age Pension they start off with the Work Bonus balance. So, as I earn that goes off that balance.

But every fortnight I get another amount going towards that bonus. So just be aware if I do want to do some casual work or something in retirement, I can potentially do that and not impact my Age Pension. But again, do your homework. Plenty of resources online to have a look at those figures and then look at that Work Bonus in more depth.

So that's the income test. Hope we're all doing okay. Now we're going to move into the assets test. So, what assets does Centrelink want to know about. And they're coming up on the screen for you right now. Now importantly what you'll see missing is your own family home. So, if you own your own family home your principal place of residence is not assessable.

For the asset test. Okay. Now, common ones, there, superannuation, if I've got an accumulation account or in accumulation phase when I'm under my Age Pension age, Centrelink won't count that asset. Once I am Age Pension age they will count. It doesn't matter where my super is held. Once I hit my Age Pension age, they will count it.

Anything I've got in the bank, the cars I drive, my home contents and importantly on that, don't look at your insured value when you're reporting your contents. Look at effectively garage sale value. If I had to put everything on the front lawn and sell it by the end of the weekend, what could I realistically get for my car?

What could I get for my household contents? So that's one little area where Centrelink are quite generous. They want to know what you've got in other financial investments, what you've got in the bank, what you've got in shares outside, have you got an investment property. They will all count in the assets test. Now what are those limits?

So similar to the income test there's a lower limit where I can have assets up to that amount. And I'd be entitled to the full Age Pension. Once I've got assets above that, then that reduces. And I go to part Age Pension territory. And then there is an upper threshold there which once my assets exceed that, then I would not get any Age Pension.

And again, you can see there's different rates for a single person and for a couple. Now importantly I'm pointing out this is for homeowners. Now there are separate limits for non-homeowners. And you can see on the screen here that they are a bit higher. The reason for that is when you don't own your own home Centrelink realises that you're going to need more assets to help fund your retirement because you're going to be paying rent, most likely throughout your retirement. So that's why non homeowners have a higher asset limit. And can I importantly point out that if you apply for the Age Pension when you first hit age 67 and let's say they tell you no sorry, you've got too much income or too many assets, don't think that once a no is always a no. Because as you go through your retirement, you'll start to spend down some assets, your situation might change, and you might become eligible in the future. So always keep that in the back of your mind that you could absolutely look to apply further down the track as your situation changes.

All right. Now, how do I actually apply for the Age Pension? You can just go through the Services Australia website, jump online. You can fill out a paper form if you like, or you can walk into one of their branches, and they can help you. And importantly, remember to start doing that up to 13 weeks before you hit age 67. And they'll be able to get that all sorted for you. So now, what I'd like to do, though, is throwback to Ruth with a very popular topic. Transition to retirement. Or as you heard Ruth talk about it, we like to abbreviate that to TTR. It’ll save a lot of time if we do that. So over to you, Ruth.

RUTH
Thank you, Kane. So, what we're going to do now is actually step back a little bit. Everything Kane talked about in regard to Age Pension is really only eligible when you're 67, because Age Pension is something that you cannot qualify for until you're 67, even if you have retired. Now, when it comes to superannuation, I generally say there are three stages. There is the accumulation stage where you're building up your superannuation balance and generally working, getting contributions from your employer. Then there's the retirement stage, which is I've finished working, I'm spending that superannuation, but there's a little stage in the middle, called transition to retirement, and it can be a stage that people engage in before they retire, and it only can kick in once you hit the age of 60.

So, between the age of 60 and 65, whereby you've got full access to superannuation regardless of working status, there is a little five-year window which we call the possibility to engage in transitioning to retirement. So, as I said, key number one is to reach age 60. Age 60 is a really nice age, and it's where we start to see the shackles unravel from your super. You are now able to consider accessing at least some of your super even if you are still working. Age 65 I mentioned is different because it doesn't matter whether you're still working full time or part time, you have full access to that superannuation in the way that you would like. Now, if you're still working at the age of 60, this is where a transition to retirement will become something that might be suitable for you.

So, let's have a little look at how it actually works. First and foremost, you've got to the age of 60 and you have your superannuation account. This is where the employer is contributing the money in for you. A transition to retirement account would need to be opened alongside. So, to put to bed quite a few questions. If you have a transition to a retirement account, yes, you have two accounts with the fund. What you will do is move a portion of your money, almost all in some cases out of the super account, into the new transition to retirement account. Now that account looks and feels awfully similar to your super account. You have the same fee structure attached to it. You have the same investment opportunities attached to it.

But the difference is now you are accessing some of the money from there. Remember as well, we talked in one of the earlier sessions, if you are accessing superannuation after the age of 60, it will be tax free. So, you are now able to consider moving some or all, most of your money. You do need to leave a little bit in the super account, moving that money into the transition to retirement account and accessing some of it tax free.

After the age of 60. What that might mean is it opens up opportunities, opportunities to spend that money on some things, but also maybe opportunities to consider boosting your superannuation balance through contribution strategies. And I'll cover that in a moment. The reason why you have to have two accounts if you're using a transition to retirement, is because you're still working, and your employer still needs to contribute money into your super account, they are not allowed to make contributions into the transition to a retirement account.

That is a rule and not an Australian Retirement Trust rule. That is a legislated rule that income accounts like the transition to retirement can only have money come out, which means the superannuation still needs to catch those contributions. So that might help you understand why you must hold two separate accounts when you're using the transition to retirement product.

So, you've moved your money across. You've got this product. How much can you take out of it? You are actually limited to 10% maximum per annum of the balance you've moved across. So, for example, if you've moved across $400,000 from your super into the transition to a retirement account, you could potentially take up to $40,000 out of that account in that year.

Now, bearing in mind that changes when you retire, you're not limited. But during the transition to retirement stage, you absolutely do have the maximum of 10% applied. There's also, however, a minimum. So, depending on how much you move across, you must if you're between 55 and 64, for example, take at least 4% per annum of that money.

And as you get older, when the transition to retirement is no longer really valid and you're just drawing down superannuation, there is actually an increase in the minimum amount you must take from those income products. But let's just focus on the top line here, the 55 to 64, because ultimately that is the area where you would be using it as a transition to retirement.

After that age, it's no longer subject to those rules. The beauty of the transition to retirement and all of the income accounts, in fact, is that you get to determine how often you get paid. You might choose to have your 10% per annum paid out in fortnightly instalments or monthly or quarterly or half yearly or in some cases, we see requests come through for the full amount to be taken out in one hit. You will be able to determine that with us when you establish your superannuation account. So, this opens up some brilliant opportunities. So, we now have the superannuation account, the transition to retirement account. Why would somebody actually decide to use this? Let's look at a couple of scenarios. A transition to retirement account might be opened up by someone who just wants the extra money.

They've worked hard all their life. They've gotten to the age of 60. They like the idea of finally being able to access some of these hard-earned retirement savings. Let's look at this lady here. She's 60. She earns $80,000. She has $200,000 in her super. She has decided that she wants an extra $6,000 a year. She wants to get that by starting a transition to retirement. What she's going to do with that $6000, is completely up to her. She can access that out of the transition to retirement tax free. We are not going to ask her what she wants it for. That is up to herself. So, she's planning on trying to maybe pay off her debts in this scenario before she gets to 67 and retires, and that's her motivation.

She might have decided to go on holiday. She might have decided to spoil grandkids. That's her decision. However, because she does that because she's now taking money effectively out of her retirement savings before she's fully retired, that is going to have an impact on her retirement savings when she gets to the age of 67. So, by engaging in this strategy, she could potentially find that her overall retirement savings could be about $50,000 less by using this, because she's accessing the money before the age of 67, but that is an option available to her. So that's one reason you might use it. Another reason you might think about opening a transition to retirement is because you want to reduce your working hours. The same lady has now decided in a completely different scenario, actually, I want to cut back my working hours to four days a week, but I want to sustain the income that I currently have. I'm still paying a mortgage. I'm still funding things I can't afford to drop down to four days. I need to supplement that extra day of income, and she might use her transition to retirement to do that. Now, if this is what she's trying to do, she would need to take approximately, and I'm going to use very approximate figures in these scenarios, approximately $10,000 a year. She would need to take out of the transition to a retirement product to meet that fifth day of income. Now, that's going to have an impact on her overall retirement position by the time she gets to 67. And the reality is she might find that by accessing that much in the seven years between 60 and 67 as she's leading up to retirement, she could be a $100,000 behind where she would have been had she remained working full time and not accessed the money.

That being said, the counter-argument to this would be, well, what if she retired fully at 62 or 63 and was taking even more out of super? Don't let these numbers always translate to a negative scenario. It could be a worse and a much worse scenario if this lady had decided to retire fully at 62. So, the net situation could be very different.

So just bear in mind that you can use it if you still need to supplement income, because you are going to work part time and you want to sustain the income that you had. There's a third reason you might use transition to retirement. And this explains why we get so many questions about it, because a lot of people aren't clear why they would use it and what the benefits would be.

One popular way to think about transition to retirement is just effectively as a tax strategy to boost your super, and that might sound a little bit odd but let me talk you through it. Remember, you're moving your superannuation, a lot of it out of that account into the transition to a retirement account. And I mentioned that you can now take 10% out of that product.

The beauty is that money will be tax free. Any money you take out of the system after the age of 60 will be tax free. So now you've got this opportunity to have an amount of money in your bank account, which is effectively tax free. That's extra money you have now. It opens up the question if you don't need that extra money for expenses or to supplement loss of income, what could you do with it?

And one option might be to boost your contributions into superannuation, primarily through that concessional method, which is generally taxed at 15%. Remember back to the previous sessions. These types of things are the salary sacrifice or putting money into the account and claiming a tax deduction. These are the reasons you might use to transition to retirement, and it might be nothing to do with actually transitioning to retirement, and more to do with using a tax-effective strategy to boost your super.

So, let's look at this lady’s options. The same individual coming through, I should probably give her a name I haven't yet. But this particular lady has decided. You know what I'm not reducing my working hours. I don't need the money to spend on anything external. I'm going to use this transition to retirement product so that I actually can make extra salary sacrifice contributions to that amount into my balance.

And what that means is by having exactly the same income in her bank accounts or a bank account throughout those years leading up to her retirement. Remember, she's taking it out of the super system and reimbursing it back into her superannuation account. She fundamentally means that she could be somewhere between 28, maybe even $30,000 ahead, depending on lots of factors like fees, investment, earnings, etc.

But just to give you some ballpark figures there. So, this is an incredible strategy. Yes, it's a product. The transition to retirement account is the product. But the strategy can be because you want to work less, because you just want more money leading up to retirement, or you want the opportunity to boost your super tax effectively. So hopefully that's giving you a little bit of a clarity over why someone might consider this particular product.

Now, I mentioned there is that window between 60 and 65. It's a short window. And this is where a transition to retirement is an option. Once you get to 65, something changes. And what changes is even if you had one of these products, we no longer call it a transition to retirement. Because at 65, even if you're working, we actually change the nature of that account.

You have full access at 65, but Kane let's assume you decided to actually retire. You've used the transition to retirement. Maybe you're going into full retirement now. What kind of options does someone have to continue to draw money out of their super?

KANE
Beautiful. Thank you, Ruth. Okay yes, so let's go into how you actually use your super in retirement. So, you may be watching it and thinking this yourself because it is a very common question we get. We actually hear a lot of people actually think, well, I've finished working. Do I have to pull money out of super now and just putting it in the bank account.

Okay, now you can do that. And, I'll show you that's one of the options. So, one of the options, the most common option we see is people tend to turn it into an income stream. So, I'm used to getting a salary while I'm working. So, I'd like to get a regular salary while I'm retired. So, most people tend to look at putting super into an income stream and the second option there, I could pull the whole lot out once I've retired and got full access to it, put it in my bank account. I could go to Vegas, blow the lot, do whatever I like with it. That's my money, so I can do that. But a lot of people think that's what they have to do. No, you don't. And lastly, some people might just go, you know what, I want to leave it in an accumulation account. I'm not sure what I want to do, or there's different reasons why I might want to do that. I can actually just leave it, sit in an accumulation account, and I'll go through the income stream and the accumulation account options with you as well. So, these are the different types of accounts that you can have with Australian Retirement Trust. I'm obviously just going to focus on the last two there, the Retirement Income account and the Lifetime Pension.

So that's looking at income stream products. But before I get into those, I'll just come back to using an accumulation account in retirement. So, some things to think about with an accumulation account. So, if I retire, I do not make a decision, that's where my money will sit just in an accumulation account. Now it gives me time to think about what I want to do, or I may not want to spend that money yet.

I might have other assets outside of superannuation that I want to spend those first. That's where we might see people look at leaving money in an accumulation account. How do I actually use an accumulation account though, to fund my retirement? I would make lump sum withdrawals and get them paid in a bank account of my choosing. That's how I actually use an accumulation account to fund my retirement.

Now, some people do leave these accumulation accounts open because they might be still doing a bit of work. They want some extra contributions going in. Some might even have insurance still in place for some reason. And that's where it can be funded through their accumulation account. And importantly, you can see that bottom point on the page remembering that when I'm under Age Pension age, if I've left that money seeing in an accumulation account, it is not accessible by Centrelink.

These can be particularly important for example, if I'm in a couple and I've got an older spouse, my older spouse might hit age, pension age and apply for Centrelink. But if I leave my superannuation in an accumulation phase then it is not assessable for my partner's, Centrelink application under the assets test, so could be a very important thing to keep in mind.

Absolutely. If your retired. Good chance to look at your investment options. I would say, look, when anything significant changes in your life is always a good time to look at, how you superannuation is invested. Very big point to note though, the second one there is when my money is invested in an accumulation account, anything it earns is taxed at up to 15%.

Now while I'm working. That's probably a great alternative compared to my marginal tax rate when I'm working full time. But when I'm retired, do I want to be paying tax on those earnings? So very important to think about. So that's the accumulation account. Now most popular product is probably what we call a Retirement Income account. Or you might hear the term account-based pension.

So, this is essentially I move my money into a retirement income account and I start to get regular income. And it's a very flexible product. I can actually change how often I want to get paid to fortnightly, monthly, quarterly and so on. I can generally adjust; I can adjust how much I get paid. Now there is a minimum that I must take, but I can take anything over and above that. And I can also take lump sums whenever I want. So, it's a very flexible product. I might work out. I need 40 grand a year out of this product, but then I'm going to get ten grand out to go on a holiday. I can do that. Very flexible product. As you've heard Ruth mentioned earlier, once I'm aged 60 or over the income is all tax free from it.

And a big difference compared to the accumulation account. Anything it earns in anything your superannuation earns in a retirement income account, you keep it does not get taxed. So that's why if you've ever looked at the investment returns on different options and seen, well hang on, why is your accumulation account a bit lower than the income account option? That's because there's no tax on earnings in the income account. And just down the bottom there, you'll see there you may be eligible for a retirement bonus. Have a look on their website. I won't go into that in any detail. Otherwise, we could lose 15 minutes here talking about that. Now, some things to consider with an income account.

Absolutely. Your money can run out. This is not a guaranteed income stream for your lifetime. The quicker you spend it, the quicker it runs out. You could effectively blow the lot in in a matter of weeks if you wanted to. It's your money. You can do what you like. You can set your spending level. It is assessable by Centrelink.

So once I start one of these retirement income accounts, even if I'm under Age Pension age, if I go back to that same scenario, I've got an older spouse applies for the Age Pension the minute and I'm the youngest spouse, the minute I turn my money into an income account, that amount would be then assessable for my partner's Age Pension assessment. And as I've already mentioned, there is a minimum amount that you have to take with these products. So, it's based on your age and your account balance. Now, normally that's not an issue because most people, to be fair, generally need to draw a lot more than what the minimum is. But it may not be for everybody.

If you've done really well, I hope this is an issue I have that I've done so well, my super balance is so big that the minimum it's forcing me to draw is more than I need. That would be a wonderful problem to have but just be aware there is a minimum you do need to take now just want to cover off lastly on the Lifetime Pension. So, this is quite different product. So effectively I am purchasing an guaranteed income stream for my lifetime. So, I purchase it and it will pay me a fortnightly payment right up until the day I die. I can also put in a spouse protection option if I'm in a relationship where if I pass away, then this Lifetime Pension would continue on for my partner so I can have that option there as well.

A big reason these types of products are starting to be created is because it could be a favourable treatment from Centrelink purposes. Okay, so they don't actually count, 100% of the value under the asset test for example. So, if I'm asset tested, this could be a product that could help me in that regard. And lastly there is a death benefit payable, to your estate or however you've got it set up if you haven't been paid back your full purchase price. So, if I have, say, put $300,000 into one of these lifetime pensions, I've only had about $100,000 of payments by the time I pass away. And let's say I don't have a spouse then, because I haven't been paid back my full purchase price, then that would go to my estate and be looked after how I've dictated. Now things to think about, the income even though it's guaranteed for life, it can adjust up or down depending on how the underlying investment perform. So yes, I'll still get a payment every fortnight, but it can differ each year. Can only be open between the ages of 60 and 80. And most importantly is that last bullet point. There is, after this, a six-month cooling off period.

Once I purchase this product. After those six months, I am locked in for my lifetime and I can't make any withdrawals. So, it is a strength that absolutely it's guaranteed for my life. But the other consideration is I can't just get at that money whenever I want and I can't change the payment amount like the income account.

Okay. So definitely worth keeping that in mind. Now when we talk about these products, particularly the income streams, the income account and the Lifetime Pension, they're not really designed to be worth to use by themselves. You absolutely can. But we often encourage you to have a look at, well, if I want the best of both worlds, could I have a bit of each?

So, something to think about. So just some key features do I want payments for life under the income account. No, that doesn't offer that under the Lifetime Pension, yes it is guaranteed for my lifetime. Does it have a money back protection. You can see there the Lifetime Pension does. And the account balance on your retirement income account if you pass away, would be paid through to your estate.

However, you've got it structured. Cannot it revert to my spouse? Absolutely with a Lifetime Pension. If I've got the, spouse protection option there, with reversionary to my spouse again can have those in place make sure that any nominations don't expire. Can I make withdrawals? Income account, yes absolutely. Lifetime pension? No. Locked in product. Can I change my regular payments? Yes. With an income account? No, with a Lifetime Pension. And lastly, can I change investment options if I want to? Income account that money is invested, you can control that, yes you can. With the Lifetime Pension, no. Once it's invested with a pool of other investors in that product and it is set and forget in that regard. So that's where if I use them together, I tick all those product features. Now you might hear the term income layering when it comes to these products. So that's where let's say I need $40,000 a year to live off. And I might have done my homework and realised now what, 20 grand is my bare necessities that's going to pay, you know, pay my rates, my electricity, my food, bit of petrol.

That's my set expenses. So, what I might do is I might set up a Lifetime Pension, I might get a bit of Age Pension. And that covers those necessities for my life so I can peace of mind. I know that's covered for the rest of my life, but then I might use the rest of my superannuation to, go into an income account where I can use that and potentially any other income I've got access to. And that's my fun money. That's where I'm eating out. I'm going on the holidays I’m treating myself. So that's where we talk about income layering. It doesn't have to be one or the other. I might want to use these in conjunction with each other. So just something to keep in mind there. Now if you want to know anything more about the products, please jump on our website.

You'll find whole sections dedicated to each of these products. They are they are quite unique in regard to each other. So have a look at that on the website and you can see the page addressed in your workbooks there as well. Now before I pass back to Ruth, I just want to quickly go through investments when you're retired.

Now, we've covered this heavily in previous sessions if you've joined any of those. So, I won't go into too much detail with investing and retirement, but still, absolutely, if I'm in an income account or if I'm in an accumulation account, my money is still invested. I still have control over how that's invested and where it's invested. Now, where we're going to invest your money?

The types of, places we put your money is in different asset classes. What you're seeing on the screen there is, is shares. They're an asset class, and they're what we call a growth asset. So, they is they're going to chase that high high growth high returns for me. But they're more volatile doing that. They're the types of investments that are going to go up and down a lot more.

How does that make me feel? Next group of assets. Again, cash is an asset class. Fixed interest bonds. They're asset classes. They're my defensive assets. They're more designed to protect my money rather than chase high returns or chase growth for me. And then we've got other asset classes that we look at. We've got property, infrastructure, private equity. So, our professional investment team, they will look at different combinations of these assets when they're building the different investment options that are available to all of our ART members.

Now here's the options that are available to you. Now in the blue box there, they're what we call our diversified options. They've been built a combination of those asset classes have been put together to make those investment options there for you. The names pretty much give away how it's invested. If I pick on number one, their high growth, that's going to have a heck of a lot of shares in there.

If I then jump down to side number four conservative, that's going to have a lot more of those defensive options like the fixed interest and the cash. So, it's more, more focused on protecting your money rather than chasing higher returns. If I jump over to the asset class options, this is where you know what, I want to build my own portfolio so I could go, I'm going to have 20% in Australian shares. I want 20% in the bonds option, 10% in cash. I can do that if I want to. I can build my own portfolio. Now you can have any combination of these. You can mix and match as much as you like but just be aware you've got a lot of choice there. Jump on the website and have a read of these.

What are they trying to achieve? What are they investing in? What's the historical return been like? What's the risk of each of these options and see how that fits with what you're trying to achieve with your superannuation. Now with if you move your money into an income account, and if you don't make a choice which you don't have to, if you don't make an investment choice, we will put you in what's called the Balance Risk-Adjusted option.

A bit of a mouthful. But hopefully the name gives it a why. Really, what we're trying to do here is if you look at how it's invested on the screen, you can see the purple and yellow there, that's the amount of shares that we're invested in. But then in the green is the amount of fixed interest or primarily bonds.

What these Balance Risk-Adjusted option is trying to do is when the markets are going great, I've still got plenty of exposure shares to capture that growth, but I'm not going to get as much growth as other options that are more heavily exposed to shares when markets aren't going so well, which shares are a prime driver there, when they're not going that well, I've got a bigger exposure to bonds to help underpin that and smooth that out. So, with this Balance Risk-Adjusted essentially when the when the market has gone really well, it's not going to be up the top, but it's going to be below that. But when markets crash it's certainly not going to be down the bottom there. It's that smoother ride.

So that's the option if you don't know what to go into. If you don't make a choice, that's the option where your money will be. What I want to show on this one actually is a lot of people think when they move into retirement, they just want, I'm just going to bury my money in cash. I'm just going to want to protect it.

Can't sleep at night. I don't want my money to go backwards. And what I wanted to show here is if someone had $300,000 in their super when they retired and I was drawing down 5%, that's what they'd worked out they just needed out of this product was 5% a year. How does that look over this 17-year period?

So, if I’d put my money in cash, drawn 5% a year, 17 years later, I've got about 226,000 still sitting in there, which I've been drawn 5%. Now, if I'm in the Conservative-Balanced option, you can see I'd have more than I started with. I've got the balance risk adjusted and then I've got the balanced option. Now what I want to point out here, 2008, you can see the big dips there.

When the GFC hit 2020, you can see the big dips at the other products. The other options took aside from cash because of the exposure to share markets. So, when you're looking to invest, even for retirement, take that long-term view because most of us are hopefully going to be retired as long as we worked for. So, I just want that to sink in so we could be working for 30 or 40 years.

We could be retired and invested for 30 or 40 years. So how comfortable am I to ride out those ups and downs that you can see in those other options that have got growth assets, but look at the outcome where those people have actually got in this scenario they've actually got more in their superannuation than when they started retirement and started drawing down on it.

So, something to keep in mind. But then on the flip side, you can see how smooth that ride is with the cash option. Does that appeal to some of you? Yes Kane, I know my balance is going down, but I haven't had to worry about the news and sharemarket crashes or GFC or Covid. It's just safe and secure, said that's the balance and again, it doesn't have to be one or the other. You saw those different options available to you. Alright, I'm going to throw back to Miss Ruth to I take you through the next steps.

RUTH
What an appropriate heading. Planning ahead Kane, you might need to plan ahead for Q&A because there has been lots of questions coming in live. So, I'll give you a chance to maybe have a look through and the team are doing their best to get to a lot of those questions through a written response. So great questions coming in.

Thank you so much for engaging. Let's now I'm going to talk about two things that are inevitable in life, death and taxes. So, a little bit of a morbid conversation, I'm afraid. But it is so important that we are thinking about this. None of us are going to live forever, and hopefully we still have some money left to distribute to loved ones once we've passed away.

Not too much, mind you, because we also want to make sure that we're enjoying our retirement and that we're not scared to spend our money. But the reality is that when you do pass away, where there is still some assets within your superannuation, regardless of whether you're using the old-style accumulation account that you had when you were working, you can still have one of them.

Or whether you're using an income account to start paying yourself money through, or whether you're using the Lifetime Pension. Regardless of how you need to think about what happens if I pass away. And one of the biggest myths that are out there is that it will just go to the will. Your superannuation is not an asset automatically under your will.

So, if you do pass away, your will will distribute whatever is part of your estate and that you've suggested, but your superannuation won't be part of that estate by default, and in most cases will be paid directly from the super fund to what we call your beneficiaries. This is why we talk a lot about calls to action around nominating a beneficiary on your superannuation account.

But there are rules on who you can nominate, so you actually can't nominate your neighbour or your favourite cousin, or your best friend. In many cases, there actually are some strict guidelines around who can be a beneficiary on your super. And they include a spouse, including same or different sex or a de-facto partner as well.
It can be a child of any age, a person that you're in an interdependent relationship with. I'll come back to that one, it often gets questions, and also, of course, somebody who is a financial dependent on you. Now the interdependent relationship gets many questions. What is that? You are in an interdependent relationship with someone if you have a close personal relationship and you're living together and you're actually relying on each other for for domestic and or financial support, okay, you're not in an interdependent relationship with a tenant, for example, who's paying rent because you're not in a close personal relationship and you're not relying specifically on each other.

So just being mindful of who you can nominate as a beneficiary on your account. If you don't have one of these individuals in your life, or you don't want to necessarily leave your superannuation to one of these individuals, or you want to make sure that it is part of the estate because you might have different arrangements, like trusts, for example, established there.

You can ask your super fund to pay it to your estate. You just need to know it's not likely to go there by default if you have never nominated a beneficiary. So just be very careful that there are rules around who you can nominate, and it doesn't mean it will automatically get caught through your will unless you've said so.

So how do you say so? Well, the way you tell the super fund who to pay the money to is by nominating a beneficiary. The beneficiaries that you nominate, are the individuals that you want that money to be paid to. There are different ways you can nominate a beneficiary. Some funds will offer a preferred beneficiary, and this is just giving the super fund a guide, a guide as to who you would like the money to go to in the event of your death.

Remember, it's just a guide. It may not ultimately mean that's exactly what the trustee of the fund will do. The trustee of the super fund have a duty of care to your dependents to make sure that in the event of your death, your dependents have been appropriately looked after. They do not factor in your personal feelings. They don't know them.

They do not factor in the dependent’s personal feelings. They don't know them. So, this is quite, mathematical, to an extent that the trustee will determine based on the level of dependency, who it should go to. So, you're not guaranteed through a preferred it will be the way you want it. If you want to make sure it's paid to the person or the people that you want, you might think about a binding beneficiary.

This is a legal, binding agreement between yourself and the trustee of your super fund that in the event of your death, the super fund must pay those benefits to the person or the people you have nominated. And remember, it might be your estate. If you really do want it to form part of your estate and be distributed as per the will, that is an option.

Now there is a third one available when you are setting up what we call the income accounts that Kane talked about earlier on. And this is where you can establish the type of beneficiary who can continue to receive the regular payments that you had. So, in other words, it's really just making sure that there's a continuation of income flowing into the household for your spouse.

This is really limited to certain individuals, primarily for a spouse. But please do bear in mind that estate planning is complex and there can be lots of different things to consider. So please do think about this before making nominations, particularly around things like a reversionary nomination. The binding beneficiary nomination gives you such certainty around who's going to get that money.

You can change it whenever you want. You don't pay money to put one on there. It is simply at a form available on our website that you can download and submit. It doesn't stay there forever. You will be asked to renew as every three years you would be prompted electronically and if it's the same person then you can just renew it electronically.

My husband is my binding beneficiary. Literally two weeks ago I got a prompt to say it's about to expire in March. Do you want to renew the same benefit beneficiaries for another three years? I said yes, and I submitted. I did not need to keep completing a new form that's only needed whereby you want to change the beneficiaries.

So, thinking about the beneficiaries, it's not just thinking about who do I want the money to go to. It's also thinking about, well, will this individual pay tax? Is there a more tax-effective way to distribute this money? Because the reality is there are certain individuals who will absolutely receive everything tax free, but there are certain individuals who you can nominate who may be subject to some tax on that payment.

So, what do I mean? There are two definitions of a dependent. Now we've got the tax definition which basically says a spouse is a dependent. Your children under 18 are dependents. So, they would get it all tax free. That person we talked about the interdependent relationship tax free, anyone who is financially depending on you. A good example there might be older parents.

Maybe you're supplementing some of their income. They're relying on you maybe to help with rent or food costs, etc. financial dependents will also receive a tax free. Who's missing from that list that we saw in the previous one? The most obvious one is children over the age of 18 or who are no longer financially dependent on you adult children, grandchildren, siblings, friends, charities.

These people, if they are receiving your superannuation, may be subject to tax on some of it, maybe all of it. So which part of your super might attract tax on a death benefit? Well, your superannuation is made up of two different components. You may never have noticed this. And for some people the reason they may never have noticed it is because they don't have both.

They might actually only have one. The first is the least common. This is the tax-free component. This is basically the component that makes up all the contributions you put in from your bank account, with money that had already been taxed, you didn't claim tax deductions. It goes in tax free, and it always goes out tax free. So let me give you an example.

If you have $10,000 in your bank account today and you put that $10,000 into your super, you do not pay tax on that. Putting it into your super, that $10,000 will always be paid out to anyone tax free. It's already been taxed. Okay. So, these are the tax-free components. The majority of us throughout our working lives at least have very little of this because most of us have what we call the taxable component.

This is made up of the contributions that our employer has been putting in, that we've been salary sacrificing. Remember those concessional contributions where we were only paying 15% tax on it? When we're accessing super after 60, we won't pay tax on this part. But maybe those individuals who are not dependents under the Tax Act, the adult children, the grandchildren, for example, could pay tax on this component.

So, it's about looking at your own account and saying, well, how much of my super is made up of the taxable component, which, as I said, for most of us, is likely to be the majority. That is the portion that may be taxed on the death benefit, depending on who you nominate. Now, we talked a little bit earlier on about, Kane mentioned Age Pension and spouses and Age Pension and potentially having a younger or an older spouse whereby you're only assessed for certain assets once you get to Age Pension.

So, it's important to think about your spouse while you're still here and think about structuring super in a way that's most effective for you. Think about your household. Is the smaller balance with the older person? Why is that relevant? Well, if the smaller balance is with the older person, as Kane said earlier on, when that person goes to be assessed by Centrelink, they don't have as much that's assessable.

If the young person is holding the majority of the wealth, well, then if they're not 67, that that is not being assessed by Centrelink. There can sometimes be a strategy here to redirect money, to try and maximise Centrelink entitlements. But sometimes it can be about reducing the potential tax that might be paid as well. If there's a difference in the account balances, sometimes we'll find that equalising superannuation balances between two individuals can do two things.

Number one, it might help with tax on death benefits if we do it properly. And number two, it might mean that if there's any legislative changes that come into effect, if we're both holding average balances, there might be less impact on us for that. But also think about if the smaller balance is with the younger person. Well, then that means that the super might become accessible quicker.

More of it can be taken out. So, if you've got a couple and there's a ten-year difference, well, the person who's 50 is not going to be able to access anything from that system for ten years. The person who's 60, if a lot of the wealth is there, that's wealth that can potentially be accessed a lot earlier.

Now, thinking about that, why would somebody consider redirecting money from one account to another? And I talked about the, the options there. It might be for Centrelink reasons. It might be for accessibility reasons. It might be just to mitigate risk. But there's also other reasons as well. And one of the ones is to just equalise the balance in the interest of fairness is one way to put it.

So, the before tax contributions that I talked about in session one and we covered in session two, they are part of that taxable component. Okay. And if a lot of your money is made up of that and your death benefit is going to catch a lot of that tax, some people might say, well, if I move some of that pretax contribution or concessional money over to my spouse's account, if the spouse has a different beneficiary, it might just sort of mitigate the total tax out of one payment, depending on who the spouse is beneficiary is, they may have a dependents that they want to pay it out tax free to.

It will depend. So, the contributions that go into your account from your employer are concessional. And if you're wanting to maybe maybe equalise balances for whatever reason, Centrelink reasons, tax reasons or just mitigating risk, you might do it this way. The money that your employer is contributing, you can redirect over to your spouse account up to 85% of it.

If you've gotten to a point where there is a significant high balance and a low balance, with the high balance members continuing to get big contributions through their employer and the low balance member isn't, you can redirect those employer contributions up to 85% if you want to your spouse account. It doesn't open up additional opportunities, however, for you to get extra pre-tax contributions through.

So, this is called contribution splitting. And one of the most common questions we get on this and we did field a few was what's the actual tax benefit? Really there's no immediate tax benefit here. The tax benefit might only be seen depending on if your spouse has a dependent that they might pay it out to. That is not a dependent on you.

That's the potential only tax benefit. Otherwise, it's about equalising balances. Now let's suppose you want to balance the superannuation accounts between couples by taking money out of the system. Now, I know this is complex, but bear with me here. Remember, if you're retired and you're over the age of 60, you have full access to your superannuation, and it can be withdrawn tax free.

So, let's supposing you take a withdrawal, let's say it's $100,000 and you take $100,000 out of your super account because you can it's now in your bank account. Okay. And then maybe, just maybe, you might change your mind and re-contribute that back into superannuation. I talked about in an earlier slide, money that you were putting from your bank account into your super account is tax free, and it forms part of the tax-free component.

So even though you took it out of the system, which could have come from a taxable component, when you put it back into the system, we know it goes to a tax-free component. That is one way potentially playing a long game to try and mitigate some of the tax certain dependents might be subject to in the event of your death.

This is a dangerous strategy to go alone without advice. You can make some big mistakes here because there are limits. There are ages in which you have to contribute money into super, and you will stop being entitled to do that at certain points. Please refer to session number two around the rules of contributing to super and never make a move like this without referring to a specialist.

I just want to highlight that there are questions you can be asking in this space to mitigate tax on death benefits. Another option you take the $100,000 out. It's in your bank account and you pop it into your spouse's account. Remember, if it's coming from the bank into super, it's tax free going in and it's always tax free coming out.

So, what you might be doing there is really converting what is currently a taxable component to a tax free. Very dangerous strategy without advice, because there are things to think about. Now, we talked about or I talked about the transition to retirement. And this is the last point I want to make with you. And it's also looking at why talking to advisers and knowing the long game can sometimes be really beneficial.

I talked about all the reasons you might use a transition to retirement account. One thing I never talked about was using it to redistribute money from one account to another account, or to turn what might be taxable money into tax free money. So, remember the transition to a retirement account. The money comes out and into your bank account when the money is in the bank account.

And then you put it back into super. I'll say it again. If it's going from the bank into super, it goes into the tax free component. We don't ask you where you got it from. Money in the tax-free component always leaves the system untaxed. It will not be taxed again. That means that adult child would not pay tax on that.

They only are subject to tax from the taxable component. You could also look at doing that into a spouse account if you're trying to equalise balances between you both to mitigate legislation risk, for example. These are complex strategies. They require knowing a lot of rules around limits and thresholds and who's eligible to do what. But the point I'm trying to make is the sooner you start talking to your financial advisers about these kind of things, the more options you're going to have to potentially mitigate the possible tax your dependent your family may need to pay on any death benefit. Now, speaking of financial advice, please remember that if you are a member of Australian Retirement Trust, there is lots of general advice available to you that was a lot of information and we do not expect you to have digested it, if it created more questions and answers, I always say that's a good thing.

It's now prompting you to look for more. So, start with general advice, asking questions, learning about products and strategies. The next step, then, is getting a little bit more pointed on how does this apply to me? If you are a member of Australian Retirement Trust, you can get advice about your membership with us. That means there is specific advice about how to set up an account, invest in your account for example. What we will not be able to do is give you advice on anything that sits outside of your membership. This is where we would strongly encourage you talk to your financial adviser and a lot of that estate planning conversation I just had about beneficiaries withdrawing money re contributing money. This is generally quite comprehensive types of advice.

So, I would strongly encourage you talk to your financial adviser on those strategies. And if you don't have one, please do reach out. And we might be able to refer you to somebody in the local area through the advisers on our national advice panel. Kane, there was a lot there, but we are close to wrapping it up so do you want to, I suppose wind it all up now with some next steps before we go to some Q&A.

KANE
Certainly. I just want to now just, I guess, wrap it up. What are some key next steps for you to be able to do? So, you heard Ruth right near the start talk about the retirement calculator. That is a fantastic tool to use. Put your own situation in there. Give you a bit of an idea. Am I on track? How might how am I looking towards retirement? Absolutely consider how your super is invested. Whether you're ten years away from retirement or you just about to retire, have a look at how your money is invested and that retirement calculator will help you work out, do I need to make my money work a bit harder? Am I on track?

Also, you heard Ruth talk about the you know, what's going to happen to super if something happens to me? Have a look at do I need to put a binding death nomination in place? Do I need to consider my estate planning? And then again, Ruth mentioned the advice options available to you. So, if you've got a financial adviser already make sure you speak to them or you've got access to our, advisers.

Being an ART member, you get access to our advisers to talk to you about your account if you want to do that. So don't forget, we also have some wonderful tools and calculators on our website. More than just the retirement calculator. You can have a look at that. We've certainly got other educational broadcast just like this one that you can attend as many times as you want, and we often find members do that is where they attend one. They get their three questions answered, but it raises five more. Keep coming back and you can learn as much as you want. We're not going to hold you to account if you attend 20 of them. That's great. Also, we've got a podcast series. So, there's lots of information, we get different guests on that one as well.

So, if you want to have a listen to our podcast, you'll get a lot more information out of there as well. Now, as Ruth said, we've got we've had plenty of questions coming in as we've gone through today, and the team have been answering those fiercely in the background. But we'll go through some in a moment before we do.

Just want to make sure that everyone knows, look, we are here to help. No question is too silly. And this is if this is your first time attending one of our seminars. Thank you for joining us, and we hope that we've answered a lot of your questions and to routinely a point. We hope we've raised more questions for you.

Don't be afraid. Give us a call. Jump on our website. No questions too silly. I guarantee if you're thinking it, we've probably had it asked 100 times. So, and one thing that we would ask of you is that you will get an email from us at the end of this, this event, and we really want to hear from you.

We really value your feedback. We want to hear what you thought. So, if you can please take the time to fill that out. That would be wonderful. Now we're going to get stuck into some questions. Now, I've got one locked and loaded Ruth, I don't know if you've been, been furiously looking over them, but, I'm happy to jump in.

RUTH
Go for it Kane, I'll let you start.

KANE
So probably, you know, I talked about turning your super into an income stream. A common question we get asked is, how much do I need to actually start one with? And that's a very easy question. With the Australian Retirement Trust, you just need a minimum of $30,000 to start one of our retirement income accounts. Check if you with another super fund, check what their minimums are.

But at Australian Retirement Trust, you're looking at $30,000 just to start one of those retirement income accounts. Nice easy one to start with.

RUTH
And one that I saw come through actually was about fees associated with the income accounts. Now we talked about two types three basically the transition to retirement and the income stream account, whereby you get to basically determine how often you're taking money out and how much you're taking out. The fees associated and the investment options associated with those two products are exactly the same as they have been during your accumulation stage.

So, you're not going to start suddenly seeing a huge, significant increase in costs, different investment opportunities, different investment portfolios. That's not the case. It is very transparent. It's a seamless move from one side to the other. No big changes there to the product features outside of the rules behind them being different on the front end, they look and feel very like your current super account does. That's another easy one to get us.

KANE
Yeah, nice. I'll jump into one of that a little bit meaty. We've been asked my better to live off, you know, I've got savings outside super so I'm looking to retire. Do I use those savings I've got outside? Or do I use my superannuation? Now that is I that is definitely a question I would say go and get professional financial advice on that, because it is a fully loaded question and it's a very personal thing as well. Some things to consider, I guess, is with your superannuation that is invested, it's, how is how are the returns performing compared to where my other money is? Am I able to put money in that money that's outside of super into super? The Government have deliberately made super a very tax effective environment, whereas off I've got investments outside of super I still could be up for some tax there. So, some different considerations there. And that's where it really comes back to what are you trying to achieve? What are my assets that I've got? And that's where an adviser can help you work out.

Well, you know what. They'll actually tell you exactly what you should do. So, just something to keep in mind.

Ruth
You touched on something there that came through, the Q&A as well, and it was around the taxation on investment earnings. The fund does not have to give anything to the ATO with regards to earnings tax. So, this is not a personal thing for you. So it basically means, as Kane mentioned earlier on, you can have the exact same investment option that you had before retirement and you might find that the net returns are a little bit higher because we, the fund, don't have to pay that 15% tax to the ATO, so that earning tax is nothing to do with your own personal tax rates, your own personal tax returns.

KANE
Good one. Yeah, that's a very, very common question we get asked there too. Another question I want to dive into here is and it's, it's a bit of a fully loaded question, but it's how do I structure my investments? So, when I'm working, I'm obviously got money going in. I'm not drawing on my super. So, if you know, there's market downturns, nothing I can do about it. I'm not accessing my super in that regard. So, I'm not I'm not, you know, realising that loss, so to speak. But when I retire, I turn my money into an income account. Is there anything that we can do there when there's market downturns? Now that comes back to all those investment options I showed you earlier, and it doesn't have to be just one option.

And you can have multiple options in your retirement income account. And you can choose what at what option you want to draw from if that's what you want to do. So, some people use, some of have you, as you might have heard, the term bucket strategy, for example. So, what some people do is they might put their pension payments or however much they need two years’ worth, three years’ worth. They might put that in a, say, a cash bucket or a defensive option bucket. And that's where they draw their payments from. And the rest of their money is in other growth options. And so, when there is downturns, they're not selling down those growth options to pay their pension payment. They're actually using that that defensive or cash bucket.

So, if you hear the term bucket strategy, that's what some people do to try and combat that. Well hang on, I've got all this money. I'm starting to draw down on it now. What can I do? That's something to think about. And again, a financial adviser can absolutely help you with that. So, something to think about.

RUTH
I'm seeing the word tax come a lot. We come through a lot in the questions. So, this is obviously an area a lot of you are thinking about. But there is a question here. It's sort of twofold. It's one about somebody who has received an inheritance and asking if they can contribute that to superannuation and what options they have to do it, but then they follow on and ask about what potential tax implications their own children may have for doing that.

So, it's a beautiful question that brings together a lot of points. First and foremost, and I've said this in previous sessions, if you have 100 or 200 or $300,000 in the bank account and you're putting that into super, remember I said it goes in tax free. And because it came from the bank account, we assume tax has been sorted out already.
It goes in tax free and it always comes out tax free. The fact that the money is an inheritance is here nor there. So, the reality is can you put an inheritance into superannuation tax free? As long as you've dealt with your own tax issues outside of super, just be mindful of the limits. You can't put as much as you want into super, there are limits to be mindful of. Refer to session two. But when that gets paid as a death benefit because you put it in after tax, it always comes out after tax. So, to answer your question on that component, would an adult child then be subject to tax? No, because it would be coming from the tax-free component.

KANE
Beautiful. Yes, tax is certainly a bit of a sticky topic. So, look, all I might ask my last question here because I'm just conscious of time. This is a very common one we get. It's if I retire, I meet the conditions, I get full access to my super. What if I go back to work later on?

What are my options there? Can I even go back to work? Well, yes you can. So, essentially the rules are for, you know, commonly if I'm, if I'm 60 or over and I've ceased in an employment arrangement. So, I've retired, I have no intention to go back to work at that time. Then I've got full access to that super that I've accrued up to that time.

But then let's say six months later or a year later, I'm bored, stupid or a great job opportunity comes up that's too good to turn down or really excites me. I want to actually do that. Then if I go back into the workforce, I can absolutely do that. Just be aware though, if I'm under 65 that any new super I accrue, I wouldn't be able to get access to that, but I'd still have full access to all that other superannuation when I first ceased my employment arrangement. So, just be aware of that. You can absolutely go back to work. You would retain access to that super. It’s just any new super you may not get access to until you cease that second job. Or once you hit age 65, then it doesn't matter whether you're working or not, you've got full access to all your super.

RUTH
One last one for me. There's a question here about someone who has said they're already retired and they have just received an inheritance. Back to the inheritance again. It seems to be a popular one. And look, the reason inheritance questions come through a lot. If you think about the typical age of members that are in here, you are probably all sitting somewhere between the age of maybe 55 to 65, and that is actually the most common age to receive inheritance from elderly parents.

And that's why we do field quite a lot of questions on this. But the question is, in relation to somebody who has already retired, set up an income account and is having regular payments paid into their account, no doubt, can they put that inheritance straight into the income account? And the answer is no. However, there are options to think about. So, when we talk about income accounts, whether you're fully retired and taking an amount out that you've decided on or whether you're using it for transition to retirement, I said something earlier on. They’re a one-way traffic system. Money can only come out of those accounts. For money to go into superannuation, you need a superannuation account, an accumulation account, so only the accumulation accounts can receive contributions in.

That doesn't mean you can't think about that. You could potentially open up a new account, make your contribution, remember the rules. Limits, age, requirements, etc. but you could make the contribution. Now you've got two accounts. You've got your income account and you've got your money in the accumulation. Now within the fund we will be able to blend them for you. It might require a little bit of admin to reverse the income. Join it all together and start fresh. If you didn't want to leave that amount in the super fund. So, there are options available to you, but one that is not available is to put it directly into the income account. Another very common one. Look, we have lots.

I know the team behind us have done a great job answering your questions through, through type typed responses. So, I do want to thank them because I'm sure we got a much easier job here today in front of the camera compared to they did behind the scenes. So, thank you, Education team, for your support. That does bring us to the end of today's event of the third part of our four-part series.

So for anyone who is maybe already in retirement or just wants to get a glimpse of the types of things people might be thinking about during retirement, the fourth series is around thriving in retirement, so we would welcome anyone, to join that particular event as well as we've set up until now we do hope we've created more questions than we've answered.

That's always the sign that you are listening. And please do reach out if there's anything we can help you with or to join the dots on certain points you may have heard. Thank you so much for taking the time to join us. Thank you for being a wonderful co-host Kane and we look forward to seeing you at another event soon.

RUTH
Take care everyone.

APRIL
Welcome everyone to our webinar on how to thrive in retirement. My name is April, and I'm joined by my colleague, Kane. Hi Kane,

KANE
Hello, April. How are you?

APRIL
So, we're going to take you through today one of our four, we've got four-part seminar sessions, and this one is our final session number four, which is thriving in retirement, because ultimately, that's what we want you to do. We want you to thrive in retirement. Now, before I do get stuck into the details, though, I'd like to make a couple of acknowledgements. Firstly, I would like to acknowledge our traditional custodians of our country throughout Australia, and also pay my respects to both elders past and present. I also want to make mention that Kane and I are just going to be providing you with general advice or factual information today. So basically, we can tell you what you could do, but we can't tell you what you should do.

Now, as I mentioned before, we are a four-part series, so just to let you know, behind the scenes today, we do have our friendly education staff helping us with questions that do come through. So, if you've got any questions throughout this webinar, please click on the Ask Us ask a question, and then Kane and I will try and get to those commonly asked questions. However, our education team are on standby to also answer those questions live. So, as I mentioned, four-part series. First one, we talk about planning for your retirement. So, the basics of what you really need to learn about how much you need in retirement, basically super 101, then we talk about growing your superannuation, so, contributions, investing, things like that.

Then there's also a pay yourself in retirement, where we dive deeper into the types of accounts that you can have in retirement that do pay yourself, but we're going to go through thrive. And what does thrive cover? Well, I will get Kane to run through a summary of the previous seminar, just in case you might want to attend that one. But we're going to go through investing in retirement, looking after your super so we're talking about scams and protecting yourself. We'll then also talk about the Age Pension, which I know is quite a popular topic. Then we'll talk about the types of accounts that you can have as a Australian Retirement Trust member. But what I'll do is I'll hand over to Kane now, and he's going to take you through what we covered off in the previous seminar, and also the investment options.

KANE
Thank you, April, thanks. All right. So, thank you everyone for joining us. And look, I just want to give a bit of a recap. So, for those you who may have been in the previous session, please bear with me while I just give a bit of a recap. But for those of us, those of you who are joining us for the first time, just so this one makes a bit of sense, and you can see where it flows, and it may encourage you to, you know what, I might want to go back and actually attend a session, the third session, if that's what is of interest to you. Alrighty.

So, what we talked about in the third topic, which was titled How to pay yourself in retirement, we looked at transition to retirement. It's a product. How does that work? Different strategies I can use, so I haven't retired, but how can I use this product? Then we looked at the different ways you can fund your retirement and how you can use superannuation and the different retirement products there, and we spent a bit of time also looking at the tax implications and what happens to super with beneficiaries there so and luckily, lucky last we just looked at how to manage your super when it comes to retirement. So, one of the key things we covered off was the different sources that are available to you in retirement. Now I appreciate a lot of our viewers. You might already be in retirement, and you might be more experienced at this than I but looking at the sources of income you've got available to you, you might have your own savings, your own assets, so bank accounts, shares outside of super, certainly, hopefully you've got some superannuation, although we do know that a lot of retired Australians don't have as much super as a lot of the younger counterparts, because you didn't have super your whole working life.

So, it's certainly not as may not be as big an income factor as it will be going forward, but hopefully a lot of our viewers have done well there and then there. Can also be the third pillar that we talk about when it comes to retirement income, is the Age Pension that could apply to some of our viewers. All right, so when we're looking to, how do we kind of link those two, it's like, well, how long do I need this money to last in retirement? So, we've got everyone's favorite topic a bit more, but life expectancy. How long am I How long do I need my retirement funds to last? How long am I going to be retired? And often it can. Be as long as we worked for.

So, I might have had a 30-year working career. I might be retired for 30 years. I've got to fund that, or I might have longevity in my family. So, that might mean that I'm actually probably going to outlive my life expectancy. So, you need your income to last you for quite a bit, and that will, that can and does often adjust over time. So, often in the early years of retirement, a lot of people spend more of their money because they're healthier. They're so keen to get out there and experience life and travel. So, they often spend a lot more than they do in the later years of retirement, where there might be less mobile or they've done everything, all the big ticket items they wanted to do, they're more concerned just about seeing family and just in a routine that can go the other way, though, if we have health issues. So, sometimes spending goes up because there might be some expensive health issues that come across.

So certainly, things to keep in mind in retirement. So, I've touched on some of these, some challenges that retirees face. So, you've got those one-off expenses that, Hey, I didn't budget for the car, you know, blowing up. I didn't budget for one of the adult children getting in trouble, and they need financial help. Certainly, got inflation risk. That's a very real situation where, how do I balance investing my retirement money and protecting that balance versus, well, hang on, inflation, cost of everything's going up. How do I keep my purchasing power going? Spending changes as I touched on, lifestyle changes in retirement, longevity, risk.

Will I outlive my retirement savings and certainly everyone's favorite legislation changes. We know that the government can and does tinker with things from time to time, certainly a brave government, if they ever tinkered too heavily with something like the Age Pension, but they can do that, so certainly a challenge that we recognise there for retirees. Now, just wanted to show this. Thought this might be a good graphic to have a look at. So, between the ages of 65 to 85 what we found is that your spending can reduce. You can see the amounts there per fortnight for a single or for a couple, and you can see how this is an average that we we've that's been discovered, that spending does go down as you get older. And what we often see is, though, you know, medical out of out of pocket, costs might go up. There might be more household cleaning because you're less mobile, you can't do it as much yourself, but then other costs will go down. I'm not traveling around as much, I'm not driving as much, not going on those holidays. I'm not eating out as much. I'm happy just to be at home and just stay local. So just a bit of a snapshot into the changes that can occur when it comes to retirement. So, and as you can see there, the overall spending on average, was about 7% decrease in spending between those ages.

Certainly, when you when it comes to retirement, looking at future care expenses, that is a very big consideration. And I can't stress this enough, this is definitely a very specialised advice area as well. So, you can see a resource there the mygedcare.gov.au, site on your screen. Really great place to start. If this is something that you are about to experience, or your family is about to experience, I can strongly recommend that there is advice firms out there that specialised in aged care and really do your homework. And if you need to seek that specialist financial advice. They are experts, and they can help step you through that and really encourage it. If it's you and you're looking to go into aged care, involve your adult children, or whoever's going to be helping you administer and look after you and your estate as you get older, because it's very important that they go on the journey with you, and they understand what's going on and what's involved as well. All right, now I just want to move into retirement investments.

Now, I would say, when should you review investments? Anytime. Anything significant changes in your life, and certainly, retirement is one, one of those significant changes, and it's very important, as I touched on about your life expectancy and how long you're often going to be funding your retirement. It doesn't necessarily mean that I just bury my superannuation, for example, under a rock and just hope it lasts. I need to put some thought into how can I make this money work for me in retirement, and how hard do I need to make it work?

So, we'll get into that in a bit more detail. So, just starting at a bit of a high level, a bit of a refresher, for anyone who may not have heard much about investments, but when we invest your money, we're looking at different what we call asset classes. And so what you're looking at on the screen there is an asset class shares. They're an asset class and they're a growth asset. So, they're designed to try and I guess, turbo charge my returns, they're driving the returns in my superannuation, if I've got exposure to them, but they can be a very bumpy ride. So, they can get me the high returns, but they can also get me the big losses. Because, as we all know, if we watch the news, share markets can be volatile. Now, if I look at the next asset classes. You've got cash as an asset class, fixed interest or bonds. They're our defensive assets.

They're more designed to protect your money, rather than try and really grow your money. And then we've got other asset classes we can give you exposure to. We've got private equity, we've got infrastructure, we've got property, and our in-house investment team will utilise all these different asset classes to build investment options that are available to you. What are those investment options? You do have a lot of choice, and we basically have a range of investment options to try and cater for everyone's personality types or risk appetite is another way you might want to say it. Now if you look at the options in the blue box there. They're what we call our diversified options. They've been built by our investment team. They've got a mixture of those asset classes in there. And the names of each of these options pretty much gives away what they're trying to achieve. So, if I pick on the top one there high growth that's got a heck of a lot of shares in it.

So, it's really designed as the name implies. It's chasing high growth. It's going to be a very volatile option, but over the long period of time, that should get me high growth. I've just had a very roller coaster ride getting there. If I pick on options like the Conservative or Conservative-Balanced, they've got more of those defensive options, so more cash, more bonds, that kind of thing, more designed to be safe and secure, still got some exposure growth assets Absolutely because they're trying to keep your money growing, keep you ahead of inflation. If I pick on the asset class options there, you can see this is where you could build your own portfolio. You don't have to use the pre diversified ones that our team have built. You can actually build your own I might want 20% in Australian shares, 20% in bonds, 10% in the list of property I can do that. I can structure my own portfolio. I can mix and match across the asset class and the Diversified options. I can have any combination, any number of these. It doesn't have to be just one option. I can have multiple options in these, and I can shop and change that as much as I like.

Now I wanted to show you this one here, the Balanced Risk-Adjusted option. The main reason being if you've retired, or if you're about to retire, and you put your money into one of our Retirement Income accounts, and you do not make an investment decision, which you don't have to. If you don't tell us how you want your money invested, we will put your balance in the balance risk adjusted option. Now it's a bit of a mouthful, but essentially what this option is designed to do, if I pick on the purple and yellow blocks of color there, that's your share exposure, that's those turbocharged growth assets. But then always also want to point your eye to the green section there, which is the fixed interest, or primarily bonds. And so what this option is designed to do is I've still got good exposure to share. So, when the share market's going well, my money is going to be growing nicely, but it doesn't have as much exposure to shares as other options. So, therefore, if they're getting returns up here, because the share market's doing well, my balance risk adjusted might be down below them because I don't have as much exposure shares.

Now that is really important when the share market crashes, these options that have got a lot more exposure are going to drop a lot more. My Balanced-Risk Adjusted won't drop as much because it's propped up by a lot of the other assets there, particularly the bonds designed to perform in a market when shares are going backwards. So, it's, it's that smoother ride we talk about.

The highs won't be as high, the lows won't be low, so your returns will be a bit smoother through there. And just to I guess, reinforce that story, what we've got here is the returns for this Balanced-Risk Adjusted option, from 2004 through to 2024, so a 20-year period. And you can see there that overall, the rolling 20-year returns being about 7.8% return per annum, but you can absolutely see there's been some negative years in there. Okay. So, very important investment options with shares can and do go backwards. So, very important to think about. But also what this graph is hopefully showing you is think about the long term now, you can see those two years in a negative everyone remember the lovely GFC. That's what happened there. And if I jump ahead to COVID in 2020 you can see that this Balanced-Risk Adjusted option was pretty much flat lining there. So, just to again, take that long term view when you're looking at any investment option.

Now, wanted to share this one with you. I think this is a really good story. So, if we go back to COVID, and so this graph here is showing one year's worth of returns. It's from sixth of June 2019 through to sixth of June 2020, now we all know COVID Hit early in 2020 so this is what you're looking at here is someone who I've started Retirement Income account in June 2019, I've got $300,000 in it, and all I've decided I need out of this account is I'd need to draw 5% okay, we've just chosen 5% to make it easy. Now, if I had cash COVID hits, I started with 300,000 I've drawn out 5% and with. Cash returns. A year later, I've still got about 289,000 a half in that account. Now what if I had my $300,000 Retirement Income account in the Conservative-Balanced option?

You can see it was doing well until COVID hit, then the share market dipped, and you can see where I would have ended up after one year. And then, if I go ahead, Balanced-Risk Adjusted, and then the Balanced option, which has even got more share exposure again. So, some people might go, you beauty. I'm glad I'm in cash. Look how smooth that was. I didn't suffer the big dip. But this is why it's important to look at the long-term view. Okay, how long is your money going to be invested for? If I bring this out on a bigger picture, let's say I go back to 2007 so before the GFC, and then I go right through to last year.

So, we're now looking at about a 17-year window. There's cash. I've started with 300 grand. I've drawn 5% per year. I've still got about 226 odd thousand dollars seventeen years later, there's the Conservative-Balanced option. So, you can see, even though COVID, really, sorry, GFC smashed it in 2008 and again, so did COVID In 2020 even though I started with 300,000 I've been drawing 5% a year. I've now actually got more in my balance than I started with. And it paints the same picture with the Balanced-Risk Adjusted and with the Balanced option. What I want to highlight, though, is, and some of you might be looking at this, look at the amount of ups and downs in those other three options that have got a lot of growth assets in them compared to the Cash option. So, that's what you need to take into account. How do I cope with those ups and downs?

Am I okay with that? Am I able to take that long term view, or does the site of that smooth cash line? Does that give me that sleep at night factor, that that peaceful feeling, even though my balance is going backwards? Okay? And it doesn't have to be one or the other. That's where I can look at a blend or a mix of these options. Now, I thought this might be good to show as well, where I'll just compare Cash and the Balanced-Risk Adjusted options.

So, basically the same timeline, from 2007 through to 2024 someone starting out with $300,000 in an in an income account and just drawing 5% so in in 17 years, the Balanced-Risk Adjusted they've drawn their 5% a year. Over that 17-year period, they've had about 200 and almost $286,000 in income over that time, compared to 5% getting drawn out of the cash they've drawn about $250,000 so about a 25, $26,000 difference in income received over that 17-year period. And if I click ahead to the actual balance, you can see that the Balanced-Risk Adjusted balance has gone up, because, again, even though it's been up and down and you've been drawing on it that period of time, because of those growth assets, over a long period of time, my money has grown cash. Obviously my 5% I've been drawing has been higher than what my cash returns have been, so my overall balance has been going down.

And then if I jump ahead to say, well, what would my income be next year if my balance was 372 odd thousand dollars, 5% I'm getting over 18 and a half thousand cash. 5% of my 226 I'm only getting just over 11,000 so what that is saying to me is that, yes, cash is safe and secure in regards to share market risk, but it's certainly not safe against inflation risk. So, if cost of everything's going up over time, and then you've got your Balanced-Risk Adjusted, which has got some of those growth assets, so yes, it would have been a bumpier ride if you looked at those 17 years in isolation, but over a long period of time, it's still generating a good income and the balance is growing. So, just wanted to leave that with you there. Thought that was going to show it.

Now, if you do want to find out any more information, our Australian Retirement Trust website has plenty of resources on there. You can have a look at all the investment options, and I really encourage you have a read of them. What are they trying to achieve? How are they invested? What is the level of risk? How have they historically performed? For me? So, have a read of those. And remember, it doesn't have to be one or the other. It can be a combination. And really encourage you can see the risk profile quiz on the screen. There really great little exercise to do, something similar to what a financial adviser will do with you to find out what type of investor are you, and therefore what type of investment options might be appropriate for you. So, really encourage you to take advantage of that now that is enough for me. You're probably sick of hearing from me, so I will throw over to the amazing April to tell you how to look after your super in retirement.

APRIL
Thank you, Kane, I'll allow you to have some water, because I know it gets a little bit hard when you talk for that long. So, thank you. So, yeah, Kane, did talk about the investments. Just a question that has come through, can I be more invested in more than one particular investment option? Yes, you can. So, as Kane mentioned, you might be able to do 20% in one different option, 60% in another and then 20% in another. It's completely up to you as to how you want to invest your money. So, now I want to talk to you about looking after yourself and your superannuation in retirement.

Now, firstly, I want to let you know you'll probably be receiving your annual member benefit statement every year. So, just check on your member benefit statement, make sure everything's as it should be, so that, you know, no, no money's coming out, that's unexplained or anything. Have a look at your fees, your performance, as Kane was talking about, there, your investment performance, you know, have a look at your gut check. Were you okay with, you know, how that investment option had performed? Are you looking at switching those options?

And another question that we do receive as well is, does it cost me anything to switch my investment options? No, there is no cost to switch your investment options. So, have a look at that. And maybe you might have insurances which you weren't aware that you have, and those insurance premiums are deducting money from your account, so see if you really do need those insurances in retirement. Now to keep your superannuation safe, that's really important for us, so we want to let you know, in terms of scams and people contacting you, we will never call you from an unknown or a blocked phone number. So, if somebody gives you a call and says, I'm from Australian Retirement Trust on an unknown number or a blocked number, it is not us also member online login details. When you give us a call, we do not ask you for your member online login details. And in fact, we don't know your password. We can reset your password for you, but we don't know it. We don't need it.

So, if anybody calls you and asks you for your member online details, please be safe. We do not want you to give out those details. And also, we do not ask for payments over the phone. So, if you get those calls, no, it's not Australian Retirement Trust. If you were curious at all about a phone call, what you can do is hang up call our contact center. We generally make notes there to say that we've contacted you. So, if you are suspicious, please give us a call and we will let you know. Maybe we might need to add a bit more security on your account. If you wanted to know more about superannuation scams and how to protect yourself. We do have a Super Insider podcast, which is episode 12 about protecting yourself. So, if you want to dive a little bit further into that information, have a look at our Super Insider podcast. And our Super Insider podcast has different topics as well.

So, you might want to check those out. Another thing to be mindful of is elder financial abuse, and more often than not, you know, the people that we choose to look after us in retirement are very honest and trustworthy people, but we do hear that sometimes, unfortunately, there is elder abuse. What does this look like? Maybe you might have a Power of Attorney, and you're leaving up to somebody to help you with your finances. They might go shopping for you, but as they, you know, buy your groceries, they might be buying their groceries at the same time.

So, this is where you want to keep an eye on it. I said you'll get your member benefit statement annually. Keep an eye on your money that's coming out. Is that the right portion? Or are you maybe you know if you're if you're giving money away, do you have the food in your fridge? Why don't you have food in the fridge if somebody's going to buy you groceries? And now this might not be for yourself, but one of your friends or a loved one, you might see that this might be happening. And generally, if your gut tells you something wrong, it's probably wrong. So, just ask them some questions. Maybe tell them to call the superannuation fund if there is those things happening.

So, we just want to make sure you look after yourself. And another thing to do. And this is what my mum did. I was very proud of her. She was very proud of herself. She made a folder of all of her paperwork, so that if, in the event she passes away, we know exactly where to go her top drawer. And all we do is we take out this folder, and she's provided us with where her will is, who the enduring power of attorney is, enduring guardian, all these other information, advance directive, care, financial plan, and who she's nominated, but also she's got, who's the phone bill with, who's her bank account with. So, who do we need to contact if, in the event she passes away? Now I'll go through these six things on the screen here, a will. So, this is important if the if in the event you pass away, who you want these funds to go to? So, we will talk about who you can nominate as a beneficiary on your super but it's really important for your estate planning purposes to have a will in place. An enduring power of attorney, you can have one person, two people on this they look after the financial matters for yourself, especially if you become incapacitated. So enduring Power of Attorney, they look after your finances. An Enduring Guardian, they look after your medical plan.

So, if you become unable to make those decisions for yourself, they will help you. They will help the doctors and medical staff work out the appropriate medication for yourself. Advance Care Directive. Now this is where you would nominate how you want that medical experience to, I guess, play out, especially again, if you become incapacitated. So, you might be able to treat, to ask for medical treatment that you may say, I want to refuse medical treatment if, in the event this happens, so you can do case scenarios as to say when you would like to get further medical treatment, or when you'd like to refuse medical treatment. Financial plan as well as I said, my mum's put this folder together, put all your finances together, all your details together, just to make sure that it's all in one place and everyone knows where to go, also nominating a beneficiary.

So, this is where you nominate who you want your super to be paid to. Now you may not be aware, or people assume that when you pass away, your super fund will just pay as per your estate or as per your will, and unfortunately, though, that is not the case, based on legislation. A super fund, if there's no nomination there, we have to firstly look to pay to dependents. If there's no dependents, the second step is the will so who you can nominate, and this is really important to complete what's called a binding death benefit nomination form. You can nominate your spouse, any child of any age, even if they are over the age of 18, you can nominate someone in an interdependent relationship with you, or someone who is financially dependent on you. What's an interdependent relationship? Then they might share. You might live together. You might share the bills together. You might have a close relationship with you. So, these are the people that you can nominate. However, if your person doesn't fall within this nomination list, what you can do is you can nominate them in your will. So, let's say you want to leave money to a charity or a neighbour, or say grandchildren, niece, nephew, somebody who is not financially dependent on you. What you can do is you can put it in your will.

So, you express your wishes in your will, and you ask the super fund in the binding death form to be paid straight to a legal personal representative. Then it bypasses the super fund and it goes straight to your estate, and they deal with it from there. So, really important to add that binding death benefit nomination on there. Now, if we look at the accounts and where you can put these nominations, so binding death benefit nominations, they pay out a lump sum of superannuation. So, binding death benefit nomination, anything your account pays out as a lump sum to that person. Preferred beneficiary, you can let us know who you may want those funds to go to, but it's not binding, so it can be contested by law if somebody was to say that that isn't correct. So, the safest way to do it is put a binding death benefit nomination on there.

There's also reversionary beneficiaries, though. So, reversionary beneficiaries are a little bit different. They will go towards income accounts. So, income accounts are basically meaning if, in the event you pass away, you want your income account to be sent, for example, to your spouse so they receive your income account. All the income stays within super and they effectively have that account as themselves. So, particularly if you're over 75 and there's those restrictions that you can't add money in if you don't have a reversionary on your income account, and you only have a binding death benefit nomination, there is no option to put the money back in unless you can make, you know, contributions to your super so if the importance is to keep your money within the super environment, particularly if you do have a spouse, you can nominate a reversionary beneficiary. They take number one place. So, if you've got an income account, firstly, look, do you have a reversionary beneficiary? If so, they'll pay as per that reversionary beneficiary, you can have a binding death benefit nomination on the account at the same time, but reversionary beneficiary trumps a binding death benefit nomination when we talk about income accounts.

Now, in terms of a Lifetime Pension option, which I will go through with you shortly, there is something that's called spouse protection. So, again, we can still keep it within the super environment, but we want to cover our spouse for the rest of their life. And I will dive in a little bit more detail on that Lifetime Pension option. But just have a look at those options there and make sure that your loved ones are listed. And that you are comfortable with who you have nominated, you might even want to seek some planning or financial advice, with financial advice for estate planning purposes. Now, there is something to consider, when those funds get paid out, if, in the event you pass away, what happens is, if they are going to a dependent, they receive those funds tax free.

Okay, so happy days. They receive those funds tax free. But what happens if my money is paid to a non dependent, so say, for example, my adult child, my adult child is, say, 50 years of age, and they are totally independent, not financially dependent on me, then they may not be considered a dependent. So, what happens is, non dependents, if we pay to them, they have to pay taxes. So, it's up to 17% tax they pay on the taxable portion of your account. You can have a look at that taxable portion on your member benefit statement so you can see if, in the event you pass away, who's going to be paying those taxes.

You know, you can get estate planning purposes to see how you can adjust those taxes. So, if that's really important to you, give us a call, and we can maybe direct you to a estate planner as well. So, let's have a look at thriving in retirement, because that's the name of the game of this seminar. So, what might be good in retirement, living a full life? So, it may or may, may or may not be of interest to you, but there's been some studies done that you can live longer if you've got more meaningful relationships, you've got more contentment in retirement, and you've also got that freedom of choice to do the things that you want to do. So, make sure you know you've got your social network, your activity set up in retirement, so that you can really thrive and live as long as possible with a healthy retirement. Now I'm going to send over to Kane, which is one of the most popular topics Age Pension. So, Kane, take it away.

KANE
Thank you, April. Alright, so going to dive into the Age Pension a little bit. Now, appreciate that some of our viewers, you might already be on the Age Pension or getting some type of entitlement there. So, just bear with us, if that is you. But also hopefully you might pick up something that you didn't know about as well. So, with the Age Pension, for those you haven't reached it get you can actually apply for the Age Pension once you hit age 67 you must also have 10 years plus a residency. And importantly, they will always apply an income and an assets test to see what you're entitled to. If anything, they'll always apply both of those tests. All right now, showing up on the bottom of the screen there, you can actually see the full amounts per fortnight, what the Age Pension is sitting at the moment.

And you can see that there is an amount there for a single or an individual, and then an amount there for a couple. Okay, so that's the maximum entitlement. But as I said, they will apply the income and asset test to see whether you're entitled to that, or only a part pension, or potentially nothing at all. Now important for anyone who hasn't reached age 67 yet, and you're thinking about applying for the Age Pension, just be aware, you can apply up to 13 weeks before you turn 67 and I really encourage you to do this, just so you're not waiting. So, if you are entitled to it when you turn 67 you can hit the ground running, and those payments can start almost immediately. So, great little tip to keep in mind there. Now, one thing that we wanted to talk about here is a lot of people think that when I'm retired, I'm getting the Age Pension. I can't earn any income, otherwise it's going to wipe out my Age Pension. Not necessarily the case. There is a thing that the government established called the Work Bonus, and essentially, I can earn a certain amount per fortnight before it impacts or is included in any of my Age Pension assessment. So, really encourage you to have a look at that, because there's an amount per fortnight that I could earn. So, I might want to do a little bit of casual work, or I've got some opportunities to earn a bit of pocket money, which could be great.

The extra money could be helping me, but it also could be just that social outlet and that purpose that you attach to doing a job as well. So just be aware that there is the potential to earn some money, and it does not impact your Age Pension on entitlements. So, encourage you have a look at that. The Work Bonus is what it's called. If you want to find out more about that. Now want to spend a little bit of time talking about deeming so when it comes to the income test, they'll look at if you're earning any type of income, you're getting a rental income from a rental property, that kind of thing. But the biggest area of confusion we find around the income test when it comes to Centrelink is my financial assets. So, what Centrelink will want to know is, what is the total of your financial assets, what's the balance? So, you can see there on the screen what's included under the financial assets.

So, anything I've got in bank accounts or term deposits, they want to know the total dollar value. They don't care what interest rate it earns. They just want to know how much have you got in the bank? I've got three grand. I've got 10 grand over here in a term deposit. They also want to know the value of Have you got shares outside of super or managed funds? What's the balance of your superannuation after you hit Age Pension age, or if you've got it in an income stream, they want to know the value of that. And also gifts. There's and I'll touch on that in a second as well. So, what they do with deeming is they will assume the government sets the deeming rate, and essentially the deeming rate is just the assumed amount of income those financial assets earn.

So, you don't have to report that my bank account earned me 3% my term deposit earned me 7% my shareholding got me 7% they don't need to know that. They just want the total dollar amount reported, then they apply the deeming rates to it and to be fair to the gum, the deeming rates are generally very favorable compared to what your financial assets are actually earning. So, often the deeming rate, or the income that they deeming that it earns is lower than what you actually are earning, and if you're earning more than the deeming rate, great, they don't care. That's more power to you. And I just want to just finish off on this is that when you've got an income account with your superannuation, they don't care what you are drawing out of that.

So, say I've got an income account set up, and I'm drawing $30,000 a year out of that. They don't count the $30,000 as income. They just want to know what's your balance of that income account? Ah, it's $250,000 great. They're going to apply deeming percentage rates to that balance, not the fact that I'm drawing $30,000 a year income. That's a common area of confusion that we come across. All right, now the other area that we get a lot of questions around is gifting. So, some people think I'm going to apply for the Age Pension soon, but I want to give the kids, my adult kids, some money. I'm going to give it to them first and then apply for the Age Pension. Centrelink have what we call the gifting rules in place, and they're there for a reason.

They will combat that kind of scenario. So, effectively with gifting, I can give one there's a one year limit of $10,000 in a financial year, or no more than $30,000 over a five-year period. Now what I want to point out here is you can give as much of your money away, or all of your money away, if you want to. But just be aware that Centrelink anything over and above these gifting limits, they will still class it as an asset for you, so it will be accessible when you apply for the Age Pension. So, I don't want you to think that I can't give the kids I want to I'd love to give the kids $50,000 each. You can do that. Just be aware that anything above the gifting limits is going to be included as an accessible asset for you when it comes to Centrelink. Okay, so you can give money away, but there is gifting rules in place to factor that in, and just be aware five years prior to you applying for the Age Pension, they will also look at any money that you've given away in that period as well. So, just be aware of that. And again, a lot of resources online if you want to have a read about the gifting rules as well, because it is a hot topic in particular.

Now, what happens if I don't have enough income to live on? I'm retired, I've set everything up. I'm looking at all the income I've got available to me. What can I actually do? So, certainly, probably the most obvious thing is, do I need to adjust my lifestyle? Review all my expenses. Easiest way to do this is, if you live by a budget, what are some things I can cut out? Or can I substitute? Is there cheaper substitute? Is it I love going on a weekend away every few months? Or do I need to cut out and skip the odd one instead of, you know, frequent holidays is infrequent instead of five nights? Is it a three night, you know, instead of eating out at my favorite restaurants, do I need to space that out or dial that back a little bit? You know, buying different brands of things?

That's the kind of thing. So, you need to think about, Do I need to adjust my lifestyle as I touched on, the Work Bonus? Is there the ability to do some part time or casual work, get a little bit of extra income, is that something that's available to me to help with the shortfall, review my retirement savings? So, actually, have a look at what I've got. Is it set up the right way? Am I maximising everything I can? There? A big consideration is my investment options. So, I get it, I appreciate that. It's a very different mindset when you're working, you're earning a salary, money's coming in, you're growing your super to when you retire, effectively, that tap is turned off. What money you've accumulated at that point of retirement, that's the only money you're generally going to have, and that's got to last you into retirement.

So, I appreciate that, it's a very different mindset, but trying to. Appreciate also that, hopefully you live a long and healthy retirement and you've got a long investment time frame. So, can I make that money work a little bit harder for me? And it doesn't have to be every dollar. It might be just, I've got a bucket of money that I'm going to get working harder. The rest of it, I've still got safe and secure in an option that helps me sleep at night. So, that might be something you need to look at downsizing. So, there's a rule in place, and I will touch on this, but downsizing, where the Government have brought in a scheme where I can downsize my existing family home and buy something smaller and use the extra proceeds to boost my super and there is some private and also Government schemes around tapping into your home equity, so if you own your own home, I can access some of that equity, never more than the value of my house, and it's designed to that's not realised or doesn't have to be paid off until I sell that sell, that that place is sold. That could be a way to generate some extra income to, you know, ensure that you're living with dignity and having a great retirement.

Now, just want to touch a little bit on the downsizer. So, again, Google is your best friend here. Or jump on the Australian Retirement Trust website we've got just in the search bar. Just type in downsizer, and you'll find a whole page dedicated to this. So, effectively, as I touched on, you can downsize your family home, because often what happens you've got the bigger home, raise the family, the kids grow up and leave, and you're left with this bigger house, you don't need it in retirement. I certainly know I don't want to be mowing lawns when I'm retired as much as possible. So, I might sell a $600,000 house and buy a $300,000 unit.

So, I've realised this extra money, and I under this scheme, I have the ability to put those proceeds into my super to boost the funds I have available to me. Important caveat to put out really highlight that bottom bullet point there, just be aware your principal place of residence is not counted for the Age Pension. If I downsize. So, if I sell, stick with that example. If I sell the $600,000 house and buy a $300,000 unit, I've now got an extra $300,000 of dollars of accessible asset, okay? So, if I've put it into super it's now included in my financial assets. It is accessible with my income and with the assets test. So, just be aware of that. Okay, and there is certainly some different criteria and eligibility requirements. So, just make sure you do your homework or get advice on that. Just a couple of other things to touch on. So, you know, there is some different age milestones that influence things. So, if I'm 55 or older, then I can make that downsize a contribution. If I'm eligible again comes, you know, how long have I been in the home and the proceeds, that kind of thing.

Between 60 and 64 I can't split eligible contributions with a spouse of 60 or over, if they're permanently retired from the workforce, or if they've left employment at age 60 or over. So, again, have a have a look at that. And between 67 and 74 if I want to put money into super, I need to satisfy what's called a work test, and that means I must be working a minimum of 40 hours in a 30-day consecutive period to be able to put money into super in that financial year that I've satisfied that work test. So, just be aware a few limits there. Again, pretty easy to generally easy to find information like that if you want to have a look on the website or again, give us a call. Okay, no question, too silly. This is what we do for a living. We're around super day in, day out, so you can always ask us if Hang on, I remember something about a work test, just give us a call.

KANE
Alrighty. Seniors health care card. Now this health care card is designed for people who okay, I may not be eligible for the Age Pension, but there is a seniors health care card available, potentially available. So, you've got the income thresholds there on the screen. So, just be aware they will have a look at income. But there is no assets test applied to this seniors health care card. It can give you some concessions on some health and discounts and that kind of thing when you've reached Age Pension age. Now if you want to find out more, as I said, we've got a lot of resources online. We've got a whole section dedicated to the Age Pension, and if you're struggling to find it, as I said, we've got a search feature on the Australian Retirement Trust website. So, just type in the words you think, and you'll generally find those, it's a best way to zoom around our web page. Now that is enough from me. I'm going to throw back to April now to take you through all of ART’s income accounts.

APRIL
Thank you, Kane. And I'm going to do a shameless plug. Kane has actually put someone in the hot seat on one of our podcasts where he's asked an expert all these pension questions. So, have a listen to that one. There's been a couple of questions that come through. So, before I get into the income accounts, somebody's asked a question here. So, can I not contribute to my super if I'm no longer working? So, I think this is when Kane was referring to the works test. So, the works test, you need to meet this if you're wanting to make a tax deductible contribution. So, it's only if you're looking to claim a tax deduction. So, between 67 and 74 if you want to claim a tax deduction, you need to work at least 40 hours in a 30-day consecutive period.

When you reach the age of 75, you're unable to put more money into your super unless it's that downsizer contribution. So, good question there. So, let's go get stuck into the income accounts now. Now there's you might be aware of all these different products here on the screen when you're working. You might be used to the accumulation or Defined Benefit account. You might have had a transitional period where you may have dropped your hours and you opened up a transition to retirement, but we're thriving in retirement today.

So, we're just going to focus on our retirement products, which are these two on the side here, our Retirement income account and our Lifetime Pension option. So, let me go through the benefits of pros and considerations with these two styles of accounts. You may not have actually heard of the Lifetime Pension option because it's only been available for a few years now, but the Lifetime Pension is an account that is designed to pay you an income for the rest of your life. And as you saw before, when Kane went through the investment options, you saw there that some people over a 17-year period had more money in their superannuation because they were only drawing down 5% so we've actually found in research that retirees are very reluctant to spend their nest egg, but if they knew of the compounding growth, which you're here today to learn about, this, you may be able to spend a little bit more. And this Lifetime Pension gives that comfortability, that you'll always have an income and potentially above Age Pension as well. If you're wanting to purchase this account, though, you are in it for the rest of your life after you've passed six months cooling off period.

So, if you purchase this account, you find it's not right for you. If you've passed six months, you are no longer able to come out of that. It is stuck there, and you are unable to access those funds, but you will receive an income for the rest of your life. There can be some benefits with the asset test for Centrelink entitlement. So, if you're asset sensitive, this might be an account to open as well, and you receive fortnightly payments for the rest of your life. So, even if you live up to your 120 years of age, you will still continue to receive that fortnightly payment. Things you need to consider, though, with this Lifetime Pension. That fortnightly pension, the benefit is, you'll receive those payments for the rest of your life. You can choose to have your payments continue to your partner. So, what happens is if, in the event you pass away and your spouse is still alive, you can put on what's called spouse protection, so we can then continue to pay your spouse for the rest of their life.

As I mentioned before, if you're asset sensitive and you're wanting to try and get a little bit more Age Pension. This is where the account might suit yourself, and if you've passed away. Now, this is one of the biggest questions that we do receive on this account, if I purchase this account, if I say I purchase it with $100,000 and you've only paid me $50,000 what happens to the remaining $50,000 well, that will get paid out as a death benefit. So, you'll have the comfortability knowing that that could be also paid out. Things to consider though, it is invested in our Balanced Risk Adjusted option. So, we are planning to increase those fortnightly payments year on year. But as Kane showed you before some years we do receive that volatility, so your fortnightly payments, based on the first of July return will go up or down. You can only open this account between the ages of 60 and 80. After six months, you cannot exit this account. It's also not flexible.

So, if you put money in this account, you're getting fortnightly payments. But if you need a new car, you can't say, can I take out $30,000 from my Lifetime Pension? You cannot. It doesn't offer you that flexibility, but a Retirement Income account can offer you that flexibility. So, we've got a Retirement Income account, the flexible one, which is one of our most popular accounts. It provides you a payment each year, so you might choose to have those received either annually, fortnightly, monthly, quarterly. The initial transfer, you just need to open it up with a minimum of $30,000 and you can elect that frequency. So, maybe when you're working, you are receiving monthly payments or fortnightly payments, so you're used to that setup. So, what you can do if you retire, you can then substitute your superannuation as your income, and you can elect to have those payments. So, let's go through these pros and cons. So, you can adjust your income.

So, if we look at the Lifetime Pension option, that you cannot adjust that it's purchased, and when you purchase it, there is a set amount for you. So, you can have a look at our calculators to see what that is in a flexible income account, though, you can adjust the payments that you receive as long as you're accessing the minimum percentage. You can take out lump sum withdrawals if and when you need it. So, if you need that new car, holiday, fridge breaks, things like that, you can take out lump sum withdrawals from this account as well. Benefits are also tax-free income over the age of 60. And this is one of the common question we get asked, and we can't really answer this, but the question is, should I be in an accumulation account, or should I be in an income account? Well, one of the benefits of having money in an income account is that there are tax-free investment earnings. So, even though you're over the age of 60, if you're in an accumulation account, you do pay that 15% tax on your investment earnings, whereas the income account, you don't pay taxes on those investment earnings.

So, that can actually be a reason that some people might want to go to the income account. However, it is an individual preference. You do also get to choose where your funds are invested. Kane mentioned all those different investment options available to yourself. And also, if you've been with Australian Retirement Trust and you're wanting to open up an income account, you may also receive the Retirement Bonus. So, what you might see on your member benefit statement, there might be, like, a little bit of a section there that says Retirement Bonus. So, this might be an amount that goes into your super above and beyond what you transfer over from an accumulation account. So, it's a little incentive there to stay with Australian Retirement Trust.

What else to consider, though, in this flexible account, you can access this account you know whenever you wanted those funds, so it may run out if you like to spend your money. It's also 100% assessed by Centrelink, and the minimum Age Pension does need to be taken. So, remember how I mentioned earlier there accumulation versus income account. So, income account yet that can have those advantages with tax-free earnings. However, the accumulation account, you don't have to access any money, whereas in an income account, you do have to access those funds. And if you wanted to ask those questions, should I be doing this? Remember, you've got access to financial advice, which is part of your membership.

Now, if we look at these two products, the Lifetime Pension was not designed to be used on its own. It was designed to help retirees be comfortable with spending their money in retirement, because, as I mentioned, more often than not, we'd actually spend a lot less than we may be able to. And I started in super in the Contact Centre 13 years ago, and I'd seen a few different accounts when they called if they passed away, where they had more money in the account than the date they passed away, so they may have been able to enjoy a little bit more of those funds. So, have a look. You know, as Kane mentioned, really important where you're invested. So, the Lifetime Pension, it does provide you that safety, that there will always be that payment for the rest of your life, and that could be above Age Pension as well money back protection. So, this is where I mentioned, in the lifetime option, what happens is, let's say you purchase the account with $100,000, you've only received your fortnightly payments of up to $50,000, that $50,000 we can pay out to your nomination, your binding death benefit nomination, or your estate the Retirement income account.

This is where you can have that reversionary beneficiary on there, where you can pay, or we can, you can allow that to be paid to, say, for example, your spouse, so they can still keep that money in super and generate that income that they were receiving whilst you're alive. So you can revert that to a spouse in the Income account. Also, the Lifetime Pension, you can cover a spouse protection. So, that means if I purchase the Lifetime Pension, and I also purchase spouse protection, if I pass away, my spouse is then going to take over that account, and he's going to receive those payments for the rest of his life. So, that's something you can do, is put on there that spouse protection.

Do you have access to withdrawals? You do in the flexible income account? However, you don't in the Lifetime Pension, which is why that Lifetime Pension wasn't designed to be used on its own. It was designed to be used with the Retirement income account. And I've actually answered one of our commonly asked questions, can I have both? Yes, you can have both of these styles of accounts. You can change your regular payments in that flexible income account you are with your just your fortnightly payments with the Lifetime Pension option. Together, we can tick all of those boxes in terms of changing your investment options. Remember the Lifetime Pension there is just invested in the Balanced-Risk Adjusted, however, the Retirement Income account, you do have the choice of those options that Kane mentioned earlier. So ticking all the boxes with having both of those accounts open. This is where you might want to chat with one of our financial advisers to go through those products.

But if we look at the two products that we do have, maybe how you could work it out is, what is my minimum, or what's the maximum Age Pension I can get? And then you work out what your budget is, or what your essential item is. What are your housing, your utilities, clothing, transport, food. You know, maybe you want to budget in every year a domestic trip down the coast. You put through what is my essential costs for the year? And what happens is, if that Age Pension isn't enough, maybe then you can consider, well, I want to make sure that always these costs are going to be covered. So, you might open up that Lifetime Pension to make sure that those costs are always covered, and that might be keeping the air conditioning on in the in the hot months, or even the heater on in the cooler months.

The Retirement Income account is really there for your play money. So, you know, having that little bit extra and you wanting to really spend that money for yourself in that earlier active phase in retirement, you know, to eat out, do those leisure activities. You might want to join a sport. I know Kane wants to join bowls when he retires. He's saving that up for retirement, but you might have other sources of income as well. So, one, we'll look at it as our essential items. Are they all covered? And the other one, where's our play money? And we want to have that above the essential costs.

So, Centrelink assessment. Now this is really important. How we assess these two types of accounts, because they are very different. So, the Age Pension for the income test in the accumulation and the Retirement Income account, it is deemed based on 100% of the current balance for the asset test. For the income test, it is deemed income based on the Balanced the Lifetime Pension option is 60% of the actual income and 60% of the purchase price for the asset test. And then it's 30% from 85 and over. So, if we have a look at it in figures there, and we say which one's going to be best for us, if we're asset sensitive or income test sensitive. If we are income test sensitive, and we have a look at the screen there, we are more favourable in either an accumulation account or a retired income account, because that figure there is lower however, if we're asset sensitive. So, maybe we have too many assets.
You can see there 100% of the income account, $100,000 is counted as an asset, whereas the Lifetime Pension, if we're, you know, age 84 and under, is only $60,000 and then when we get from 85 onwards, it's then going to be 30% so this might actually allow you to get a little bit more Age Pension, particularly if you are asset sensitive. To learn more about the retirement accounts, just head to the website and check out the different products and features on our guides. Next steps, I'll give it over to you Kane, do you want to go through next step or couple of questions?

KANE
Sure, thank you April. Alright, so just before we get into the Q and A and thank you to everyone who's been submitting your questions and a special thank you to our education colleagues who have been furiously answering questions in the background as we've gone through today. Hopefully you've had your questions answered, but we will go through a Q and A in a moment as well. We will address some questions that we've received. So really, off the back of today, what are some things you can do? So, you would have seen this icon in the in the top corner of the screen there that refers to your workbook, which hopefully you downloaded, that you've been following along.

A lot of the resources and a lot of things that we've mentioned in today's broadcast are in that workbook. So, it's a fantastic piece of, piece of collateral that you can use. The idea is it's to what can I go away and do something with? I've got that record for me. So, really want you to walk away from today. Definitely have a think about your investments. Okay, a lot of people do a set and forget, but it really pays to have a look at how your money's working, how it's invested, and what you're trying to achieve. How long do I need it to last me. Definitely check on your Age Pension entitlements. What we do find is some people hit 67 they apply for the Age Pension, get told no because they they've got too many, too much assessable income or assets, and then that's it. But once a no doesn't always mean a no. So, as we are retired, we're obviously spending down our assessable assets and income. So, there may be a case, a point in time where you will start to get some Age Pension. So, please, if you haven't checked for a while, it's worth asking the question. Okay, definitely review your plans for later life. So, certainly, what happens to my super? What do I want to happen with my estate? Have I got my affairs in order to make it easy for me and for my family, if something were to happen to me?

And certainly, have a think about that Lifetime Pension, because that has been one of the biggest issues that we're finding in Australia, and certainly the Government are encouraging these types of products to address their problem where a lot of Australians are actually passing away, and they've got so much of their superannuation left over. They could have actually enjoyed a much more enjoyable retirement, spent a lot more money. So, it could be something for you to have a look at. So, encourage you to read up on that Lifetime Pension. Don't forget that there's plenty of advice options available. If any of this has piqued your interest, if you've got your own financial adviser, make sure you reach out to them if there's something you want to discuss or alternatively, being an Australian Retirement Trust member, you do have included as part of your membership access to advice on your ART account so make sure you take advantage of that.

We've got lots of tools and calculators available on our website, and certainly lots of other educational resources. So, there's future plenty of webinars, like the one you you're watching right now. We've got that Super Insider podcast with episodes you heard April specifically talked about the scams and protecting your super so there's a lot of different topics on there. We've had a lot of different guests as well, so make sure you have a look at that. You can listen on your favourite podcast provider, or you can even watch them on YouTube, on the Australian Retirement Trust channel, if you prefer to do that. Now, before we go into questions, I will come back to that.

I just want to make sure that you're aware. Always like to say this, that no question is too silly. So, if you've walked away, hopefully we've answered some of the questions you had attending today's session, but hopefully we've caused some more questions to be thought up, and if you can't find the answers, give us a call. No question is too silly, even if it's like, how do I log into my account? How do I read my statement? What does this mean? That's what we're here for. We live, eat and breathe superannuation. So, we are here to help you. So, please give us a call, and no question is too silly. So, really want you to ask that. And you will also get an email from us shortly after this broadcast ceases, and we want to hear from you. We want to know your feedback. Hopefully you enjoyed today, and you got a lot out of it, but we really want to ask if you could just complete the short survey and just give us that feedback so we know for future. So, all right, April, I'm going to throw it to you now with some questions. We know we've had plenty. So, have you got anything that's really jumped out at you in particular?

APRIL
Yeah, so put us on the hot seat, which is nice. But also, again, I want to thank our education team behind the scenes answering these questions. Somebody said, after listening, I might be able to spend a little bit more, but I'm a little bit worried or what's my guidance to as to how to budget for that? We have spending calculators on our website, so we do have growing calculators, but there's also spending so maybe what you might want to do, and as Kane mentioned before, there's that life expectancy too. That's what we really covered in the previous session. So, you know, on average we're living till around mid-80s. And let's say, for example, we might be happy for our money to run out at say that life expectancy. If that's the case, you can go to the calculators. You can say, well, I want to have an income of X amount, and I want to receive that fortnightly. How long will that last for? And I also want to plug a website, it's the superguru.com.au website, and it has the ASFA Retirement Standard. And again, we did go through this in the pay yourself in retirement series, where it goes through what's considered comfortable lifestyle and a modest lifestyle, and then your maximum Age Pension. So, that might be something that you might want to have a look at those calculators, and also that superguru website.

KANE
All right, just going through some of the questions. A common one we get here too, and this is one of the keys where April talked about the different types of accounts, with the Retirement Income account and the Lifetime Pension. A common thing we get is, I've set up my Retirement Income account, I'm getting a set income. What if I need extra money? What can I do? Just be aware, you've always got that option to make lump sum withdraws from a Retirement Income account. So, it might be I want to go on a holiday, or I need to buy a new car or new fridge, or something like that, I can make lump sum withdrawals from my Retirement Income account, which does not impact the pension I'm drawing. So, I might have chosen to draw $30,000 a year out of my Retirement Income account and take that spread over fortnights. That's just going to continue, but then I might make a request to get $10,000 out and deposit it to my bank account. That is separate to that pension payment. It won't impact that, obviously, it would impact the overall balance of your income account, but you do have that flexibility. And keep in mind, with those income accounts, you can increase and decrease those payments as well, if that's what you need to do.

And often, when people first retire, they find they have to do that because they think they need X amount per fortnight or per month. But then they realise, hang on, I'm either drawing too much, it's just building back up in my bank account, or I'm not drawing enough, so I might need to dial that up. So, that's where, again, thinking about the type of account for me, that's something to take into consideration.

APRIL
One of the questions here is, can I have more than one income account? You can have more than one income account. If you do have more than one income account. There are fees for both accounts, but some people do have one to pay them an annual payment, the other one might pay them fortnightly. But just be mindful, there are fees per account. So, if you were looking at doing that, the other question here is, I've got some information about where to invest my money that some should go in riskier and some should go in more conservative.

So this is referring to what's called the bucket strategy, if you haven't heard of it, whereby you put some of your income stream in, say, a more aggressive option, or more riskier option, where it's got more exposure to a share portfolio, and then you've also got some in more of a conservative strategy, where it has those defensive assets there. And what happens is you can choose from your flexible income account to draw down your money from a particular option. So, what the bucket strategy is, is it's selecting to draw the money down from a conservative option so that we reduce that volatility in this balance. And we have some money up here playing with the market returns, so that will fluctuate there. But you need to be mindful, if you're looking at doing something like that, you need to be hands on and on the ball and make sure that you've got enough balance in that account, because if you leave it as is, and you're taking all your money out of this conservative option, gradually the risk does start increasing. So, give us a call. We can talk to you about the bucket strategy, and our financial advisers can see if that's right for you.

KANE
Beautiful. And so, in just finishing off on the bucket strategy too, probably if you speak to financial advisers, if you get 20 advisers in a room, half will advocate for it, half will argue against it. And it's because another consideration is, if I've got money in that conservative bucket to fund my pension inflows, well then it's not exposed to growth. So, it's pros and cons, and it really comes back to you the individual. So, as April said, really make sure you speak to your financial adviser, or speak to our financial advisers if that's something you want to know more about. Now I know that I did touch on this during the session, but there was a we get a lot of people ask around, you know, do I need to review my investment options, even though I'm retired? Like, why do I need to review them?

But it's really like, where I touched on the change in standard of living. It's really, it can be a bit of a set and forget, but it's really like if I'm finding that things are tight, or if I'm finding that my balance is actually going up, like you saw that example of the $300,000 and drawing the 5% and it's it could be a case of, well, hang on, if my balance is going up, does that mean I don't have to take as much risk with my money as I have been so there's different things to consider when you know at different stages, where, if you're just monitoring, and it might be you just check once a year when you get your annual statement, but certainly if you've got online access, which I encourage you to do, you can keep in touch with your super more now than ever before, but you could have a look at your balance and see how your options are performing. And remember that you can have multiple options. A lot of people do think I can only have one or two. You can have as many as you like, and you can change as often as you like, and there's no fee to do that. So just want to reiterate that point there.

APRIL
One of the questions is, if I put a binding death benefit nomination on my account, how long does it last for? So, binding death benefit nomination lasts on the account for three years. But if you wanted to put on a reversionary beneficiary now, this covers the income accounts, they will stay on there. There's no three-year period the reversionary beneficiary will stay on there. And it also, in fact, if we look at the Lifetime Pension option, the spouse protection will also always be on there. And actually speaking of a spouse protection, one question I did get was, what happens if me and my spouse separate? Well, they no longer become a spouse when, when you do pass away, so the account does not continue unless they are your spouse at that time. And then it comes back to the money back protection. So, I've purchased it with $100,000 I've used $50,000 the remaining $50,000 would be paid as per the nomination or go to the estate.

KANE
All right, I might touch on one, there's a few questions that are kind of around this topic, but often we get asked, particularly in couples, it's like, can I just, can we just combine our superannuation and just have one for ease? It's simple. We just generally, in couples, you'll have one person in that relationship who generally looks after the finances. So, can we just combine them and just have it in one superannuation? No, you can't have a combined superannuation account. The superannuation accounts are always individually owned.

Now, that's not to say early on, there might be some strategy you can do to try and boost put more super into one spouse's account rather than the other. But yeah, you always have to have a superannuation account separate. And there is so many considerations around if I wanted to move some of my super into my spouse's account, because effectively, at the end of the day, if I do that, it's now no longer my money. It's my spouse's money. Hopefully they still love me and they don't leave me with the money as well. So, it is just, it's a very common question we get asked, but no super accounts always have to be separately owned,

APRIL
Okay? And then we've also got that's just shut down on me. We do also have one here. I've got some money that I want to put into my account, but I have an income account can I add any money to this? This is one of our most common questions as well. So, if you have an income account open, you cannot add any money to that. If you're eligible to make those contributions, what would happen is the money will go in and we will open an accumulation account for you. So, then you do have two accounts, you've got your income account and your accumulation account. If you want to really put it all in just the one income account, what you can do is you can close and you can reopen that account. So, you can't do you can't transfer it in, but you can always close and reopen the account. Did you want to wrap things up?

KANE
Sure. So, look, thank you again for everyone for taking the time to join us. And as I said, hopefully we've answered a lot of those questions that you came along to get answered. But also, on the flip side of that, hopefully we've actually created some more questions that you now know, hang on, I've got to go and do some more homework. I've got to do some more digging, or I've got to attend some more educational sessions to find out the answers to those so again, thank you very much for your time, folks. Please don't forget fill out that survey when you get it, and take advantage of all the other education resources we've got available to you. So, thank you, and we'll see you in the future.