Shane: Hello. My name is Shane Hancock, and I am the Head of Member Products, Guidance and Advice at AustralianSuper. And welcome to our podcast, The moments that count. Before we start, it's important to note that the information discussed in this podcast is general only and doesn't take into account your needs or personal objectives.

You should assess your own financial situations and needs. Today, this podcast is being recorded at our head office on the land of the Wurundjeri people of the Kulin Nation. I and AustralianSuper acknowledges the traditional custodians of country throughout Australia.

We pay our respects to elders past and present, and extend that respect to all Aboriginal and Torres Strait Islander peoples.

AustralianSuper has the privilege of 3 million members trusting us with their retirement savings. Quite often, AustralianSuper members will ask questions that are found through various channels.

And mostly, those questions are relevant for many members. So we thought it would be great if we could share some of those questions and answers through this podcast.

To help with answering those questions, I'll invite a guest expert to join me on the podcast. And today, I'm very happy to have one of our financial advisors, Helen Harrison join me. Helen has been a financial advisor for 12 years.

Helen provides advice under the license of Industry Fund Services. Helen, thank you for joining us.

Helen: Thanks for having me, Shane.

Shane: Helen, a common question, but not an easy question we get asked is how much Super does someone need to retire?

Helen: That is a really good question, Shane. And often I'll try and reframe that by, "Well, how much money do I need to live on in retirement?" Superannuation does often form part of your retirement income, but there are other places that money comes from and statistically around 70% of retirees get some form of government assistance, by means of an age pension.

When we're looking at retirement income, we need to look at what do you have in personal savings, do you have shares, do you have an investment property? What's the balance of your super and are you eligible for government benefit? Because what we want to do is try and gain some income from all these different sources.

We also need to understand what it is that you're wanting to do in retirement. So, are you planning on taking up some new hobbies, traveling overseas or around Australia and are you looking to pay off a loan, do renovations? All of these things need to be taken into account.

But the other unknown is how long the money needs to last. Most people can now expect to live well into their 80s. So, if you're to retire at age 65, you will need to generate income for at least the next 20 years.

Shane: So, what I'm hearing, Helen, is there actually is no golden number, there are so many individual, personal circumstances and needs to be factored in.

Helen: Absolutely. So, as a starting point for people who really have no idea what sort of retirement income do they need, we'll refer you to the Association of Super Funds in Australia or ASFA, who conduct a survey every year to establish what retirees who own their own home will need to spend to enjoy either a comfortable or a moderate retirement.

So in September 2022, they estimated that for a couple to have a comfortable retirement lifestyle, they'd need around $68,000 a year compared to a moderate lifestyle income of around $44,000 a year.

And for a single person, a comfortable retirement is around $48,000 a year, compared to a modest retirement of $35,000 a year. ASFA described a comfortable retirement as being involved in a range of leisure activities, having a good standard of living, including private health insurance, a reasonable car, being able to eat out and take holidays.

Whereas the modest lifestyle really just covers the basics which is mostly covered by the full-age pension currently sitting at around $40,000 a year for a couple and $26,000 for a single.

The ASFA figures shown are always a good place to start if you are unsure, but the best thing to do is for people to track their own expenses, leading up to retirement, to work out the standard of living that you need or that they need to live the lifestyle that they want.

So I see members who tell me that they can comfortably live on the full-age pension of around $40,000 a year, and those that need over a $100,000 a year. But what I always say to people is what's important is that you're able to fund the lifestyle that's right for you.

Shane: Thanks, Helen, so those ASFA numbers give us a bit of a guide, but ultimately, the answer is it's different for every individual or every family and people should look to seek their own guidance and help whether from their superannuation fund or a financial advisor to work out how much is right for them.

Helen: Yeah, absolutely.

Shane: So, another question we get asked a lot is, "When should I start thinking about planning for retirement?"

Helen: Shane, I tell people that it's never too early or too late to start planning for retirement. The earlier you start, the more time you've got to build your savings, reduce your debt and make educated and informed decisions around your finances and your financial future.

Starting early allows you to take advantage of the power of compound interest and benefit from a longer investment time horizon. Most members that I see when they're mid 50s and upwards, who perhaps have paid off their debt, are empty-nesters and now have some surplus cash flow and are looking to see what strategies are available to them to help boost their super for retirement.

Shane: Thanks, Helen. So you talked about it's never too early to start thinking about retirement, but you also said that most people that are seeking advice from you are 50 plus, empty-nesters, and so on, if you're looking to start thinking about planning for retirement earlier than that, beyond financial advice, what are some other ways in which people can build their knowledge around what they could be doing and should be doing?

Helen: I guess it's really important to try and establish some kind of understanding of where you're spending your money, a budget tracker or establishing a budget is really important, even in the early years. It's always a good idea to live within your means and try to establish a savings plan to get you into the housing market.

I guess in terms of the superannuation, if you're wanting to engage more around your super, you would probably have a look on your superannuation fund's website. I know that AustralianSuper also do a lot of education seminars in workplaces, so if these things come up, it's always a good idea to go along and listen.

And if you don't have more money to put into super with a longer time horizon, it's also important to understand where your super is invested. So again having a chat with your super fund around the investment options available to you would be a good place to start.

Shane: Thanks, Helen. As mentioned at the beginning of this podcast, the information provided today is general advice only and doesn't take into consideration your needs and personal circumstances. If you would like guidance or advice, contact AustralianSuper or your financial advisor. Thanks for joining us again, today, Helen.

Helen: Thanks for having me, Shane.

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

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