Super Simple Chats

Alex

We acknowledge that we are recording this podcast from the lands of the Gadigal people of the Eora nation. We pay our respects to Elders past, present and emerging and celebrate the diversity of Aboriginal and Torres Strait Islander peoples and their ongoing connection to land and waters throughout Australia

Ange

Welcome to super simple chats, Rest’s very first podcast. I’m Ange..

Alex

And I’m Alex

Ange

And we will be speaking to industry experts about all things super.

Matt

Wait, what the hell is contributions as well?

Ange

I didn’t realise until recently, that super is invested, I thought it was like a savings account

Sarah

I’m not sure it’s helpful to talk about specific numbers, but it’s a lot less than a million dollars.

Person

This is actually really important to talk about, because I don’t want to miss out on those things

Ange

Trying to make it understandable and relatable for every day Aussies.

Alex

After all, it’s one of the biggest assets you’ll ever have.

Ange

Now this wouldn’t be a financial podcast, if we didn’t start by mentioning that the information discussed is general only and doesn't take into account your own financial situation, needs or objectives. This information and the relevant products are issued by Retail Employees Superannuation Pty Ltd. Before deciding to join or stay, consider the relevant Product Disclosure Statement and Target Market Determination at rest.com.au/pds and whether it is appropriate for you. While we have endeavoured to ensure the accuracy and reliability of the information provided, there may be inadvertent errors or omissions. Before acting on any advice, we recommend you speak with a financial adviser.

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Alex

So for me personally as a finance writer, this was not something that I grew up knowing a lot about: superannuation or personal finance, and I took it upon myself to learn as much as I could. And with that, I realised how little people know, just like me, and how important it is for everyone to know this very simple information.

Ange

You know, I agree with you 100%, Alex. I mean, I've been working in super for about, I'd say close to four years now. And truthfully, I had I had pretty much zero to no knowledge about super other than the fact that I had it until I started working at Rest.

And then I realised just how important it actually is.

Alex

Oh yeah.

Ange

So for me doing this podcast, I'm just hoping that everyday Aussies like us can really get into the nitty gritty of super and understand just how important it actually is for them in their future.

So on that note, we're excited to kick off our very first episode, which, surprise, surprise is super 101. And joining us today is Matt from Rest.

Matt

G’day, thanks for having me.

Ange

Yeh we’re stoked to have you hear, Matt. And Matt is going to be demystifying just what's super is and why it actually matters.

First question, as we were just saying, super feels like a really foreign concept for most people. In fact, most people just assume it is glorified savings account for later.

But we know it's actually a lot more than that. So my first question is, if you were to explain superannuation to someone who is completely new to the idea, how would you explain it?

Matt

Yeah, it's a good question. I think most people it's it is a foreign concept as well. You guys are not alone in not knowing too much. It's not generally a topic taught at school or university TAFE things like that. So I think the message for me to every Australian is you're not alone in not knowing much about super, because it's pretty, it's pretty common. So what is super? I think he sort of did touch on it.

In short, it is savings for retirement. Saying that it's not like a savings account where you can just dip into and sort of, you know, if you're going on a weekend away and sort of take some money out here and there. In a way it is that those for savings for your retirement, and it is important because it's going to be a nest egg come retirement. Right? You know, you've worked hard for 20, 30, 40, 50 years. You want to have that little nest egg tucked away for, for when you do retire.

I think for me as well, a lot of people sort of in a way assume it's not real, it's not their money, which, you know, is, is interesting because, you know, you've been working so hard for this. It is your money. You know, I think people think it's not real is because you can't, you can't touch it. You can't smell it, you can't feel it.

And that probably just comes down to the lack of engagement with super. And it's pretty common across most Australians that they're pretty disengaged with their super, which is a shame, but pretty consistent with most Australians.

So in short, that's a really long winded answer. Sorry you've got me on today. I do talk a lot. A lot. Some of it's nonsense.

Ange

That's actually why we have you here.

Matt

But look, yet at savings for retirement. That's it, in short, the way you're going to achieve this, this retirement balance is through employer contributions. Your employer will make contributions throughout the lifetime of your career. Obviously, there's some certain criteria you need to meet as well. But, I'm sure we'll talk a little bit more about that today in terms of employer contributions and the power of those too.

Ange

Yeah, awesome.

Alex

I think disengagement is a really like the perfect word to describe how a lot of people feel about super, especially young people. Like it's very much seen as a set. And forget one day in the future, I'll think about this concept. So with that in mind, why should young people actually even care about their super?

Matt

Yeah, I look it's I mean, the amount of times I've gone into a workplace, I do a lot of, sort of super education in the workplace. The amount of times I sort of go in there and talk about exactly what we're talking about today. So super 101. Whenever I have these conversations with people, you sort of have those light bulb moments ago. Oh, okay. That's why I should do it. And I think, in short, the earlier you can look at it, there's this thing called compound interest.

And what compound interest is, is basically interest upon interest. So, you know, as contributions go in there earning interest. And over the lifetime of your, you know, your work life, that's just going to compound to hopefully a nice juicier balance. So there's some small things you can do earlier, which we'll touch on at a bit more detail like, you know, potentially adding additional contributions to your super, watching that compound over the lifetime of your work career, looking at different investment options, having a look at your insurances and whether you need them, whether you want to dial them up or increase them, or what have you.

There's this there's plenty of things you can do at an earlier stage in your career, which will be so much more beneficial, you know, by the time you retire, the amount of times is, well, we've I've been into a workplace and I'll be chatting to somebody in their 40s, 50s or 60s and they often say, oh, I wish I'd done this earlier. And you know, you know, ideally you've got somebody a little bit younger.

Ange

It's like super FOMO, right? It's realising it too late.

Matt

Totally. What I will say, if you are in your 40s and 50s is never too late. It's, you know, it's never too late. You know, there's always something you can do there to help you balance. But obviously, you know, I work at Rest and a lot of our members are actually sort of 18, 19, 20.

So I got that really fantastic opportunity to sort of chat with them and help them out, some really, really basic things. That you can do, you know, just to sort of help yourself out that, you know, you know, to get engaged with you, with you super. Which I can't stress enough is really important.

Ange

So what I'm hearing from that is it's never too late. But the earlier you start, the better it could be for your outcome.

Alex

I like the way that you described it as a light bulb moment. So this idea that something like compound interest, someone had that. Oh yes. Now I should..

Ange

Cha-ching!

Alex

Are there any other light bulb moments that you've seen register with people?

Matt

The there's plenty. I mean, I think for me, one of the biggest things is how do people, you know, engage with their super and, you know, most funds I will say have an app.

Ange

Is that a shameless plug there Matt? I think it is.

Matt

A little bit. Look, I'm obviously slightly biased working at Rest. But you know we have an app and I've worked with other funds in the past and now you'll have apps as well. But, I didn't know there was an app. I didn't know I could see my balance. I didn't know I can see my contributions. There's so many things. It's like one thing will lead to another because, you know, once you get on a bit of a roll and these words start making sense, things you might have heard on TV or, you know, your parents or a mate at a barbecue that knows everything, you know, it starts to resonate a bit more and then naturally, you're more engaged. So I think for me, those light bulb moments are very rewarding for me. And I know most, you know, my team that that works in the same space as well. So

Ange

That was really great to know. So we've actually gone and spoken to everyday Aussies about this topic.

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Sinem

What do you know about super?

Person 1

I don't know anything at all.

Person 2

A 401K for Australians.

Person 3

It's for the retirement

Person 4

They told me that I will get super

Person 5

Something that you contribute to so that you have something to retire on

Person 6

It's mandatory in Australia.

Person 7

I believe it is a very good thing for everybody in Australia,

Person 8

Investments are made on my behalf

Person 9

And it's for later. You can't have it now.

Sinem

Do you check it often?

Person 2

I tried looking at it once,

Person 5

Yeah, I do, I do.

Person 4

Yeah. Every now and then

Person 7

Not often, as I should.

Person 6

I do keep a tab on the how much I've got.

Person 8

Probably not as often as I should,

Person 9

Sometimes I do, and I get really excited because I'm like, I can't wait to grow old

Sinem

Back to you Ange

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Ange

So you did mention employer contribution. Now I've heard this used interchangeably with the term super guarantee. For those of us at home who are listening and have no idea what super guarantee is they might have seen on a pay slip or something, and gone, what is this 11.5% thing that they're taking out every week? Can you explain to us what super guarantees?

Matt

Yeah, it's basically just the contributions that your employer has to make on your behalf. So this is the money you've earned, and it goes into your, you know, designated super fund. Now at the moment, you're right. It's 11.5%. When I first started working in super, it was around about 9%.

Ange

Is that telling us about how long you've been working in super?

Matt

It’s been a little while now, it was even less a lot, you know, before I started working in super. But, yeah, at the moment, 24/25 financial year, it's 11.5% is actually increasing the 12%, next financial year. Which is great. Obviously that's more money going into your little nest egg. That savings for retirement.

Ange

So I'm going to take us back a little bit, back to when I was 16 years old.

So a bit of a reminiscence, thinking about my very first job was actually younger. I was like almost 15, I think I was 14 to 9 months, like, my parents just straight. Didn't love that. So I worked in retail. That was my first job. And when I first started, they hand me a bunch of paperwork, filled it out, handed it back a few weeks later, got a letter in the mail, and it was from a company called Rest. Never heard of them. No one told me what it was going to be.

Matt

Great fund.

Ange

There was a number on it, and they said I was a member. So I was like, oh, well, this is probably important. And I was one of those teenagers that was really organised. So I had a life admin folder.  

Alex

Can’t relate

Matt

That’s so weird. That was not me.

Ange

I don't know how many 15 year olds have a life admin folder. I mean, I put it in there and then just by some magic, okay, it was huge fluke, but I just somehow knew that I had to take it with me every time I start a new job and just fill it in.

Matt

You, you are a miracle.

Ange

Yeah. Miracle, right? And it's really lucky because to this day, I'm still with Rest for that exact reason. But my understanding is most people don't do this yet. So yeah. Which I will probably touch on, but we'll touch on that next. Alex. But can you tell listeners what is it that they need to know about super when they do start their first job and then when they start moving from job to job?

Matt

So you're definitely a freak of nature, keeping that admin in file.  That's unbelievable. Yeah, for me, I think back to my first job was working at Hungry Jacks, and I would have been probably around sort of 16, maybe a bit older, I think, as well. And yes, same thing I  on-boarded with them and got a piece of paper that said super. And, you know, I had no idea what that meant, and I certainly didn't keep that in my admin folder. That's, that's for sure. But what that bit of paper was, was something that's referred to the Standard Choice Form. So when you start with, with any workplace, you have the option of say it is your first job, you have the option of, of either joining the employer's default fund to default funds is the fund that they've selected to give to new employees.

Ange

So that's how I ended up in Rest.

Matt

Totally. So that's how you would have come to Rest initially. But, you know, in this day and age, employees have choice. So if you, you know, if you're somebody that you know, has done your research and you wanted to come to this workplace, with your own super fund, you know, there's a lot of comparison tools out there available these  days.

Some via the ATO. In fact, you can actually bring your own fund to, to that workplace and say, hey, I want you to pay contributions to this. But if you don't, a lot of people don't. A lot of people would just go, yep I'm just going to tick this box because it's easy. I don't want to, upset my employer, which is weird.  You know, you won't be upsetting your employer by, you know, selecting your own super fund. You know, you can. It's your choice.

Ange

Do you reckon it’s because they think that they're going to be like the odd one out, like everyone's default fund, and so I'm going to be the weird one out.

Matt

100% Think about any job that you've ever started your first day. You know, it's chaotic. It's mayhem in terms of your mind just rattling around and all these, you know, forms. You got to fill out a thousand OH&S forms that you've got to fill out in this day and age as well, I think you got some of this is super as well. So yeah, I think mostly people would probably just tick that, that default box, which is fine.

So yeah, they, you sort of you sort of options in terms of when you, when you start and the form.

But I think it is really, really important when you do move, from job to job to, to keep track of all of your super details. Technology is our best friend now, you know, it's so much easier now to keep track of your super funds. I mentioned before about apps probably the easiest way.

Ange

So you don't need a life admin folder, where you carry a piece of paper for 20 years because I only threw it out like a few weeks ago.

Matt

Yes, I know we've printed off a few bits and pieces here today, but realistically, I can't remember the last time I've used a printer myself, you know, so everything's online these days. If your fund doesn't have an app, I'm sure that will have an online portal. You know, like your online banking type thing so you can keep track of it. There. And it's just a matter of when you move from one employer to another. Keep a lot of those details and certain details you'll need to share with them and including the form. In saying that if you don't actually know what super fund you were with before by some chance, maybe you, when you're onboarded with them, you use an email address, you don't have access to. And if also any statements or any, you know, information that's, that's gone to an inbox you have no access to.

In this day and age, employers actually have to do what's called a stapled search. They actually have to go out and try and find any existing super funds that you already have out in the super multiverse. I mean, using the multiverse language at the moment, because I'm a bit of a Marvel nerd. But, you know, there's tools that the employer can use to locate any existing super funds that you have out there as well.

Ange

I just have this image of like someone stapling your super fund to your shirt. You're just like taking it around with you.

Matt

Yeah, well that’s it. These were, these were only introduced these laws in in 2020.

So I think 2020.. I'm pretty sure it is.

Ange

Someone fact check the man.

Alex

Like put the right stat here (motions to a space beside her).

Alex

It was actually 2021.

Matt

It was a good change because you know working in super for yeah I think 12 or 13 years now I have seen so many people accumulate so many different super funds because of that. I think just that mindset of you join an employer, you just sign up to their default fund and then before you know it, you got 4 or 5 …

Alex

Guilty.

Matt

Is that you? But you know, look, and we can talk about this in a bit more detail later, but so easy to consolidate them these days. There's so many digital tools available to you as well to be able to sort of help you through that process. Yeah.

Ange

I want to know why Alex is guilty.

Alex

Just for this or for all the crimes? Just for super today? It's just so, like, my first job was a waitress. I was maybe about 16 or 17. I wasn't very good, but I gave it a crack. And one of the first things they did was that same process of nominating a super fund and being 16 and not really caring. I just went with the default fund and then completely forgot about it. Few years pass, I eventually get, you know, a big girl job and then I go, okay, super that thing, default fund. And then carried on and it wasn't until, yeah, I was a lot older that I realised that I had multiple funds open. So Matt, if you are like me and you find out that you have multiple super funds, how can you find your lost super?

Matt

Yeah. This day and age it's, it's easier than ever in a sense that you can actually just do this via your MyGov. So where you log in and do your tax every year or if you've got, you know, somebody that helps you do that every year. There's actually a little superannuation portal in there which you can actually locate any lost or other super funds out in that, that super multiverse that we're talking about. So, yeah, really easy to locate them. And you can consolidate them within there if you want to.

The other way you can do it as well is actually just engaging with your, your own super fund. So most super funds will have some sort of online portal or even via an app you might be able to consolidate via there as well. So it's yeah, it's technology's your best friend when it comes to consolidation. You know, all the tools are available at your disposal and yeah, no paper based stuff is required these days, which is even better.

Alex

If it was your own fund and you like, fund A and you want to stay with fund A and you have B and C over, you would go to fund A's website and have them do the hard work of consolidating for you.

Matt

So you if you've got your sort of I suppose your core fund, you'd probably go with that fund and then get them to bring over the other to type thing. So

Alex

Easy peasy.

Matt

It's super, super easy, right.

Ange

But consolidating isn’t right for everyone, so it’s best to seek financial advice, right?

Matt

Yes that's right

Ange

Oh, this is really great to know. Honestly, I wish younger Ange knew a whole lot more about this. So thank you so much for joining us today, Matt. It was really great to have you on our first episode.

Matt

Oh, you're very welcome.

Alex

Yes. Thanks for being our very first guest.

Ange

And I'm sure we'll bring you back in for a few more episodes if you're open to it.

Matt

Sounds good. Any time.

Ange

Fantastic.

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Ange

So please make sure to like, follow and subscribe

Alex

For any more information on the things we spoke about today there’ll be some links in the description below.

Ange

And that is..

Ange&Alex

Super Simple!

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Ange (VO)

Before combining your super, consider which fund is right for you. Check out the fees and costs of your funds plus any benefits that would be lost, such as insurance cover. Make sure your other fund(s) knows about any contributions you intend to claim a tax deduction for, before combining your super. If you have any questions, speak to a licensed financial adviser or visit the ASIC MoneySmart website for more information.

Alex

We acknowledge that we are recording this podcast from the lands of the Gadigal people of the Eora nation. We pay our respects to Elders past, present and emerging and celebrate the diversity of Aboriginal and Torres Strait Islander peoples and their ongoing connection to land and waters throughout Australia

Ange

Welcome to super simple chats, Rest’s very first podcast. I’m Ange..

Alex

And I’m Alex

Ange

And we will be speaking to industry experts about all things super.

Matt

Wait, what the hell is contributions as well?

Ange

I didn’t realise until recently, that super is invested, I thought it was like a savings account

Sarah

I’m not sure it’s helpful to talk about specific numbers, but it’s a lot less than a million dollars.

Person

This is actually really important to talk about, because I don’t want to miss out on those things

Ange

Trying to make it understandable and relatable for every day Aussies.

Alex

After all, it’s one of the biggest assets you’ll ever have.

Ange

Now this wouldn’t be a financial podcast, if we didn’t start by mentioning that the information discussed is general only and doesn't take into account your own financial situation, needs or objectives. This information and the relevant products are issued by Retail Employees Superannuation Pty Ltd. Before deciding to join or stay, consider the relevant Product Disclosure Statement and Target Market Determination at rest.com.au/pds and whether it is appropriate for you. While we have endeavoured to ensure the accuracy and reliability of the information provided, there may be inadvertent errors or omissions. Before acting on any advice, we recommend you speak with a financial adviser.

Ange

It can be really challenging to know just how much super you need to retire. So joining us today are Matt and Sarah from Rest who are going to be talking to us about planning for retirement and whether it really is true that you need $1 million to retire. So, Matt, Sarah, thank you for joining us.

Matt+Sarah

Thanks for having us

Ange

We're really excited to get knee deep in that figure and whether it actually is $1 million.

Alex

Yeah. So $1 million. That is quite an intimidating figure if we're, you know, living a bit more in reality maybe. What is an actual number that people should think about saving?

Matt

Yeah, I think yeah, I think that million dollars is, is something people like to talk about because it's a nice sort of claim number, a big number. But, realistically, it, it probably won't be that amount. It probably won't be $1 million. So, for me, when I was, you know, had this conversation with people, it, it really comes down to I suppose individual needs and wants in retirement. So, I think for me is sort of have a think about what you would like to do in retirement and how you're going to help yourself achieve this.

So, there's some, some friendly calculators available online that you know, with, with most super funds that you can access, and they'll probably give you a good guidance. And, look, if you're if you're not getting the answer out of those retirement calculators that you want, and it's not going to get you to Greece on that holiday that you want to do every year, then maybe have a chat with a financial adviser there to say it's, you know, to help you get along to that, to that retirement balance.

Ange

And I guess to Alex's point, if it's not $1 million, then is there something is there a ballpark figure that we should sort of be aiming for or recommended number.

Sarah

Yeah. So there's a, there's an association ASFA is the Association of Superannuation Funds of Australia. And every year since 2004, they've actually put together an estimate of what they call a retirement standard. And the way that they do that is they look at what's your expected spending or what's your anticipated spending work out therefore what your annual income is kind of likely to need to be.

Ange

So is that like considering cost of living in that period of time.

Sarah

So it looks at increase costs over time. It looks at what's the what's the most common expenses of people in in retirement because there are some that go away when you stop working. And so it looks at that and it sort of then extrapolates out to, well, about what's the income you need and therefore about how much super do you need to cover that.

And I'm not sure it's helpful to talk about specific numbers, but it's a lot less than $1 million. It does make some assumptions around that. You'll also probably get at least a part pension, in retirement as well, depending on your circumstances. And it does make an assumption about house ownership, but I think we might chat about that a bit later.

Ange

And I mean, look, I would love to retire with $1 million so that I can go and retire on the Greek islands. I just stole your retirement plan Matt, I know you want to retire in the Greek islands too. But how realistic is it that Aussies do retire with $1 million? And where does that number come from?

Matt

Yeah, this is a funny one. And I've had this conversation with so many people, out in the workplace. And I think the million dollar myth probably just comes around because it's a nice round, juicy number. I think $1 million is something that, for a number of years, financial advisers have suggested is that that goal, it's a nice goal to work towards.

But as Sarah just mentioned. Realistically, it's actually not that big of a number that you would need to retire with. But at the same time, there are other assumptions around, you know, you know, owning a house outright and not having mortgage repayments. And, you know, if you are a renter as well, obviously it makes it difficult as well.

So I think for, for me, I can't reiterate enough. It really will come down to your individual circumstances. And you know, what you want to do is if you want to go overseas a lot, you know, make those, those international trips, you probably need a little bit more money. You know, the conversion rate for, for most Aussies is not great right now.

Ange

It’s not great right now is it

Matt

Going to Europe or America or any place like that. Right. So yeah probably have a have a bit of a think earlier is probably best. I mean look if you, if you're looking at it closer to retirement that that's fine as well. But with anything to do with super, the earlier you can look at you know, your balance, some things that may, you know, incline that to a nice juicy balance come retirement, you know, it's going to be beneficial for you.

Sarah

And I think it's important to remember that… the value of superannuation is actually really high, even at those lower amounts, you know, the ability to hit retirement and actually do things like potentially pay off all you debt is, is a real win, even if it doesn't set you up to be able to go to Greece every year.

Alex

Sarah, you touched on this briefly before, and I'd love to deep dive a little more into this idea that a lot of superannuation models are based on owning property, but if we're being realistic, the dream of owning property does feel more and more out of reach for a lot of young Aussies like myself. And personally, my parents didn't actually buy their first properties until they were, my dad was retired for the first part and my mum was 60 something (age redacted, Sorry mum), but of older than that median age and not the typical situation. So I guess my question would be what does this mean for people who don't own property? Do they need a bigger balance to compensate for not paying a mortgage in that, you know, retirement income?

Matt

Yeah, I think it's it is really it's a really tricky, subject to tackle. To be honest, I don't think there's, a silver bullet answer to this either, if I've got to be honest. You know, I reflect on my own personal circumstances. I only bought my first ever property, a couple of years ago, and I've been working full time for a long time. Same with my wife. So, and, you know, living in Sydney, it's pretty tricky as well. So we were able to get an entry level property, but even still, then I've, you know, I've got another 30 odd years of potentially paying down that mortgage and all the rest of it. So I consider myself fortunate to be even getting into the market.

So for people that that are renting, you know, when it gets to retirement age, you may have to be, to be honest, more reliant on the government age pension along with your super balance as well. So there's a combination there… more super in there obviously, it's going to be beneficial for you to be able to do the fun things that you'd like to, but there is a bit of a fall back in the government age pension as well.

So, I don't think it is all doom and gloom, you know, type of thing. If you are, you know, retiring without, you know, a paid off house and you know, a small mortgage and things like that. There are other options. But, at the same time, as I said, if you are concerned about that, that you will be renting come retirement time, as I said, have a look at your super as early as possible. Seek financial advice… having a chat with them would probably one of the best things you can do to give you a little bit more peace of mind, sort of, as you get a bit older.

Ange

I just want to take us one step back. So, Sarah, you did mention that the ASFA models do have some considerations built into them. And that to Alex's point, one of them is property. Can you build on that a little bit.

Sarah

Yeah. So the retirement standard that ASFA put together do does assume that you own your own house and if and outright so you don't have mortgage payments.

Ange

Do you think that's going to change given the current climate that we're in with housing.

Sarah

Yes and no. It's definitely the case that fewer people hitting retirement own their home outright. It's that it's that's the trend. But it's off a pretty high level, over time, you know, even if people don't feel that they can access the property market as early as we used to be able to. There are still people buying their first homes over the course of their life.

Ange

Alex’s parents

Sarah

Yeah. That's right. So, so it's not it's not like homeownership has fallen off a cliff. But the demographics are changing around with, when people reach retirement, some don't own their own home, some still have a mortgage. And, and I think that actually talks to the value of superannuation to be able to actually contribute to that period of your life as well.

Ange

I might get cancelled for saying this, but at least millennials can breathe easy at night now, knowing that they don't have to own their home. They can have all the avocado.

Matt

It's always so much pressure. Millennials.

Ange

Yeah, just okay. So I'm going to speak to a similar point. And Sarah, this is more for you I guess. And this is probably going to get covered in another episode as well around women and super. But we're talking about people owning their own homes. And typically we're finding that, you know, older women are the ones that are either more homeless or they don't have their own homes. How is this impacting that particular cohort of individuals?

Sarah

Yeah, yeah. I mean, you’re right about those statistics in terms of, single women over 55 of the largest, are the fastest growing number of homeless people in Australia, which is devastating. But, I think there are there are ways in which to sort of produces manage, you know, this over time. So that risk is lower. And that's not to say that, you know, it's anybody's fault that they end up in those, those circumstances… and so consideration of a woman's superannuation balance is just as important as her spouse's, and, and so, there are options around to actually look at what you can do to, to even up the superannuation balance over your working life as well.

Ange

Personal anecdote is I was looking at my parents situation and mum took out quite a bit of time to look after us kids, when we were growing up. And now I look at the balance between mum and dad, and it's like the disparity is huge. And their wages weren't that different, both working class. But you kind of do the comparison of, what, 6 or 7 years out of the workforce can do to that final amount… And I guess lucky for mum, they did sell the house so they were able like, you know, a mum put herself in a good financial situation, but that's not the case I don't think, for every Australian.

So if you don't own your own home and you are in this situation, what are some of the things that you might be able to do?

Sarah

Yeah, look, leaning on your super to actually do some of this does actually help, because if you haven't got access to that, at least superannuation gives you an asset. So the, you know, you've got circumstances around things like co contributions or splitting contributions where you can build up that, that balance.

And also looking at, you know, where you've got broken work patterns during your working life. What can you be looking at to top up your super during those times as well?

Alex

Yeah, I mean, on the flip side of that, my mum was very much a corporate power woman of the 90s and took the least amount of time off, which I love and respect her for.

It was a great model for me, but her super balance, she will say, is a lot higher than those of like any friend that she has. And it just goes to show, like the situation's out of your control, that you can't really help you take time off before supers even compulsory, maybe two. Yeah, it can be a bit challenging for every different Australian. Everyone has a different story,

Ange

We actually took it out and spoke to everyday Aussies about this topic to see what they thought about it.

Sinem

Have you thought about your retirement and what that might look like?

Person 4

No.

Person 5

Think I'm just not worried about it yet.

Person 3

Not too young for that.

Person 4

No. Not really.

Person 5

Yes

Person 6

If I'm working in a job that I really love, then I wouldn't want to retire.

Sinem

How much do you think you need to retire?

Person 4

I have no idea.

Person 6

I do have a number that I'd be comfortable with.

Person 2

I never plan, like, you know how much I need by the time I retire.

Person 1

Probably like a $1 million.

Person 9

Realistically, I don't think that it will be millions. I think it will probably be a lot less,

Sinem

Are you at all worried about what your retirement might look like and whether you might run out?

Person 6

I'm not really worried about that now.

Person 7

Yes. This is exactly what I'm worried about.

Person 8

At this point, I try not to think about it.

Person 9

I am worried. So yeah a plan would be good.

Sinem

Back to you Ange.

Ange

So Sarah, this next one's for you. I want to ask what is driving the disparity between men and women in retirement at the moment?

Sarah

Yeah. It's an interesting problem, isn't it? And there's a whole range of causes around, you know, what we call the gender super gap and the causes that lead to that. Definitely. Career gaps is a big one where you've got rights to, to work. And, and the higher part time and casual work usually following, having a baby.

You also got women take on a higher proportion of generally unpaid work and caring responsibilities. And you've got on top of all of that, you've got a generalised pay gap across, the whole economy. And all of that leads to what's currently about a 28% difference in men's retirement balances compared to women's. So there are changes that are happening around this.

We've seen recently the removal of the threshold at which you get paid super by an employer. So it used to be that you didn't have to get super on your, on your salary until you hit a $450 threshold a month. That's gone. Awesome news

Ange

Is that $450 combined or from one employer?

Sarah

That was from one employer. So if you were earning a lot more across a number of employers, you weren't getting super.

Ange

Okay. So if you had like 3 or 4 casual jobs and you were working them all and none of them were quite hitting that threshold, then you might not be getting super on any of those.

Sarah

Absolutely. So that that's being fixed, which is fabulous… So, I think we'll start seeing some real differences to women's super balances as a result of that.

Ange

What else could women do?

Sarah

Well, the other thing is, from a government perspective is would we've also in Parliament now, is superannuation going to be paid on the Commonwealth scheme paid Parental Leave Which is awesome as well. But there are other options that you can do yourself in terms of just thinking about your super before you have those breaks and what you know, what can you do to top it up.

There are also options around, contribution splitting where you can actually as a couple, you can divide your superannuation contributions between both of you, and, and possibly get access to the government co-contribution scheme where you actually get government contributions for, the go on top of, of your, your personal ones. So that sort of range of things and I think a lot of it is actually just keeping it in mind.

Ange

Yeah. Great.

Alex

So we've established that that $1 million figure is a bit of a myth, and it's probably more about what you want your retirement to look like with a little a sprinkle of a caveat of it could be, you know, you might have a lower balance if you are a woman on average. So that being said, what are some practical steps you could actually take today? So you're in your 20s to potentially boost your balance if it's not where you think it could be?

Matt

Yeah, I mean, there's quite a few things, but I think what I would suggest to anybody when I, you know, speak to them about super for the first time is, engage with your super fund. And what do I mean by that? It's super easy in this day and age to engage with the super, in a sense that most… funds will have an app. So that is the first thing I've always said. Everybody download the app of your respective super fund. I know most people have a smartphone. So, you know, most people are familiar with apps as well.

So if you download the app of your respective super fund, you know, you can see your balance, you can see your contributions from your employer. Make sure that they're paying the super, which is obviously important to, and then you can see your balance grow as well. So I think when you do that, it makes it a little bit more real, a little bit more tangible.

When I first started working in super, I used to work in a call center, and people used to have to call through to the call center to say, hey, Matt, can you give me my balance as of today? And I would write out a script, and I would read out their balance, and I would write it down, and then they'd read it back to me and I said, no, no, no, that's wrong.

And then we read it out again. And then they would go off on, on, on their day and I would have probably five, six, seven, eight, nine, ten of those calls a day. So, you know, engaging with these super is probably the best thing you can do. And as I said, downloading the app of a respected fund is the probably the first point of call.

The other thing to consider, and I think for me, it's certainly it's a, it's a tricky topic in the current climate because cost of living, is not going anywhere in Australia. It's a global issue at the moment. But one thing we generally like to say from, from people, if they can afford it, is contributing extra to their super, and you can do that through various means, one called salary sacrifice. Where you can sort of, you can sit down with your employer and ask them to forgo some of your salary and put it into your super, either a percentage of your salary, or a figure amount. But once again, you know, this is only one thing to consider, if you can afford.

I'm very mindful of, how much two bags and shopping still costs. I think for me, I went to (won’t name the grocery store), but I went to one just last night and got two bags in shopping and it was $90.

Ange

We’re all feeling that pain Matt, don’t worry.

Matt

That that that pain is real at the moment. So very conscious of that. But, you know, figures will show and the calculators will show that such a small difference now will make such a big difference over time. And you'll have this friend of ours called Compound interest working away in the background.

Ange

That sounds like a friend, I'd like to have.

Matt

Oh, yeah. It's a great friend. And, you know, five, $10 a week, over 30, 40 years. You know, can make such a big difference in your retirement. And, you know, if you, if you're going to start to look to contribute more, you super once again, take advantage of the advice that's available to you via your super fund advisers are more than happy to run through what an extra 5 or $10 a week will make in retirement. Because I know at the end, based off their calculations, it'll be a lot more than if you didn't. So I think for me, they're probably the two key things. You know, really basic fundamental things engage with the super via ideally their app. If they don't have an app, have a look online. Most super funds have an online portal where you can check it just like your bank account. And then the second thing would be, if you can afford it, additional contributions and then the benefits of that too.

Ange

One thing I'd like to speak to, I guess ask the question around, is, I guess, the differences in what retirement looks like for everybody. So my understanding is that there is an age at which you can retire, but there are different ways with how you can retire. Can you explain this to me a little bit more detail?

Sarah

Yeah. So the official what we call the preservation age for super… that’s a government mandated age looking at, when you can access your superannuation… but what we're seeing now is that people's retirement all looks incredibly different. So the old, the old idea of retiring at 60 or 65 and working full time until you stop is actually really going out the window, is a is a general trend. So you people drop down to part time. They look at, they look at different jobs. One of the biggest, employers of old people in Australia is Bunnings. And these are frequently professionals who retire from their corporate life and go and work at Bunning two days, Bunnings two days a week. It's an incredible trend.

Alex

I love it. I think my Dad would like to do that as well.

Sarah

So yeah. So it all looks different

Matt

I think as well. It's a good point as well. You know come retirement you know often unfortunately you don't retire with the amount that you, that you'd like to and you do have to work. But I think, in retirement I've got some ex-colleagues that have now retired. And I think for me, they've always said to me, they've got to find that sense of community in retirement, which is, which is really important as well, because I think if you're just doing, what's referred to as a three G’s, which is gardening, grandkids and golf, which sounds amazing.

Ange

I mean, that sounds amazing, right? Where do I sign up?

Matt

That sounds amazing, but I think for me, you know, it's often finding, you know, what else? What else can I do? So if you do have to go back into the workforce and get a two day job, you know, a week at Bunnings, I think a lot of people enjoy it. You know, it's not like, you know that you have to be in the office five days a week or, you know, digging holes five days a week type thing. You're able to work in a workplace which is fun, vibrant. You've got, you know, some new colleagues and, you know, with that becomes more of a social network too.

So there are obviously some, some, some upsides to, you know, going back, it's I wouldn't say it's the worst thing having to go back and work a couple of days a week.

Ange

So actually just before this episode, Sarah, we were talking about your mum and how retirement looks a little bit different for her as well. Can you tell us a bit more about mum's story?

Sarah

Yeah, absolutely. My mum was an academic, and a nurse before that and then an academic in, in nursing. And, and she continued working well after 70, but it, it staged down. So she went from teaching a lot of a lot of classes, to, you know, working with the university on research to and then dropping, down again to just supervising a couple of students. And really, she only fully retired, I think, when she was 72.

So it's, it's absolutely, available in lots of different workplaces that there is this pattern of not fully letting go over the course of, of the end of your career.

Alex

I feel like we've established then not only have we busted the myth of a perfect round figure, but the idea of a perfect retirement plan that everyone's looks different.

Matt

Yeah, everyone certainly is different. So I think, hopefully that gives people listening to this some somewhat peace of mind in terms of, you know, not having to reach that big, juicy million dollars or even more. I think a lot of people might think you might need a more than $1 million, but it's, you know, certainly not the case. And it'll come down to the individual. Right.

Alex

And also the idea that if you can't afford right now to contribute to your super, because that tends to be the one silver bullet answer that it's okay that we're all feeling a bit of the crunch at the moment, and maybe instead just start from step one, which is engaging with your super.

Matt

Yeah, correct. There's plenty of things you can look at with your super and most super funds will have. So, you know, so many tools and calculators and things available for you at your disposal. So, look, I know it's probably not the first thing people think of when they get home from work is to jump online and have a look.

Ange

No, really?

Matt

I mean, that's what I do, right? Okay. But look at, as I said, if you want to help yourself, you know, I'd certainly have a play around with it and speak with your super fund. If you don't want to speak to somebody on the phone, you don't have to do this so many ways. You can do it digitally now as well. There's even things like digital advice services available these days. So, you know, please take advantage of it.

Ange

Thank you again to both of you for coming and joining today's episode.

Matt

You're welcome. It's been awesome.

Ange

Thank you. And, Sarah, I'd love to dive in a little bit deeper into that. Women and super topics. That'd be great to have your back. Oh, yeah. For another episode.

Sarah

Okay, let's do it.

Ange

Amazing. Lock that in, guys. You heard it here first.

Ange

So please make sure to like, follow and subscribe

Alex

For any more information on the things we spoke about today there’ll be some links in the description below.

Ange

And that is..

Ange&Alex

Super Simple!

Alex

We acknowledge that we are recording this podcast from the lands of the Gadigal people of the Eora nation. We pay our respects to Elders past, present and emerging and celebrate the diversity of Aboriginal and Torres Strait Islander peoples and their ongoing connection to land and waters throughout Australia

Ange

Welcome to super simple chats, Rest’s very first podcast. I’m Ange..

Alex

And I’m Alex

Ange

And we will be speaking to industry experts about all things super.

Matt

Wait, what the hell is contributions as well?

Ange

I didn’t realise until recently, that super is invested, I thought it was like a savings account

Sarah

I’m not sure it’s helpful to talk about specific numbers, but it’s a lot less than a million dollars.

Person

This is actually really important to talk about, because I don’t want to miss out on those things

Ange

Trying to make it understandable and relatable for every day Aussies.

Alex

After all, it’s one of the biggest assets you’ll ever have.

Ange

Now this wouldn’t be a financial podcast, if we didn’t start by mentioning that the information discussed is general only and doesn't take into account your own financial situation, needs or objectives. This information and the relevant products are issued by Retail Employees Superannuation Pty Ltd. Before deciding to join or stay, consider the relevant Product Disclosure Statement and Target Market Determination at rest.com.au/pds and whether it is appropriate for you. While we have endeavoured to ensure the accuracy and reliability of the information provided, there may be inadvertent errors or omissions. Before acting on any advice, we recommend you speak with a financial adviser.

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Ange

Most people associate the five love languages with their relationships. But who says that you can't actually give your super a little bit of love. So joining us today is Matt from Rest, and he's going to be talking to us about how you can give you super love and how that might help you grow your support for later. So thank you for joining us today

Matt

G’day and thanks for having me. I didn't realise I was a love expert.

Ange

Today it’s love and super.

Alex

They go hand in hand. Everyone knows this.

Ange

We are going to be throwing this at you. So firstly, do you know what the five love languages are? And if you don't, that's okay because we're going to be rapid fire questioning you.

Matt

Semi, semi familiar. But if you want to fire them at me and I'll see how they relate to super, I'll, I'll give it a crack.

Ange

Amazing. Let's give it a crack Alex okay?

So if your love language is quality time, how could you show that by loving your super.

Matt

Quality time, okay. I think for me, you know, super’s a long term investment is something you're going to have for 30 to 40 years in some cases. So just get to know it a little bit more. So engage with you super as much as you can over that time. And it's probably going to make a big difference come retirement.

Alex

Okay. What about acts of service?

Matt

Yeah. I think simply just probably just keeping on top of your super. Maybe just checking that your employer is paying, that their contributions might be something that relates there.

Ange

Amazing. What about for those who it's physical touch?

Matt

Physical touch. Oh, this is probably one that's close to me and close to my heart. And I think it would be, potentially downloading the app of your respective fund. Most super funds have an app. I’m a little biased working at Rest. We have a great app.

On the whole, most funds do have an app, and it's the easiest way that you can stay on top of your super, check all your balances, contributions, everything. So that would be probably that physical touch. I know it's more the eye-thing scanner these days, but some have still got the touch button to open up the phone

Ange

Well it is super at your fingertips, right?

Matt

That's it. That's what they say. So yeah I think downloading the app of your respective fund that would be the best thing there.

Ange

Amazing.

Alex

Okay, from now for my love language: words of affirmation.

Matt

Words of affirmation okay, so we're getting into detail now. I think, what I would think of here is probably around opening any comms you get from your super fund. So I'm sure there's, there's emails that people receive from their super fund and they may go to spam, they may not get opened. But there's one really important comm that comes once a year, and that's your annual statement. So I think probably just opening that statement, having a look at it, seeing what's going on with your account and your respective fund, probably that would be the best thing to do there.

Ange

Amazing. And one of my favourites, don't tell my husband, gifts!

Matt

Yeah, geez, who doesn't like gifts. And I think for me, gifts probably just relate to.. probably the biggest thing to do with super, and that's contributions going into your account. Whether that's, your employer contributions or contributions that you're putting in yourself. So, they're the greatest gift of all going into your super. So certainly something I can relate there with the love languages is, you know, gifts and contributions for sure.

Ange

Who said you can't love your super? There are five ways you can love your super.

I guess super is one of the biggest assets that most people have in their life lifetime. And it's one that actually, to your point for quality time, grows over your working life.

And I guess going back to the gifts question, what are some ways that people could contribute to that superannuation?

Matt

Yeah you’re so right about being one of the biggest assets. I think most people, super will be their biggest asset outside of the family home when they come retirement. So yeah, the contributions going in are very important and there's probably to two core ways. There are a few other ways, but there's two core ways that you can receive contributions. The first one being what's referred to as SG or super guarantee. Now these are the contributions that, your employer pays into your account. So, your employers, you know, mandated to, to by law to pay these contributions. And at the moment it's a rate of 11.5%.

And when I first started working in super was 9%, and before that it was even smaller. But it's come a long way. So much so it's actually going to 12%, next financial year as well. So, you know, all these additional amounts going into your super compounding of the lifetime of you working will make a big impact on your account.

The other way would be, you know, what's referred to as salary sacrifice. Now, these are additional contributions that you're basically asking your employer to redirect from your salary or your pay into your super.

Now, there's a few ways you can do this. You can say to your employer, hey, instead of, you know, putting, this extra $100 a fortnight into my bank account, can you redirect it into my super or you can say, hey, look, can you redirect 5% or 2% of 1% of my salary every week, fortnight, month into my super, and obviously for me, you know, this is a great way to, to build your balance.

But at the same time, I'm very mindful of salary sacrificing in the current climate that we're living in. I mean, I'm sure you guys would be fully across the cost of living crisis that we're in at the moment. I'm sure when you go shopping, you notice those, the shopping bags don't fill up as much as they used to as well.

Ange

That’s the truth.

Matt

So yeah, look, I'm certainly mindful of, you know, you know, encouraging, you know, completely encouraging people to, to go ahead and, you know, put as much money as I can into super because, I know every, every cent counts at the moment, but at the same time, you know, it is a great way, if you can afford it, to obviously build up that, that nest egg come retirement.

Alex

Now, Matt, can you myth bust a belief I know that a lot of people have, have. And I've heard this a few times, and that's the idea that if super comes out before you get paid, does that mean you're actually missing out on more pay?

Matt

Yeah. Look, I understand why people would potentially think that. And I think it probably comes back to, you know, if you start in a workplace and you saw a job, add on like Seek and you know, that said that job ad said a $100,000 package. You know, for me, I would probably assume that that meant, package inclusive of super, not 100 grand plus super, but some, some people might think, well, it's 100 grand plus my super, which is 11.5% at the moment.

So I think I think that's where people potentially think, oh, my employee is taking money.

Ange

They trip over the term ‘package’

Matt

Yeah, people are thinking, oh jeez my employers, you know, they've said this, they’re only paying this. And then, you know, this super’s just been taken out of my, you know, my bank account. And it's certainly not the case.

I think for me, it's, you know, obviously it's easier said than done. But when you do start with, with an employer, or even ideally before you start with an employer, is just clarify your, your salary package and just understand what it means to be inclusive of super or not inclusive of super. They do have to pay super, but it's just whether the package specifies it. So certainly something to be mindful of. And then obviously when you do start, have a quick read through that contract, which I'm sure you all do.

Ange

Yes, yes we all do that very much, end to end.

Matt

At the end of the day, it's, you know, it's like it's your money, you know, the money that's going in your bank account is your money, obviously. And the money going into your super account is your money as well. It may not seem real now, but it certainly is real. And you'll be able to access it later down the line.

Ange

we've actually gone out and spoken to everyday Aussies about this exact topic.

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Sinem

Have you ever thought about whether making any additional contributions is the right fit for you?

Man 1

No. Not really.

Woman 1

I have at the moment making additional contributions isn't feasible for me,

Woman 2

I was thinking, but I haven't done anything about it.

Man 2

I did make extra contributions when I was younger. I don't feel I need to do that now.

Woman 3

I did do it like a little calculator thing once, and I was like, oh, I probably need to start adding.

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Ange

So I'm a comms person, so maths is not my strong suit, and I don't like numbers as much as I like words. But for those of us who really want to understand how much super they should be getting paid, how do you figure that out?

Matt

Yeah, I mean, there's some there's some old school ways you can just add 11.5% on top of your how much you're earning. But if you want to do it the easy way, there's so many calculators online. So if you have a look on, the ATO has an Estimate MySuper tool, that you can access, I'm sure if you just jump in to Google and type in super calculators, they'll pop up quite a few as well, so you don't have to do it the old school way. You don't have to get out of pen and paper or even your phone, and put in the calculations.

Ange

That’s music to my ears

Matt

Yeah, I mean, I'd use, you know, the technology these days, you know, within super financial services is amazing. So much better than when I first started working in super and, you know, use it as your friend, it's your helper. And if you're, I'm sure there's some sort of AI out there as well, these days that could help.

Ange

Let's test it right after this episode.

Alex

Let's invent it and live off the money (laughing).

Okay, that's enough talk about calculators and maths for this podcast. You mentioned there were other ways to contribute to your super besides the super guarantee contributions. What are they?

Matt

Yeah so, this yeah, the traditional employer contributions that they have to pay into your account. The other two main ones would be yes, salary sacrificing and first one being salary sacrificing, sorry. And that one is there's basically an arrangement with your employer. You'd ask them to, you know, put in an additional amount into your super every, every pay run. And you can nominate the amount that that is whether it's $5 or $10 a week, which, you know, over the long, you know, over 30, 40 years will hopefully compound into something nice and juicy.

Or you can ask them to, to put a percentage of your salary into your super as well. So that's salary sacrifices, arrange it with your employer.

The other thing you can do as well is just add additional contributions, post-tax contributions. That is. I will actually, sorry, I will just clarify with the sal-sacrifice contribution, there are tax advantages to that in a sense that it's only taxed at 15% as opposed to your marginal tax rate.

Ange

Great, cos that was going to be my next question

Matt

So your marginal tax rate obviously it depends on how much you're earning. 15% tax compared to a lot of marginal tax rates is, is a lot less. So it can be tax advantageous, trying to get that word out. So certainly something to consider.

The other one is member contributions, or voluntary contributions. Now, these are post-tax contributions. This is money that's already in your bank account.

Alex

Okay.

Matt

And if you wanted to start making contributions to your super directly, there's a whole range of ways you can do this. Once again, I talked about an app, the apps before generally within apps, there's B-pay account details or various payment methods, you can pay directly into your super fund. Please note that there are caps on how much you can put into your super, as part of voluntary and sal-sac contributions. Those are available online as well. But, as much as I'd like to say put in as much as you want, there are there, are limits to how much you can put in.

But those are the two, there’s some various other ones. But I think, I think probably for the purpose of today just probably touch on those too, just to give you a bit of an intro into super, there.

Ange

What I'm getting from this is there, there's a before-tax way of doing it in an after-tax way of doing it. So before tax was salary sacrifice, after tax was voluntary contributions.

So if we were to weigh the two, what I guess the pros and cons for each one of those.

Matt

Yeah. There are pros and cons. And I think once again, it does come down to the individual, how much you're earning, you know, how much is going into your super at the moment as well. So I think if you are going to start to look to, to make additional contributions to your super, I would certainly take advantage of any financial advice services your fund offers, because they can run through, these, these sort of contribution calculators with you and talk to you about the pros and cons of each.

I think, I'm sort of mindful of, of sort of giving broader pros and cons because it will affect people in different ways. But there are some really great upsides. But obviously there's a few risks involved as well. And I think as well, you just you need to be mindful that super, once you put money in super, you can't take it out until you retire.

I mean there's obviously ways that that you have been able to, you know, access super early. We saw that during Covid. But they're very special circumstances. So you do need to be mindful that once you put it in there, it's tucked away for, for your retirement.

Ange

And just one thing. So you mentioned earlier that there are tax benefits to that before-tax, or the salary sacrifice, cos it’s 15%. If you were to put money in afterwards. Yeah. What's the tax situation, because you've already paid tax on that.

Matt

Yeah I mean in theory if you've if you've got money in your, in your bank account, you probably pay tax on it at some point. So the beauty about voluntary contributions is there is no tax on them. So when it goes into your account, zero tax, which is, which is fantastic. And obviously another incentive to put it in there. And look, if you're putting money into super like as I mentioned, it's a really good way to save, because you won't be able to take it out for some time as well, as opposed to putting it in a savings account and potentially dipping into it when you want to.

Ange

So I've heard through the grapevine that there are a few ways that the government tries to encourage us to engage with our super. Could you tell us a little bit about these?

Matt

Yeah. There's something, a great initiative called the Government Co Contribution Scheme, and it's aimed to, to help low to middle income earners. And the basically the way it works is, if you contribute a certain amount of money, of your post-tax money into your super, the government will actually add a certain amount as well, depending on how much money you earn as well.

Ange

Is this is free money?

Matt

Well, look, I wouldn't say free money. You have to contribute. You have to contribute some of your own money first. But the government will match it by up to half in some instances. So I think for me, the numbers can get a little bit complicated in terms of how much you need to put in, how much you can get back, but there certainly is an opportunity to get some money from the ATO. So what I would highly suggest is that, if you're listening to this, go check it out online. It's called the Government Co-contribution scheme. And you can have a look at, you know, your eligibility depending on your salary bracket and how much you could potentially get back from the ATO into your super. The best thing about this as well is you don't actually have to apply for it.

When you lodge your tax at the end of financial year, the government will match up any additional contributions you put in yourself and then your salary. And if you're eligible, they'll just make that additional contribution into your account. Assuming we have your tax file number or your tax file number is on the on file at your respective super fund.

Ange

So you don’t have to do anything, it just magically appears.

Alex

Easy peasy

Matt

It just magically appears.

Ange

So it's magic money, magic money. Maybe not guys, maybe not magic money. But that's really great.

Matt

I think for me, it's, you know, it's a really good way, you know, if you, if you're not earning, you know, a significant amount of money, then obviously there's not a huge amount of super going in every year.

So I think it's a really good way to encourage people to, to make additional contributions if you can afford it. And then, you know, getting a little something back from the ATO is always a big, big win, right?

Ange

You know what this reminds me of when I was a kid and like my mum would say, if you put a dollar in the savings jar, I'll match the dollar.

Alex

Such a nice mother.

Ange

Reminds me of that a little bit, but obviously not the same.

Matt

And look, there was, there was a time actually where the government would match it one for one as well. So now you put in a thousand, you potentially…

Ange

Bring it back! (laughing)

Matt

But yeah, but now that the most you can get from them is $500

Alex

That's still pretty good.

Matt

It’s $500, right, that’s something. And look, if you start doing this early, we talk about it a lot in the super podcast. The power of compound interest. Start doing this year on year. It's going to compound into hopefully a nice juicy balance come retirement.

Alex

Okay Matt, well that sounds pretty good. But are there any other ways the government might try and get us to love our super?

Matt

Totally. There's another way, that can assist low-income to middle-income earners as well is something called the LISTO, which is the low income super tax offset. And basically, what this initiative does, it allows you, depending on how much you earn, to potentially get a refund of some of the tax that you've paid on your super up to $500.

But be worthwhile once again jumping online to see if you eligible for this.

And you know, there's plenty of details available on, you know, via the ATO or your super fund as well as search LISTO. And you should be able to pull up some details on that as well.

Ange

And do you have to apply for this? Or is that like the other government contribution, it just appears.

Matt

Yeah. Once again. Similar. Similar to the government co-contribution scheme. As long as you've got your tax file number on file, with the super fund, when it comes to tax time lodging your tax return, the government will match up your, your salary. And then if you're eligible for that, that offset at the end financially automatically like magic in your super fund again

Ange

So we've spoken a lot today about making contributions, but not everyone at the moment is in a position to make contributions to the super, as we kind of spoke about at the beginning with the cost of living crisis and stuff like that.

So if you can't make contributions, what are some of the ways you can show your super some love?

Matt

There's a really easy way you can show you super a lot of love. And that would be potentially downloading the app of your respective super fund. Think for me, I'm obviously slightly biased working at Rest, but we have a great app and I know a lot of other super funds have great apps too.

Within an app, you can check your balance, your contributions from your employer, any additional contributions that you've been putting in as well, insurances and you know, your investments too. So, you know, it's the easiest way to be engaged with your super, you don't need to call, a call center or wait for that annual statement. It's at your fingertips.

So the easiest way you can show your super bit of love is downloading the app of your respective fund and having a look at it every once in a while.

Ange

And just engaging with it?

Matt

Engage with it. That's it. And look, if you if you can afford to make a few changes, look, I would highly suggest speaking with an adviser before making any changes.

But, you know, super now is very much at your fingertips. And I know, you know, working in industry for some time, I'd love more and more Australians to be engaged with their super. It will make such a big impact come retirement.

Ange

Thank you so much for joining us today, Matt. I thought that was a really great episode.

Matt

You’re welcome. Thanks for having me.

Ange

You'll be thinking about love languages all the way home now.

Matt

Of course I will. Of course I will.

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Ange

So please make sure to like, follow and subscribe

Alex

For any more information on the things we spoke about today there’ll be some links in the description below.

Ange

And that is..

Ange&Alex

Super Simple!

Ange

Keep in mind that tax rules can be tricky and are always changing. The information provided here is for general informational purposes and should not be considered as tax advice. For advice that fits your own situation, it's best to chat with a licensed tax professional.

Alex

We acknowledge that we are recording this podcast from the lands of the Gadigal people of the Eora nation. We pay our respects to Elders past, present and emerging and celebrate the diversity of Aboriginal and Torres Strait Islander peoples and their ongoing connection to land and waters throughout Australia

Ange

Welcome to super simple chats, Rest’s very first podcast. I’m Ange..

Alex

And I’m Alex

Ange

And we will be speaking to industry experts about all things super.

Matt

Wait, what the hell is contributions as well?

Ange

I didn’t realise until recently, that super is invested, I thought it was like a savings account

Sarah

I’m not sure it’s helpful to talk about specific numbers, but it’s a lot less than a million dollars.

Person

This is actually really important to talk about, because I don’t want to miss out on those things

Ange

Trying to make it understandable and relatable for every day Aussies.

Alex

After all, it’s one of the biggest assets you’ll ever have.

Ange

Now this wouldn’t be a financial podcast, if we didn’t start by mentioning that the information discussed is general only and doesn't take into account your own financial situation, needs or objectives. This information and the relevant products are issued by Retail Employees Superannuation Pty Ltd. Before deciding to join or stay, consider the relevant Product Disclosure Statement and Target Market Determination at rest.com.au/pds and whether it is appropriate for you. While we have endeavoured to ensure the accuracy and reliability of the information provided, there may be inadvertent errors or omissions. Before acting on any advice, we recommend you speak with a financial adviser.

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Ange

So most people think of super as a savings account, and what they don't realise is that there's actually a lot more to it. So, for example, many Aussies don't realise that they can access insurance through super.

So, joining us today is Bart from Rest. He's going to be giving us a bit of a 101 on insurance through super. So thank you for joining us today.

Bart

No problem. Thanks for having me. Hello, Ange, hello, Alex.

Alex

Hey, how you going?

Now, when I think about insurance, I typically think of, you know, health insurance. Car insurance. Super doesn't really come to mind. So if we can start from the very beginning, what insurances are available through your super.

Bart

Yeah. Of course. So I think many people know different types of insurances and they have different types in their life. And a few that you just mentioned then: car insurance, home and contents insurance. So with that type of insurance what you're doing is you're insuring a thing.

Whereas the insurance inside superannuation, and there's a couple of types of will go through, is about ensuring a human being. So really important. So if you want to go through the three that you can get inside.

Alex

Oh yes please go.

Bart

So the first one's really easy and probably the most well known. That's life insurance. And in life where either alive or we're not.

And if you are not alive, the purpose of life insurance that is there to provide, a lump sum payment to people that you may be leaving behind. And the purpose of that is to cover things like debt that you may be leaving behind in your life. And then also looking to offset perhaps a loss of income that you would have had, had that circumstance not taken place at.

The second type of insurance is called TPD. So TPD stands for total and permanent disability. So this is worst case scenario. So this is when you are disabled to a point where you will no longer be part of the workforce. So really terrible situations. And again it's a lump sum payment designed to cover things like debt that you might have in your life, as well as if you think of someone being disabled to a point where they may need to make modifications around the home.

So be that having to be in a wheelchair or needing other assistance than that that capital that TPD insurance provides can help fund some of that. And then lastly, the third type is called income protection. Now sometimes it's referred to as salary continuance insurance. They're interchangeable that the exact same thing. And with income protection what you're doing is you're protecting your income.

So you are insuring yourself or your ability to be able to earn an income. Now, income protection will cover you for any injury or illness that stops you from working, and it's designed to replace that income while you're not working. And there's a few technical aspects to it, which I'm sure we’ll break down in this chat.

Ange

Just on that, because I've heard of people taking out workers comp, for example, if they can't go to work. What's the difference between something like IP or income protection versus worker's compensation? And is there like, can you use one and not the other, or can you claim both or what's the kind of go with that.

Bart

Yeah. So they can be some interplay between the two. So work cover is a type of cover that an employer would take out to cover their workforce while they're on site. So while they're in the workplace now, if an individual was to hurt themselves in the workplace, their work cover would typically cover that. And it'll look to provide a financial benefit to the individual to help out with costs and other things that might be associated with that injury.

Ange

Yeah. Got it.

Bart

Now, the difference between that and income protection is income protection is taken out by the individual. And income protection will cover you for not only while you're at work, but all other times in your life as well. With work cover, you're only covering for injuries. With income protection, you're covered for injury or illness. So it could be as simple as falling over and breaking your leg and not being able to work as a result of that.

Or it might be if you were to say, get cancer or have a heart attack and be unable to work because of that, that illness, then that's when income protection can, can cover the individual.

Ange

I was actually reading an interesting member story the other day about a nurse who was in a situation where she injured herself outside of work. She broke her leg, and she wasn't able to work, given the nature of having to be on her feet in her, in her type of work. And she didn't know she had income protection, and she was a little bit financially stressed at the time. And someone asked her there, like, oh, have you checked with your super fund to see if you've got income protection? And she's like, what's that? So, she called up Rest. And lucky for her, she did have income protection and she was covered and put in the claim, got the claim paid out. Essentially. And that let her essentially recover and have that financial stability. And I guess what we don't realise is, you know, a lot of Aussies don't know that they've got this cover.

So I want to I was hoping that maybe you could explain what the purpose of insurance is, and some of the practical reasons why someone might take out insurance through super.

Bart

Yeah. Of course. So the example that you just provided about the lady not knowing she had insurance and finding out after the fact, that's a story well told.

And the wonderful thing about superannuation is it does have the ability to provide insurance to the individuals. Now, anyone listening to this would want to double check with their super fund, whether they're with Rest or someone else, because it doesn't come automatically with your account from day one. Now we can sort of talk through this, but there has been a change in legislation called putting member's interest first, or PMIF as we call it, in the industry.

And one of the components was to look at, I guess the reason for having insurance inside superannuation and to try and set some boundaries around, naturally the insurance comes at a cost and that costs can erode someone's retirement savings, particularly for younger people, which is what the legislation was looking to address. So what the regulator didn't want happening and what was happening in some instances is that a young 18 year old was getting a superannuation account, all very exciting. They might get a contribution from their employer for $20, which is fantastic, but then they'd lose half of that to pay an insurance premium. And so it wasn't giving them the best start to their retirement journey. So the rules that are in place now is that insurance is not automatically included. You have to jump two hurdles before the super fund will provide it if they provide it.

The first is that you have to be over the age of 25 years old, and the second is that you have to have a balance larger than $6,000.

Ange

So quick, quick one on that. So you said that you have to be over 25. Can someone under 25 choose to take out insurance? But it just doesn't automatically kick in.

Bart

Absolutely. It just doesn't automatically kick in. And I don't know too many 20 year olds that walk around thinking about life insurance in super are desperate to line up and put it into…

Ange

Really? They don't really?

Bart

They should. And this is kind of the purpose of our chat because when you like, you asked me before the purpose of insurance, why would someone take out insurance with any type of insurance, whether it's car insurance, home contents insurance, or life insurance?

Really what you're doing is you adjust your hedging risk. So you're saying to the insurer, I have a risk with this thing or with myself, and I'm concerned about it. And rather than self insuring and having to absorb that risk, can I give you some money and you'll take on some of that risk for me. So the example of a young person now, someone might have recently bought a home or they might have taken out debt to buy another asset.

They may have recently, started a family, got married. So they're starting to think about a time in their life when it's not just about them. Because I could argue that insurance isn't really about you, it's about other people. So life insurance is not for the individual who has the life insurance. It's about and it's about providing financial support to those that you may be leaving behind.

Now, a young person, and we touched on before the legislation about a young person, perhaps 20 year olds that think about it. I mean, I could easily put forward that when you're 20 years old, you have more long term risk in your life than, say, a 50 year old. Because if you think of the timeline of your earning potential, it's all ahead of you.

If you think of maybe your debt might be at a level where you can't service it. So there's many factors why a young person would look at insurance, but I think what I've noticed is that it's not really an age when people look at insurance. It's more a moment in their life, and it's a moment in their life where they reflect and they think about others and they do. You know, life starts to get a little bit real. And so that's typically the moment they'll start thinking about, life insurance or TPD or income protection.

Ange

I think it's really interesting that you sort of mentioned that, like normally when we think about insurance and risk, particularly around health, we sort of instantly go to the older audience. The older you get, the more likely that you might have some health problems, etcetera. But actually, to your point, when you're younger and your mortgage might be bigger and you've got young children that you're supporting, that's actually the time in your life where you probably would need to be protected by the sounds of it.

Bart

Yeah, that's exactly right. And the way insurance works inside, well, all life insurance works, whether it's inside or outside of superannuation, is, as you mentioned, the older we get, we all get one step closer to the grave and the chance of things going wrong, becomes more likely.

So when you're young and healthy, statistically, the insurance is cheaper because you are less risk to the insurer because it is less likely, statistically, that you would claim.

Alex

Now, does the type of work you do or could do affect your insurance? So say, if I'm writing on a laptop all day and I suddenly can't use my wrists, would that play into it?

Or is it that you can't work any occupation at all.

Bart

For TPD insurance, you mean?

Alex

Yes, or income protection

Bart

Yes so both of those type of covers are disability covers. So they're looking at injuries or illnesses. Yes. You're right. So your occupation does play a part. Now inside of superannuation, it's probably less prevalent than what it is outside of superannuation.

And the reason I say that is that typically insurance inside superannuation is what we call group insurance. What that means is that you're not typically underwritten if you're just taking insurance that the super fund gives you. So you're given this insurance and you haven't been underwritten. So they haven't asked what do you do for work. You know, do you do risky activities on the weekend? What's your health history like? Do you smoke? You're not getting asked questions. So you're just going into a plan. You're in the swim with everyone else. So it's a group policy. Now, if you were to consider the same type of insurance outside of, superannuation, typically you would go through an underwriting process.

And what they're trying to do there is measure your risk as an individual. So what we do for work plays a big part. Now I work in an office. The chances of me hurting myself at the office, I don't know, a paper cut, light falls out of the ceiling, hits me on the head. Not really likely. So I’m less risk.

Ange

You don’t get wrist cramps every time you write?

Bart

Actually, I do, so I'm less risk to an insurer’s eyes from a work aspect. Whereas, you know, if you think if I was working on a construction site, working high rise, risks are more prevalent chances of me hurting myself are more likely, so potentially I'd have to pay more to place that risk with the insurer.

Ange

So we went out and spoke to some Aussies about this.

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Sinem

Do you ever get worried about potentially being injured and not being able to work?

Woman 1

I haven't really thought about it too much. I have a desk job, so at the moment I don't really think about that too much. But yeah, I guess it is probably something I should think about.

Woman 2

I have never worried about that.

Sinem

Do you know whether you have insurance in your super so that you don't have to worry about that?

Man 1

I know that I've got it. And it covers me for, death, disability…

Man 2

…for any loss of life, and I think there is some insurance for the medical emergencies.

Woman 1

I know a little bit about it, but probably not as much as I should.

Sinem

Do you know whether you're covered?

Woman 3

I don't actually. I don't know. You have opened up a new world for me.

Sinem

Back to you Ange.

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Ange

So slightly aligned to what we were talking about. But I read somewhere that about 4 million Aussies have multiple super accounts. In fact, it was the ATO that said this 4 million Aussies have multiple super accounts. What happens if someone wants to close one of their super accounts and can this affect their insurance coverage?

Bart

Yes. Doing my role, I'm often out, so I work closely with employers who contribute to Rest. And so I'll often go out in the workplace and I'll talk to members, Rest members.

And one of the first things I'll ask him is, are you sure you only have one account? Is it just Rest? Are there others because you can. On the Rest app you can find out really easily. Or you can do it through myGov quite simply as well. And the, the most I've seen is 13 accounts.

Ange + Alex

Ooh. Unlucky number.

Bart

I had one of them in front of me pull it up. They had 13 different accounts. Now, the reason why you may not want more than one superannuation fund, and there can be reasons why you might want more than one, but one reason would be you're doubling up on fees, and you could probably put insurance premiums under the banner of fees in that regard as well.

So naturally, if I've got two superannuation funds, accounts, I might be paying two sets of administration fees, which is really inefficient because you could do it with one. Same with your investment costs. You're doubling up on that and then like you mentioned Ange, insurance premiums. Now again, you would have to double check. Not every super fund provides insurance. So it doesn't mean you automatically have insurance if you have, a superannuation account. But you need to double check that. Now, if you've got a double up of insurances because you've got more than one account, there's a double up in cost in the insurance premiums that you're paying. And where this is really important is for income protection insurance.

So for income protection insurance typically, and there's a little bit of movement between insurers and different policies. But typically you're allowed to insure up to 75% of your income. So if you earn 100,000 bucks a year. You can insure up to $75,000 a year typically. Now if you have two policies you can't double dip, so you can't, you wouldn't be able to claim on two policies if the total of their benefit payments were to be more than what your pre-disability, or 75% of your pre disability income is.

So effectively you would be paying for something that you wouldn't be able to use.

Ange

You could only essentially use one, and really, you'd be picking the one that's going to pay you the most.

Bart

Perhaps. Yeah perhaps.

Ange

What about on the flip side? So I have actually spoken to someone who has chosen to create two super accounts simply because one of their accounts was for their insurance and the other one had better fees. So why would someone do that? Like, I'm just trying to wrap my head around why some would want to have two super accounts to keep an insurance open.

Bart

Yeah. That's right. So we mentioned before underwriting. So, if you were to take out a policy outside of superannuation, typically you have to go through underwriting and they're going to ask you all about your health and your lifestyle and assess you as an individual and how risky you are to them. And then that will be commensurate to how much you have to pay for your insurance. So if I was if I started out and I had a Rest account and that came with insurance as part of it, and I didn't go through underwriting, so I didn't have to disclose any pre disability illnesses or injuries that I may have.

And then life goes on and I've put on weight and I maybe, you know, drink too many beers on the weekend and I stop exercising and you know I might have sort of more of a prevalence to some, some illnesses. So if I were to go through underwriting at that point, the insurer might say, one, you're going to have to pay a lot of money here for us to take you on is a risk, but they also might exclude things. So they might. If I walked in there and I'd broken my back previously, they might say, well, we're going to put a back exclusion on your policy so you can claim on if you were to hurt your back again. Whereas the insurance that I hold inside superannuation, I haven't gone through that process. So it may be that I would keep an account open for the purpose of holding that insurance.

Ange

That makes that makes sense now.

Alex

It's so interesting because before this episode, I was looking at the ASIC money smart, was it the life insurance claims comparison tool? And it actually showed at the time of recording that, your payout likelihood can be better if you go with insurance through super.

Bart

I don't know about that.

Ange

Ooh controversial

Bart

But I will say this, I will say this. So prior to working at Rest, I worked as a financial adviser and, I would spend a lot of my days, helping people protect themselves or protect their assets through life insurance and business owners. And in my experience, the insurers really approach claim payouts with the right intention that that's all I've ever experienced. So I know insurance, you know, I can come with connotations that they're trying to rip people off or, you know, take their money and then not pay it at claim time. But in my experience, all the claims that I've seen have always been assessed fairly, whether that is inside of superannuation or outside of superannuation. Often they're the same insurers.

Often you can get, you know, the same insurer through, superannuation. And if you were to take it outside, it might be that you're going through the same insurer as well.

Alex

Look, I'm not brave enough to argue with ASIC, so I'm glad someone is (laughter)

Ange

What I'd like to know is why do super funds offer insurance? What's in it for them?

Bart

From a financial point of view, there's nothing in it for them. So we partner with, one of Australia's largest insurers to provide insurance to our members because we believe in it, there is no financial incentive for us. We are an industry fund, we’re a profit to member fund. We don't make a profit. So we certainly do to look to financially benefit from having insurance or doing a deal in the background doesn't happen. So there's no financial benefit for us, but we truly believe in it.

And one of the great things about our income protection policy that we offer through super is that it comes with a five year benefit period, whereas often there can be a benefit period less than that. So two years or less number super funds don't offer insurance at all. And also casuals and part time workers can take out income protection policy with Rest as well. Now the history of that is our history is steeped in retail. So read the retail industry and typically retail workers are a more casualised workforce and a typical retail worker who is working part time or casually find it really hard to get income protection outside of superannuation.

Ange

Why is that?

Bart

Well, it's a tough job. You're on your feet all day, you're bending, you're bending up and down to pick up things. You know, if you think of. So some of the hardware stores that you go into, people up and down ladders, it's a demanding job. And so, so in addition to that, it would be pretty tough for them to get an income protection policy with a five year benefit period as well.

So that's a that's sort of a wonderful thing that we provide to all our members, if that, you know, they do want to have insurance.

Ange

That's great. That's really good to hear.

Alex

Now jumping to something slightly different, we've talked a lot today about your physical health as it relates to insurance through super. But what about mental health like can super through insurance support you if you were dealing with a mental health crisis as opposed to a physical health crisis?

Bart

Absolutely. So with income protection and with TPD insurance, what we like mentioned before, it will cover you for any injury or illness that stops you from working.

Alex

Okay, okay.

Bart

Now the prevalence of mental health claims has gone up, quite a lot over the last number of years. So it's a common claim. Now I might be making this up, but I think about 1 in 4 income protection claims are for mental health reasons, which often surprises people.

The fact that they can even claim on it that mental health Is an illness. And if that illness stops you from working, then income protection can cover you for that.

Alex

Amazing. Well, thank you for sharing that because I think that's one that would actually affect of a lot of Aussies. But you don't often connect mental health physical health and through insurance.

Bart

Yeah, absolutely.

Ange

And I guess going to the point before we said, you know, older the audiences are more likely to take out the health claims. But that younger audience, you know, that's where maybe they would see the benefit younger in their lives earlier on in their lives, like, oh, okay. Well, mental health might be a space that I should be thinking about insuring myself on.

Bart

So yeah, that's and it gives you peace of mind. Right. And that's what insurance does. Insurance is just a plan B, you know, like life happens. No one no one wants to or plans to become ill or injured. But it happens sometimes. And, you know, if you think about, I guess, having the, the, the financial support to help you through those times is huge.

Because, you know, if you were to injure yourself seriously not only have to go through all that, then not have money to support yourself and not have an income coming through to support yourself, that would be terrible. So insurance can play a really important part in, you know, getting people back to work.

Alex

Well, that's great to know, but are there any disadvantages to having insurance through super.

Bart

Yeah, there can be, and I guess so we spoke before about group insurance. So once you cross those two hurdles, being over 25, balance over $6,000 insurance then kicks in. But we haven't asked anyone about their situation, their personal situation. So we've got 2 million members, about a third of those or close to 40% have insurance. We haven't asked those almost 1 million people, can you tell me about how much debt you have in your life? Are you married? How much do you earn, there's so many things, so many factors that go into determining the right level of cover.

So if you've got the default amount of cover, you might be under-insured, you might be over insured, you might not need insurance, but you don't know.

Ange

And how do you check.

Bart

You can check, at Rest you can check on your app. That'll tell you how much insurance you've got. But we've also got two other wonderful tools that people could take advantage of versus financial advice. Speaking to a human being. So Rest is pretty unique where we have financial advisers, they're all based here in Sydney. They're all wonderful people, I know them personally, they sit on our floor, and the purpose of their role is to help Rest members. Now that could be through picking the right investment, that could be having the right contribution strategy, that could be planning for retirement.

But insurance plays a part there as well. So they can run through a questionnaire with a Rest member, and that will help them determine the levels of cover that they should have based on things like debt and other assets that they have in their life. And then the individual can go and either take out more insurance or reduce it down to, a lower level or just, you know, do some tweaks to make it more individual for them.

Now that comes at, that service of insurance advice for Rest members comes at no additional cost to the member. Now, if you didn't want to speak to a human being…

Ange

I was just about to ask. For those of us who are from the generation who do like to pick up the phone…

Bart

Digital advice. So Rest is incredible at digital advice, so you can go through the same process, but rather than being on the phone talking to a human being, you’re prompted questions through our digital advice, process, and it's going to ask you questions like about your situation. Are you married? What is the value of your assets? How much debt do you have? How much income would you like to provide for someone, or allow for if you were to pass away? So at the end of that process, you get a suggested level of cover that you should have as well. And then you can go and put that in force and go through the process.

Ange

Great.

Bart

And look, if nothing else, a Rest member could use it just for peace of mind. They could go through that process just for peace of mind. Maybe the level of cover that they've got now. It's really good. They go through that process and find out. So I really encourage everyone just to consider it.

Ange

Give it a go.

Alex

So and if you aren't a Rest member, how can you find out about your, superannuation insurance?

Bart

So I would say get in contact with your superannuation fund directly, whether that's digitally through an app that they might provide or pick up the phone and give them a call. That's the best way to ask. Some people think that, you can see your level of cover through myGov, your insurance. So if you go into myGov, it'll tell you what superannuation funds you have. And it can also tell you if you have insurance. Yes or no?

Alex/Ange

Oh I didn't know that.

Bart

But it won't tell you how much insurance you've got or what type of insurance you've got. So always best just to speak to your super fund directly, right.

Alex

Well, thank you so much for joining us today, Bart. I know this wasn't the easiest topic, and it's one that I mean, I personally didn't know that much about until I even turned 25 and would consider it. So I really appreciate you breaking it down for us.

Bart

Thanks so much. It was lovely chatting to you both. Thanks for having me.

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Ange

So please make sure to like, follow and subscribe

Alex

For any more information on the things we spoke about today there’ll be some links in the description below.

Ange

And that is..

Ange&Alex

Super Simple!

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Ange

Before combining your super, consider which fund is right for you. Check out the fees and costs of your funds plus any benefits that would be lost, such as insurance cover. Make sure your other fund(s) knows about any contributions you intend to claim a tax deduction for, before combining your super. If you have any questions, speak to a licensed financial adviser or visit the ASIC MoneySmart website for more information.

Keep in mind that tax rules can be tricky and are always changing. The information provided here is for general informational purposes and should not be considered as tax advice. For advice that fits your own situation, it's best to chat with a licensed tax professional.

Alex

We acknowledge that we are recording this podcast from the lands of the Gadigal people of the Eora nation. We pay our respects to Elders past, present and emerging and celebrate the diversity of Aboriginal and Torres Strait Islander peoples and their ongoing connection to land and waters throughout Australia.

Ange

Welcome to super simple chats, Rest’s very first podcast. I’m Ange..

Alex

And I’m Alex

Ange

And we will be speaking to industry experts about all things super.

Matt

Wait, what the hell is contributions as well?

Ange

I didn’t realise until recently, that super is invested, I thought it was like a savings account.

Sarah

I’m not sure it’s helpful to talk about specific numbers, but it’s a lot less than a million dollars.

Person

This is actually really important to talk about, because I don’t want to miss out on those things.

Ange

Trying to make it understandable and relatable for every day Aussies.

Alex

After all, it’s one of the biggest assets you’ll ever have.

Ange

Now this wouldn’t be a financial podcast, if we didn’t start by mentioning that the information discussed is general only and doesn't take into account your own financial situation, needs or objectives. This information and the relevant products are issued by Retail Employees Superannuation Pty Ltd. Before deciding to join or stay, consider the relevant Product Disclosure Statement and Target Market Determination at rest.com.au/pds and whether it is appropriate for you. While we have endeavoured to ensure the accuracy and reliability of the information provided, there may be inadvertent errors or omissions. Before acting on any advice, we recommend you speak with a financial adviser.

Ange

Having a baby is meant to be one of the most exciting moments of your life. However, most people don't really want to sit there and think about their finances.

But taking time out of work can really take a significant toll on your super. Joining us today is Sarah from Rest, who's going to talk to us about all things women and super.

Sarah

Hi. Thanks for having me.

Ange

We hear a lot about the gender pay gap. And, you know, we hear about it in the media all the time. But one thing that I've noticed that we never really hear about is the gender super gap. Can you give us a little bit more information about what exactly that is?

Sarah

Yeah, thanks Ange.

It's this knotty problem, isn't it, that because superannuation is so highly connected to pay and work that not only do we have a gender pay gap, but that flows through to a gender super gap.

So you've got a difference fundamentally of about 28% between what women retire with and what men retire. That's a big difference. You're talking a lot of potential income in retirement in in a difference in between men and women.

Now the drivers of those, a whole range of things, including taking parental leave when you have a baby, but also the things that follow on from that. You've got general family caretaking, you've got a greater amount of unpaid work at home, generally by women. Once you have a baby. So those life changes have a flow on effect after that time as well. Greater amount of part time and casual work done by women, which generally, lower paid and more broken. So we've got an assumption that superannuation is built on that is that you work for 40 years full time, and for women that is just not the case.

Alex

Absolutely. Now this is a topic that's very near and dear to my heart. I'll do the baby reveal. Phil, if you want to throw in some sparkle emojis a little picture of Harry styles, like, could he be the father? Create some mystery.

Ange

Are you saying something?

Alex

Please start that rumour. When it comes to my situation and many peoples’ situation.

Because I work for a super fund. One of the first things I thought about when I got pregnant was how will this affect my super. And that's probably not everyone's first instinct, but we are pretty lucky that our super is paid on parental leave, and this is becoming more common, I'm pretty sure. So is that fear quite common with soon to be parents?

Sarah

Yeah, I think it's a really common feeling that as, particularly women approaching having a baby, they've had careers frequently or at least had work for a period of time, and that feeling of now you're about to enter a period of no or limited income is actually quite scary.

It's a shift, isn't it, from thinking of yourself as a working person to now it's much more about what is your household? What does it look like? Where is the money coming from? Who is doing what around all of those caring responsibilities and managing money. It's a really big step, not just becoming a parent, but actually thinking about your financial life in a different way.

Ange

And do you also find that that there's a shift, even after you sort of come back from parental leave and you go back into the workforce? Do you find that a lot of women see a bit of a difference in the trajectory of careers or sort of their everyday kind of managing of life and how that impacts them long term as well?

Sarah

Yeah, absolutely. So it's really interesting. This and research out there by Right Lane Consulting, they have a report called Forces at Work.

They last year looked at what is women's experience of superannuation.

And over a lifetime, what does that look like. At the at the age that sort of 25 to 34 is only a 4% difference in super. So that's manageable, you know, you would think that it would sort of project this same over your lifetime, it doesn't because of these patterns that stopped coming around broken work patterns, but also after parental leave, which is predominantly taken by women.

And I will say here, it doesn't have to be. Parental leave is actually available to both parents. And they just one of the decisions that people should be looking at is what are your options around sharing that leave availability?

But then even once you come back from parental leave, it's not uncommon for women to go back part time or even look at other jobs that make it easier for them to be around home, which often might be casual or lower paid.

And you've also potentially got just lower contact with your workforce and less opportunity for networking, less opportunities to talk promotion. It's this shift in how you are at work that often plays out.

Alex

And you touched a little bit on both parents being able to take time out.

Now, I know personally my husband's dream, and I hope he doesn't mind me saying this would be to be a stay at home dad.

But there's a lot of stigma in the workplace around feeling like as a man, you can take parental leave or the full leave, not just say two weeks and then come back.

Sarah

It's important to remember that parental leave is available to both and can be just divided up amongst that whole 12 month period can be taken by either parent.

You can't take it generally at the same time, although some employment arrangements do allow for some of it to be taken at the same time, there is a real workplace feeling that it's not okay for men to do that at that younger age actually, the pay gap generally is lower, so it's not as simple as it used to be about, well, the husband gets paid more, so of course he should keep working. It's not necessarily the case anymore at that age. And so it's a different decision making process. And it does often involve that sort of cultural impact of are men taking this leave? I think it's actually really important for senior men in workplaces to take it to actually, set that example.

Alex

That's such a good point. So it flows on from the head, more people will take it from below. Yeah.

Ange

So this next question is a little closer to home for me, literally my home. So thinking about my own parents when I was growing up, my mum probably took about, I say 6 or 7 years off to have both me and my brother and pretty much raise us right up until the point of school, and then entered the workforce.

And I was having a conversation with my parents recently and found out that Mum’s Super is significant, lower than Dads. Now, working class family. They were both on pretty similar wages when they were working, but just taking that 6 to 7 year gap had a pretty significant impact on mum’s super.

My question is that when you're taking time off work, what are the long term implications for Aussies who are unpaid carers like my mum?

Sarah

Look, it's a sticky policy government kind of problem really, and I think we need to look at that whole experience not as an individual's problem to solve necessarily, but have we got the settings right across the board? When we look at the fact that there are significant numbers of people in our workforce who don't work the whole way through.

So I'm involved in an organisation called Women in Super. One of the remits that we have is to look at government policy and what are we what are we doing as a whole economy to make sure that the settings are right for women’s’ experiences in the workforce, and of superannuation.

You know, there's a number of things potentially within super, but it's a bigger problem than that, It's about the balance of unpaid work as a whole. And are we acknowledging that as an economy, carer's payments, even if you even if you do get a carer's allowance from the government, there's no superannuation paid on that. So it's still, as far as super is concerned, a gap. The fact is, superannuation is not your only income when you get to retirement. And this is why we have the age pension. The value of superannuation is still really significant when used against other available income.

You've got even the concessions and the benefits that you get from even having a part age pension are really financially important. You know, things like travel concessions and rebates on you, energy and water and all of those kinds of things.

There is actually retirement income system out there that is there to support balancing out what you need when you get to retirement.

Ange

We went and asked everyday Aussies what they thought about this.

Sinem

if you were to go on parental leave, would you split your super with your partner?

Woman 1

Probably. Probably.

Woman 2

No.

Sinem

You've never thought about it? You'd never do that?

Woman 2

No, no. He’s got his own super so I don't think we should split.

Man 1

Really? I don't know all these options.

Woman 3

So I've already actually finished having kids. But at the time, no, I didn't split the contributions.

Sinem

Do you worry about the gender super gap or the differences in men and women's super balances at retirement?

Woman 4

I know there is a difference. Well, that's my problem as well. I minded my children now I’m minding my grandchild. So yes, it shows in your in your balance.

Woman 3

Well, I know that my ex-husband has significantly more super than me. So I imagine that at retirement, it would be very similar circumstances. Yeah.

Woman 5

I would be devastated to know. Don't tell me, to know if the if my partner. I haven't actually even asked him if he earns, if he pockets more in his super.

Sinem

Back to you Ange.

Ange

I'd actually read somewhere that women over 55 of the largest growing cohort of homeless people in Australia. So can you kind of give us a little bit of insight into how this super gap and is actually starting to impact women later on in life, and some of the kind of more negative impacts that we're seeing, such as this statistic around homelessness.

Sarah

It's really concerning. And it's predominantly single women over 55 who have either widowed or more frequently divorced, later in life, has taken a lot of time out of the workforce to raise children or to look after elderly parents or other family members, and they get to that later in life period. They don't own a home. They have very little superannuation because of broken work patterns and caring responsibilities, and that puts them in a really vulnerable spot.

Some of the work that we're doing in Women in Super is looking at, let's actually do work to make sure that women retire into safety, and that includes housing.

And the availability of social and affordable housing in Australia is just so significant that we you know, I cannot overstate how much that is something that needs to be addressed, because that is as important to retirement as all of the other factors as well.

You need somewhere safe to live.

Alex

Well, the super scheme didn't actually start in Australia till, what, 1992? Please correct me if I'm wrong, which means there is an entire generation of women who never had that, if they did work, as a compulsory part of their pay.

Sarah

So yeah, absolutely. Yeah. As a compulsory scheme 1992. So there are a lot of women who only had it available for part of their lives. Now we're not even seeing people who are retiring now, we've only had it for a small portion. We're not going to see people retiring that have had super for their whole lives for at least another ten years.

Alex

As a soon to be parent, a lot to take in, and I want to lessen the fears that myself and many may have.

So what actual steps can I take today, or could my partner take that might lessen that impact on my super? When I take time off?

Sarah

Look, there are several things that you can look at individually. It's just been, put into a bill that's in Parliament right now that will give superannuation to be paid on the Commonwealth paid parental leave scheme.

Massive when lots of lots of work has gone into advocating really strongly for that. So that's a really good bit of news coming up. And the dollar value of that over a lifetime is significant because of the power of compounding interest. And you're looking at money going into super at a relatively young age. And the power of that building up over the rest of your life up until retirement is, is significant. It's not marginal. It's actually a really significant difference.

Other options, I mentioned before this need to look at now your household more than you were before because of that balance of income. So involve your partner.

There are options around splitting contributions. So if somebody is still working full time, you can actually split according. You know, you need to seek advice to see whether that is going to work for you. Look at the potential of using if you've, you know, had the ability to build up a bit of savings in advance, could some of that go into super to sort of fill that gap.

Ange

So, Sarah you just touched on the Commonwealth pay parental leave finally adding super. Now I'm really intrigued to understand what is the actual impact of this long term. Like what are the tangible things that we're going to see for women by having super on paid parental leave?

Sarah

This is a really sort of firm dollar impact, because money paid early in super has a compounding effect over your working life. The modelling that we've got says that for a Rest member, a mother of two who gets paid superannuation on the Commonwealth Scheme for both children at retirement, will be better off by 14,500 dollars.

Alex + Ange

Wow. That's incredible. It's amazing.

Sarah

I'm going to plug a couple of, I'm going to plug a couple of books around this because this is this is a topic very close to my heart.

Ange

Please do!

Sarah

There is a book out there. It's a bit old now that's called the Post Baby Conversation.

It is still available as an e-book, so I highly recommend that one. The other one that I have is this Fair Play.

This is an amazing resource to work through. How does your household work? Who does what and why? There is a card activity, card game that comes with it where you can, as a couple, look at how we’re dividing this work, is done in the right way, so highly recommend.

Ange

I need to get one of those, not saying anything about my husband.

Sarah

But it’s often when babies come we revert to gender roles. It's so multi-generational. That's where we end up frequently. And so unless you actually consciously challenge it, it's potentially not going to happen.

Ange

So what I'm really hearing from you is it's not so much about just solving the problem for women, but it's equally solving the problem for men and how we start to elevate them in the experience and really pushing them into some of those non-traditional roles as well.

Sarah

Yeah. Yeah, absolutely. The other things are around flexible workplace arrangements.

Ange

Oh that's a big one, especially these days.

Sarah

It really is. It's so front of mind now. It's almost not thought about like, you know, there is an expectation that where possible you have work from home arrangements, noting that we have in Rest membership really significant numbers of people for whom it is not an option.

So working from home for a retail worker is frequently, if you're on front desk, you can't do that. There are quite large numbers for working from home’s not an option, but things like working around pick up and drop off times and making shifts available to women when they don't have direct, caring responsibilities and being able to plan in advance.

One of the problems that casual workers often have in working around their responsibilities as parents is they only find out a few days in advance when they're going to be working and organising childcare. In that time, it's really hard. If it's not regular, I think there's some workplace change still to happen around that. And accessible and affordable childcare.

It so often comes back to can you get childcare and is it affordable? The big decisions it's a big cost. But also are you happy with the childcare? Is it in the right place? It does it work in with your work.

Ange

I'm about to take this conversation in a completely different direction, but I recently read somewhere that there's a bit of a bias towards “blue” jobs versus “pink” jobs. Have you ever heard about this? So it's like the government is more likely to go and fund male dominated industries as opposed to female dominated industries, and that also has a big impact on the pay gap. And then subsequently the super gap. What do you think that we need to start advocating for outside of just super to really kind of shift the social dynamic?

Sarah

Australia has one of the highest gender divided workforces in the world, and it is true that frequently male dominated jobs are higher paid and female dominated jobs are lower paid. Look at caring, nursing, childcare, aged care, teaching…

Ange

…versus construction.

Sarah

Exactly. For some reason, we've ended up in Australia with the divide between that pink and blue divide being more significant than anywhere else. It's astonishing. And that does sort of have this compounding effect on the pay gap, which leads to the super gap.

Availability of education for women into the industries that get higher paid. The argument is often made that, you know, all women aren't in those areas because they don't want to be. It's often also not encouraged, and they are workplaces that often aren't family friendly.

It's built in that there will be a difference. So I think there is a need to look at, you know, what are our government schemes around education and training funding and where does that go?

That said, there is a huge demand for at the moment for construction. One of our housing problems is that houses aren't being built, fast enough to keep up with the demand.

So yes, there does need to be education and training leading into those industries that are in high demand. But is that being done in a way that encourages women to be involved as well and access those opportunities?

Ange

I'd also read somewhere that if more money was spent in the caring industries, so childcare, aged care, etc., that does also then allow women to go back to work full time, which frees up a whole kind of sector of individuals who are able to then do the work, and then that boosts the economy. So it actually can become quite a cyclical thing. And really like it's as simple as just putting some money where we need it, guys.

Sarah

Absolutely. There is a really strong compounding effect of investment in childcare and early education generally, not just childcare that frees up women's time, but actually invest in early education for young children as well has a compounding effect in the economy.

Alex

I feel like this is a lot of information, but I'm feeling a bit more positive about everything. Like there is a lot of scary statistics, but there's a lot of good in here and actions you can tangibly take. Is there anything else you would want parents to be like me to know?

Sarah

I think just reflecting back on some of the things, have the conversation with your partner.

It's so easy to just step in. We get lots of talk about prenatal classes and having a baby, and what it's like to have a baby, and we don't actually extend that out too, well, what does what does our life look like with this new person involved in it? How will those responsibilities work? I think there is, you know, some work around workplaces, being friendly to young families and actually encouraging women back to work.

We should have workplaces that are breastfed friendly. There is actually accreditation that you can get to be a breastfeeding friendly workplace. There's all of those sort of supports that are available. I think we just need to sort of pull it all together a bit.

Ange

Probably just normalise it a little bit more. I think that it's a systemic issue, but we need to normalise that as well in our every day.

Sarah

Yeah, yeah. And the other thing I would say is, you know, we have we have this vision of, of working mothers being able to do and have it all. And I don't think that's fair as a pressure on particularly young women. But you can have bits of it, but it takes a team.

And I think that's probably the biggest sort of message out of this is to look at this as a team.

Alex

Absolutely. And even if you don't have a partner with you, maybe that team is family. Maybe that's an amazing network of friends, but trying to not go it as an island, if you can.

Sarah

Absolutely.

Ange

And I probably say just one more thing, is that consideration of super when you are looking at your finances and budgeting, when you are having a family.

And so I think that's one thing that always gets overlooked, right? You don't think about your super, you sort of go, oh, what are the immediate spending things I need to think about? And you kind of go, oh, what about the long term? What's the long term impact? And kind of having that front of mind when you're doing that, going through that process as well I think is important.

Sarah

Absolutely.

Alex

Nappies, crib, superannuation.

Oh well thank you so much for joining us today Sarah.

Sarah

That's my pleasure. It was really good fun, thanks.

Alex

Yeah. No problem. I really hope that this helped. Not just me, but some other parents-to-be out there.

Ange

So please make sure to like, follow and subscribe

Alex

For any more information on the things we spoke about today there’ll be some links in the description below.

Ange

And that is..

Ange&Alex

Super Simple!

Ange

Welcome to Super Simple Chats. Rest's very own podcast. We will be speaking to industry experts about all things super. Trying to make it understandable and relatable for everyday Aussies. After all, it's one of the biggest assets you'll ever have.

Ange (V/O)

We're recording this podcast on Gadigal land. We pay our respects to elders past and present.

Any advice you hear on this podcast is general in nature and doesn't take into account your financial situation, needs or objectives. Issued by Retail Employees Superannuation PTY LTD. Before deciding to join or stay, consider the relevant PDS and TMD at rest.com.au/pds.

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Ange

Hi, I'm Ange, and this is my co-host, Andy. And look, until I started working in super, the idea of what happens to my super when I pass away, hadn't really entered the equation. Like I had thought about, you know, what happens to my apartment or what happens to my car. But at no point had I thought about what happens to my super and also the insurance in my super. And really, you know, when you think about like passing away, I just like to think about the epic party that everyone's going to have in my honour.

But now that I'm actually here, I'm like, oh, maybe we should talk about this because I'm probably not the only Australian that's gone, ‘I've never actually thought about what happens to even when you die.’

Andy

Yeah, I guess like super feels kind of intangible, right? Like it's this thing that's there. It's not like a house or car that you can see and you can touch and you can feel, but it is one of your biggest assets.

Ange

That’s a really good point.

Andy

So it makes sense to really think about this and make sure you're getting it right, getting it set up, because ultimately it will be for someone you love and you want those things to go to the people you love.

Ange

Well, on that note, answering this string of morbidly interesting questions is Sam from Rest. Welcome to the podcast, Sam.

Sam

Thanks, guys. Thanks for having me.

Ange

I just want to know, what would happen to my super when I pass?

Sam

Firstly, so sorry for your loss, you'll be sorely missed.

Ange

Thank you, thank you very much.

Sam

So with your superannuation, it doesn't automatically fall into your estate, like what your apartment or your car or, other assets will. So what will happen is when you pass away, either one of your family members or the ATO will let us know that you've passed away. And then that's when we will jump in, have a look whether you've got a beneficiary listed on your account. And then we pay according to that beneficiary.

Ange

Okay, so just to clarify that when you say the word beneficiary, do you mean like the person that gets your money when you pass away, or people maybe? Like what does that mean?

Sam

Yeah, absolutely. So it is the person or people. Or you can also nominate your estate to receive your…

Ange

Okay. Yeah.

Sam

Because there's laws around who you can actually nominate as a beneficiary, sometimes your closest loved ones don't actually fall into those categories. So that's when you're able to nominate your estate and then have a will sat in the background that will nominate those people for you.

Ange

Okay. That sounds like hard work.

Sam

It's no, it's actually not too bad. I've done it myself. So, I have nominated my estate. So if I was to pass away, Rest would have a look at my beneficiary nomination form. It would say my estate. And then I've also got a will set up which would say that I leave it to, half and half to my mom and my brother. Lucky them if they’re listening.

Ange

Gosh you’re organised.

Sam

Yeah, so that is just because I can't, I can't legally nominate my mum or my brother as my beneficiaries.

Ange

Yeah, got it. Okay. We’ll get to that, I’ve got a bit of a story for that, we will get to that a little bit later.

Andy

So is that, did you have to nominate your estate because super doesn't automatically form, like doesn't automatically just fall into that bucket. It's, something manually has to happen.

Sam

Yeah.

Andy

Right okay. Interesting. I've always thought that like it would just naturally like, there would be like some logical thing that would happen. But I guess if you don't nominate them, what are you going to do, like haunt Rest? Like how are you going to let them know, you're going to come back as a ghost?

Ange

Ooo!

Sam

Exactly, what do you actually want done with it?

Andy

Open the elevator door one time and yeah, like spooky. But that won't work. I guess. I'd imagine it would have to be like, yeah, you let them know before you go. Goes to your estate or it goes to a beneficiary.

What is that thing called? Does it have a technical name or something like ‘the payment’ or is it, is it just money? What do you, what do you call that?

Sam

So it's called your superannuation death benefit.

Andy

Right.

Sam

So what will get paid out, if you pass away, is your balance of your superannuation as well as, if you've got life insurance inside your super. So say you've got $100,000, for example, of life insurance inside your super that also gets paid. So whatever your balance is, plus that because you've passed away, the whole lump sum will go to whoever your beneficiary is.

Andy

Okay.

Ange

Lucky them! So what happens if no beneficiary has been nominated?

Sam

So if you don't have a beneficiary on your account whatsoever, Rest well then follow the laws that are in place and use their discretion based on your circumstances at the time of death. And then they will pay according to their discretion. So, that could potentially be as simple as paying it to your estate. But the money still will get paid out somewhere. It's just it takes a much longer for Rest to determine where to pay it.

Ange

Interesting. Well, I've got a story for you guys, a bit of a personal one. And I can tell you now, my husband's not going to be too happy that I'm sharing it, but I am going to do it anyway. So I got married about a year ago. A bit over a year. Pretty much the week that I got married, I went in and I updated my beneficiary on the Rest app to be my husband. And then I spoke to him about it about a year later, like it came up in conversation. And we spoke about it a few months ago, and I was like, oh, who have you got listed as your beneficiary on your super app? And I was so shook by the answer, he goes, oh, it's my mum. Like, not even his dad. His mum. And I was like, no, you can't have your mum as your beneficiary. He's like, why not?

Firstly, like, let's not even unpack that, because why not? I'm your wife. But beside that point, you’re not allowed, my understanding is you're not allowed to have your mum. So for the people listening at home who are like my husband and have their mums is their beneficiaries when they shouldn't. Can you tell us who you can and can't have as a beneficiary?

Sam

Absolutely. So, what it falls under is what's called a SIS Dependant. So a SIS dependant will be your spouse. It can also be a de facto partner as well. Your children, they automatically fall under a dependent under the SIS Act. And then the last one is, whether someone is in an interdependent relationship with you.

So it also falls with, things like, perhaps you're looking after an elderly parent. So things like that as well, will fall under the SIS act.

Ange

Okay, so under certain circumstances, Ross could have possibly put his mum down.

Sam

In this instance, I don't think so.

Andy

It's so much more … it's like the thing that's surprising me now is it's like, well, there's a lot to a dependent, you know what I mean? Like, it's a bit more complicated than what in the back of my mind, I thought it would be. And it's quite interesting. I get where Ross is coming from. I fall into the mumma's boy bucket. I'd be like, all right, let's just pop in mum. She's also my, you know, emergency contact and all that other stuff.

Ange

I should have predicted this.

Andy

Yeah, but, I can 100% get that she's no longer a dependent, right?

Sam

So in that instance, the nomination will be deemed invalid. But Rest still then can use their discretion as to who to pay the funds out to. So they could, potentially say, pay it into the estate. But it's just the with the binding nominations that, like I said, it supersedes your will. So whatever you have listed, it goes to them. And it's just really quick because we don't have to look into it. As long as that's valid. Rest doesn't have to look into it. And the money just gets paid and it can get paid within a matter of days in that instance.

Ange

So it's a faster process. Doesn't take as long.

Sam

Yeah

Ange

So, like my husband, who now I hope has given some great thought into who he could nominate as his beneficiary. How easy is it to nominate a beneficiary, and what's the process?

Sam

So with a non-binding nomination, it is super easy. It is as easy as jumping into the Rest app, and filling in the details and setting it up, hitting enter. And it's good to go. It's a little bit more difficult with the, binding nomination, just because it's quite an important legal document as I mentioned. So with that one, we do need a signed form that also has to be signed by two witnesses as well.

Ange

Okay. You know what though, actually might be really helpful if we get Phil to show us exactly how to nominate a beneficiary in the rest app. Phil, over to you.

Phil (V/O)

Thanks Ange. So I'm going to show you how to nominate a non-binding beneficiary in less than a minute. Grab your phone and open up your Rest app. Now tap menu and beneficiaries. Seems easy enough. Select non-binding beneficiary. Type in their details, then tap done. Make sure you consider your situation, and who in your life you can validly nominate before going through the process. Simple. Back to you, Ange.

Ange

That was awesome. Thanks, Phil.

Andy

So, Sam, you mentioned just briefly there, binding and non-binding beneficiaries. In my mind, it sort of seems like at the moment one's trickier than the other one. Can you just explain to me the difference between the two?

Sam

So binding beneficiaries are a bit more official. So what we do need is a form signed, as well as signed by two witnesses. So it's a legally binding document. So that's why it's a bit more complex, getting that one through. So the nomination form will walk you through how to fill it out. It's pretty straightforward. It'll go through things like who's eligible to be a witness on the form. But if you do find that it's a little bit tricky. We've got financial advisers that can help talk you through it.

Ange

Beautiful, that doesn’t sound too bad.

Andy

So those financial adviser are there for our members, right?

Sam

Correct.

Andy

Rest members? Yeah. Okay. Cool. Why would you want to choose a non binding beneficiary, if it's not actually legally binding?

Sam

So with you non-binding beneficiaries, Rest will still take into consideration what you've listed there. It's way, way quicker to do like we saw with Phil before. It can take like two minutes to pop in your details. So it's just much easier and quicker, to do the nomination. But then with your binding nominations, there is a bit more involved in getting those in, with the form and your witnesses. But once that in, once that's in, that's legally binding and that's where Rest is going to pay the money to.

So if you want that peace of mind that if you were to pass away, it's going exactly where you want it to, no discretion involved. Then that's where you would look at a binding nomination. Keeping in mind, though, that they do lapse every three years. So you've got to keep on top of it.

Ange

Got it. And when I was doing it myself, I noticed that, when you are doing a non-binding, because I haven't done a binding personally, although I probably should after this chat, with my non-binding, it asked me to round it up two whole numbers. So if you have an odd number of people, does that mean that you have to get selective about who's going to get more than the other?

Sam

Your favourite will be noted on that piece of paper. (laughing) So like if you've got three kids, someone's getting 34%.

Ange

Ooh, okay.

Andy

I'm getting the 34%. Well it's..

Ange

Are you one of three, Andy?

Andy

No I’m one of four. Yeah. So probably 25… Yeah.

Ange

Even numbers, easier to manage, odd numbers, not so easy. Okay, that could get tricky.

Andy

No, one of my sisters getting written out. (laughing) No, that's not happening. Yeah, yeah, yeah, they're all on it. I love you all. I'm sorry. Yeah.

Ange

Are there any other types of beneficiaries that we should be aware of? We've touched on binding. We've touched on non-binding. Is there any others?

Sam

So with our pension accounts there is a nomination called reversionary beneficiary. So what that does is, if you're receiving your pension payments as a monthly payment, you can nominate someone, your spouse, for example, to receive the payment as a monthly payment rather than the lump sum, if you choose to do so.

Ange

Okay, so they receive it like a pension.

Sam

Absolutely.

Andy

Sure, keeps that income coming in.

Ange

Yeah. Great.

So we went out and spoke to everyday Aussies about whether they've nominated their beneficiaries.

----

Sinem

Do you know what a beneficiary is, have you ever heard that word?

Person 1

No, I have not.

Person 2

I know the term, but in this context… no

Person 3

Yes

Person 4

Is that the person receiving the money, yeah?

Person 5

Uh.. I don’t

Sinem

So if you could pick anyone to be your beneficiary of your super, who would it be?

Person 4

My mum

Sinem

Your mum? Aww

Person 6

My family

Person 5

My fiancée.

Person 2

Probably my sister.

Person 3

My spouse.

Sinem

Your spouse?

Person 3

Yeah

Person 7

Well, my beneficiary is my wife

Person 1

Pick my mum.

Sinem

Your mum? Why?

Person 1

Oh, because she's done heaps for me,

Sinem

Cos she's your mum?

Person 1

So you know, give it to her, give back.

-----

Ange

Okay, so we've covered a lot of ground today. We have learned about what happens to super when you pass away. We've learned about the different types of beneficiaries and how to nominate them. In fact, we’ll be sure to pop some of the links in the show notes below, especially on how to nominate a beneficiary.

But before we go, there's just one more thing I think I have to do.

(ringing husband)

He's going to hate me so much for this.

Ross (on phone)

Hey, babe.

Ange

Hey, honey. How are you?

Ross

Good. How are you?

Ange

I'm alright. I've just got a quick question for you. You know how we were talking earlier on this year about your mum being nominated as your beneficiary? I was just wondering, have you actually updated that or is your mum still your beneficiary?

Ross

I think you're on it now.

Ange

Aww, good answer babe!

I will talk to you a little bit later, alright?

Ross

I'll see you later, bye.

Ange

Bye.

To be honest, I was actually kind of hoping that he would say his mum, just because I thought it would make for really good content. And I’m actually disappointed.

Andy

You nailed it, Ross.

Sam

We love an organized king.

Andy

Absolutely smashing it.

Ange

So he's a good husband after all.

Andy

Yeah, yeah. I better get onto mine before my wedding.

Ange

Make sure you do.

Andy

Thanks so much for listening. Make sure you like and subscribe and leave any comments that you'd like to, if you'd like to learn anything else about super. We've learned so much today and I feel I've had a really great time. Thank you, thank you and thank you.

Ange

And that's…

Andy & Ange

Super simple

Ange

Welcome to Super Simple Chats. Rest's very own podcast. We will be speaking to industry experts about all things super. Trying to make it understandable and relatable for everyday Aussies. After all, it's one of the biggest assets you'll ever have.

Ange (V/O)

We're recording this podcast on Gadigal land. We pay our respects to Elders past and present.

Any advice you hear on this podcast is general in nature and doesn't take into account your financial situation, needs or objectives. Issued by Retail Employees Superannuation PTY LTD. Before deciding to join or stay, consider the relevant PDS and TMD at rest.com.au/pds.

Ange

Hi guys, I'm Ange and I'm here today with my co-host Andy. Now, there has been an elephant in the room that I think we need to address today. So there are a few myths that need busting, and I think we need to go through some of the big ones and break them down. So joining us today is Sam from Rest.

Sam

Hi, guys. Thanks for having me.

Ange

So first myth that we are looking to bust. Now, I've recently heard on some social platforms (cough) TikTok, that people tend to leave comments that super sounds a little bit scammy. Now, for our listeners at home, can you tell us why it's not

Sam

Okay, nice big juicy one to start us off.

So super at its heart is a savings plan for retirement. I can understand how the, ordinary demographic that would be listening to (cough) TikTok, would be in that sort of younger cohort that is, sort of looking at the superannuation system and thinking, I can’t touch this money for many, many, many years. So I kind of understand how they might think that it's a bit scammy, but…

Ange

Like, do they even realize they can touch the money in many, many, many years?

Sam

Well, that's the point though. It's like forced savings for retirement.

Andy

Yeah. I can imagine it’d kind of feel like when I was, when I was 12 I had my own little lawn mowing business. And we go around little, little houses in Bega, and we mow the lawn and we get paid maybe 50 bucks a lawn between me and my business partner at the time, right.

Ange

Did you pay tax?

Andy

But my… my mum took that money and I remember her keeping it from me. And I was like, “This is a scam!” That's… but I can imagine, it would feel a bit like that when you're, you know, 20, 25 and you're like, oh, this money is being put aside for my future. I got that money, but…

Ange

I was just about to ask, so was she putting it aside for your future?

Andy

Yeah, she was trying to encourage me to save, trying to teach me how to save.

Ange

So your mum’s like a glorified super account, really.

Andy

Yeah. Well, in this situation, kind of. There's a lot of nuances to get into. But at one level, yeah definitely.

Ange

Mum, if you’re listening at home.

Andy

Yeah. Yeah, yeah. And yeah she's… she's great. I think that's the thing, right. When I felt this sense of outrage I was like, this is an injustice, I earnt my money, that's my money, I worked for this. But, you know, at the same time, it's there, and it I was always getting that. And that was the point she was trying to make, right?

Sam

Yeah. Just not available straight away. Yeah.

Andy

So I kind of feel like wherever there's, like, a misunderstanding, right? There's a space. And in that space, we like to fill it with assumptions and guesses about what things are. So, just to clear it up for our listeners, where does your super come from?

Sam

So it'll come from your employer. So, if you are over the age of 18, or under the age of 18 and work more than 30 hours in a week, you are eligible for what we call the superannuation guarantee. And that is paid by your employer, which is a minimum of 12% of your eligible salary or wages paid into your superannuation account. So if you have a look at your payslip, you will see that there will be a little section where it will show you that you've been paid superannuation.

Ange

So let's say you're on a salary. My understanding is then they'll look at your salary and they'll go oh, okay. It's 12% of that. Or a minimum of a minimum of that. And then they'll do the math, and that's what goes into your super account.

Sam

Correct. Yeah.

Ange

Got it.

Andy

So what you're telling me, is that if I looked at my payslip, I should be able to say the word superannuation with the figure next to it.

Sam

Yep, absolutely. So it might say SG, for super guarantee but it, it should always be on there. It's a requirement of law for an Australian payslip to have payments, deductions and your superannuation.

Ange

And is it ever any other acronyms or is it always just...

Sam

It might say SGC so superannuation guarantee contribution.

Ange

Yeah so I thought I’d seen something like that in the past, and I was like what does the C stand for.

Sam

Yeah. So contribution.

Ange

Yeah. Got it. Okay. And can you explain to our listeners at home, what actually happens when that money hits your super account?

Sam

So you know how rich people will often talk about having a investment portfolio?

Ange

I don't know that many rich people to know what kind of conversations they have.

Sam

I just like at the movies. So if you've got a superannuation account is kind of like an investment portfolio. It's just in a superannuation environment where you can't access it until you retire. So Rest will receive your contribution from your employer. And we invest it as per your investment option choice. You can check that by jumping into the app as well. So you can, log into your app. It'll show you what your investment option is and you can see your balance in there as well. And, you know, where, how it's going in the market.

Ange

Beautiful.

Andy

Right. So having a superannuation account is like people working there in the background, putting money aside for me and investing it for me. I've kind of got like my people on it, you know, like

Ange

(laughing) Your people!

Andy

That’s so cool. Is there any way that I can see the outcomes of this? Like where… where can I go see my balance?

Sam

Yep, so that's in the Rest app. So if you just jump in to the Rest app, you can pretty much see everything related to your account within the app, including your balance, including what your investment option is.

Ange

Alrighty. Well, that's myth number one done. So, myth number two?

Super is just another business where if you get more members and you get more people on, you get more money, right? Now we've heard some comparisons of other types of businesses that operate in this way. Can you please explain the difference to us and why a super fund actually benefits from getting more members?

Sam

So the two main types of superannuation, are retail super and industry super.

Sam

So Rest super is an industry fund, which means that profits go back to our members. With the retail funds, their profits go to their shareholders. So that's the difference between the two different types of super funds.

Now with, our profit to member fund, the reason that we would, welcome more members is because then we've got the scale there where we're able to, you know, put the profits back to the members and, you know, reduce things like fees, reduce things like insurance premiums, because we've got that scale there that we can sort of pull those costs back for each of our members.

Andy

Right. One of my favourite quotes is by an investor and he said, “Show me the incentive and I'll show you the outcome.” Right. And what I love about the fact that our business model, the profits go back to members, is that the incentive for our business isn't to help shareholders, it's to really make sure that what we're doing is in our members’ best interests, and making sure that the outcomes of our actions, like getting more members, sees, some kind of benefit to them.

Ange

Well, that is really wholesome, Andy.

Andy

What can I say? I love super, yeah…

Ange

I knew we could convert you. Not scammy at all.

Andy

Yeah, I mean, I don't know, I feel like, like there's a bigger point to be said here, which is I feel really lucky to work for superannuation. I've worked in lots of different financial businesses, and I've sold lots of different products in my time as a copywriter and a content writer, and I think it's really easy to forget that the product we sell ultimately is there to support people in their retirement, and there's so few products that are like that. There are so few products where you're not just trying to take people's money, you're trying to give them something back.

Sam

Absolutely.

Andy

Sorry, that's very emotional.

Ange

Anybody got a tissue box?

Andy

We know that's not the case, but what can we actually tell them so that they feel reassured?

Sam

So, superannuation falls under the financial services industry in Australia which is heavily, heavily regulated. So, the government has put a lot of rules in place to make sure that super remains, its sole purpose to help people in retirement. So that's why you can't access it until retirement.

So if you turn, 60, which is our preservation age, and you retire, you're able to get access to your superannuation funds, as soon as you hit age 65, regardless of whether you're retired or not, you also have access to those funds.

Ange

Okay, so it's not that the super funds are taking our money, it's that the government has put this process in place in order to help people have a better retirement.

Sam

Absolutely.

Ange

Yeah, that makes sense to me.

Andy

Yeah, yeah. Me too.

Sam

So there are other conditions, that you are able to access your funds, ahead of retirement. One being, transition to retirement.

Now, transition to retirement is a great initiative. Might not be great for everyone, but I would strongly recommend chatting to a financial adviser around that, see if it works for your circumstances.

Ange

Is that if you’re coming up into retirement but you’re not quite ready yet?

Sam

Correct. And then financial hardship. That's a really strict one. But it is there in place for people that are, you know, in severe financial hardship. So again, I'd probably chat to an adviser around those couple.

Andy

Yeah, we actually have some articles on our website about severe financial hardship. And I can tell you now it's really not easy to get money, access to that money, but we will post links to those articles in the show notes so that if you are in those conditions, you’ll understand.

Ange

Have some support, yeah.

So there is another term that I've heard floating around that could possibly sound a little bit suspicious if you don't know what it means. And that's profit to member. Can you just explain to our listeners at home what that term actually means?

Sam

Yep, so profit to member means that our profit goes to the members. We don't have any shareholders, as a profit to member fund. So, any profits, you know, in an ordinary business will sort of filter through to your shareholders.

Ange

And there is the magic word: Fees.

So I think there's a little bit of misconception and possibly a bit of angst when someone here's the word fees and they don't actually know what those fees are and how they're being spent. It just sounds a bit like, oh, you're taking my money. What are you doing with that? So can you break down for us what, the different type of fees are?

Sam

Yep. So you'll see administration fees…

Sarah (V/O)

Hey, it’s Sarah from Rest’s product team, just jumping in to do a couple of quick clarifications. The first one is that there are also administration costs which are known as costs met from reserves. Which as the name suggests are paid from the fund’s reserves and not from your account.

Also, just wanted to clarify that each time you hear Sam say ‘investment fees’, she actually means ‘investment fees and costs’. Now, back to the pod!

Sam

…That covers things like, us collecting your money from your employer. It includes things like any correspondence that we need to reach out to you for. And it also includes things like keeping the lights on and making sure the call centre is still working.

Ange

Like business overheads, like any business, salaries and all that sort of stuff.

Sam

Correct, so that's your administration fees. Then we've got investment fees (and costs). So that is the fees (and costs) that are incurred in terms of investing your funds.

Ange

Okay, so that's slightly different.

Sam

Correct. So the investment fees (and costs) are a little bit different. And then the third one is transaction costs. So, they include things like buying and selling investments.

Andy

Okay, sure.

Ange

There are also buy / sell spreads, that are incurred every time you transact, like make a contribution, or make a withdrawal. Now we're getting into a little bit of complex territory. So I'm thinking let's just put some links in the show notes. And if you're really interested in understanding the breakdown of fees, feel free to just pop down there, click on the link and learn more.

Andy

If you're a nerd like me, it's surprisingly fascinating. If you're not like me, and not many people are…

Ange

I'm just like, take my money and just make sure it works.

Andy

But yeah, it is. It's interesting to know that like, yeah, those fees are going to different things and they are, yeah, that makes sense, right?

Ange

As with any business you got to keep the lights on.

Andy

When are these fees collected then. Like, let's say I imagine that they have to come from somewhere. Where do they come from and when do they go.

Phil

Sam, I’ll take this one. Producer Phil here.

I'm going to tell our listeners how find their fees and costs on their annual statement in around a minute.

So if we look at an annual statement, you’ll find a standard table called the ‘fees and costs summary’. It’ll be there no matter which fund you’re with. This gives you the breakdown of all the fees and costs you’re paying.

You’ll see both the fees and insurance premiums that have been deducted directly from your account. If you’re extra curious, you can find these ones in the Rest App too.

There’s also a spot for ‘fees and costs deducted from your investment.’ Here you can see the estimate of the fees and costs that have been deducted from the fund’s reserves, or that you have paid via the unit price of the investment option you’re invested in. In short, Unit Prices are important because they’re used to calculate your account balance. But more on this another day.

Most importantly, we have the ‘total fees and cost you paid’. This is a sum of the 2 sections above.

You can find your annual statement in the Rest App.

Simple.

Now back to the pod.

---

Ange

Shameless plug for the app, if you don’t have it already.

Andy

Get that app!

I think yeah, that it makes sense. I feel like looking at the apps, kind of like looking at your bank account where you get to see the withdrawals and deposits, right. And so you can actually just fully see all those details if you look at your annual statement…

Ange

I mean, like banks have their fees too, it all works. Yeah. Got it.

We’ve discussed some really interesting myths today. And I'd really like to go and hear from everyday Aussies about what they think about them.

---

Sinem

Do you know anything about how fees work then your super?

Person 1

In my super? No.

Person 2

Well, I know there are fees. Like, when you work with brokers and all that, you have to pay fees.

Person 3

No.

Sinem

No? Okay.

Person 4

I don't know in detail. I do know I don't like it.

Sinem

What do you think your fees pay for, or are used for?

Person 5

I think it's like for the maintaining, for the maintaining of my super.

Person 1

I don't know. I really haven't thought about that.

Person 6

It is what it is. Maybe that's a bit like a daisy, but slight is.

Sinem

That's fine. You know, a lot more than a lot of people we’ve asked today as well.

---

Andy

So I feel like we've gone through and we kind of… now we understand and we've answered the question about these myths. Right? So we know that super is definitely real. There's a way that you can go and see it and where you can kind of make it a little bit more tangible for yourself and get a good understanding of it. We know why super funds like Rest want more members, right? And why we actually ask to grow our customer base and why that's a good thing. And I feel like we've also got a pretty good understanding around fees. And we get like what they're going to and what they're for. I feel like we've answered a lot of really good basic questions.

Ange

That sounds like three myths that have been busted, Andy.

Andy

Consider them dead!

Ange

Well, thank you so much for your time today, Sam. We really appreciate you coming in and answering all these questions for us and hopefully for our listeners at home. You're a little bit at ease knowing that super is not a scam, and that we’re not trying to take your money, and actually it is for you and for your retirement. Of course, if you have any questions about your super or if you've got any other myths that you'd like us to look into in subsequent episodes, be sure to leave some notes in the comments below.

Otherwise, click on the link, subscribe and make sure that you check out our Shownotes for any links.

That is…

Andy & Ange

Super simple.

Ange

Welcome to Super Simple Chats. Rest's very own podcast. We will be speaking to industry experts about all things super. Trying to make it understandable and relatable for everyday Aussies. After all, it's one of the biggest assets you'll ever have.

We're recording this podcast on Gadigal land. We pay our respects to elders past and present.

Any advice you hear on this podcast is general in nature and doesn't take into account your financial situation, needs or objectives. Issued by Retail Employees Superannuation PTY LTD. Before deciding to join or stay, consider the relevant PDS and TMD at rest.com.au/pds.

------------

Kate

Before we started this episode, we undertook some research.

Kerry

We did.

Kate

And we spoke to everyday Australians around, what does retirement look like for them?

One of those was a gentleman who is still working full time, and he wants to transition to retirement, but only for the purpose of fishing all day long and having coffee with his friends. Then we had another lady who we spoke to and she's retired, she's full time retired now, and her plan is to have all her time with her fur babies and to catch up with friends for coffee and walks.

Then we had our third person we spoke to, and this one was a little bit different, and it was more around doing a slow intro into retirement where she's working three days and then she's got the two days off and she gets to enjoy doing things like art classes and going to ceramics. And so a very different way to think about retirement.

So then Kerry and I spoke about that and realized just how different everyone is in how they're thinking about retirement and what they want for their retirement. But one thing was clear is, it's really hard to find a way through it or a way to understand what are the steps I need to take to even be thinking about any of those options that I have available to transition to work full time, to do it part time, to fully retire.

And so that's what we'd like to cover and talk to you today about.

Kerry

We're going to break down how to plan for retirement into three simple steps. One, we're going to visualize and plan for your retirement. Two, we're going to figure out your budget and spending. And three, we're gonna look at some smart tips to help you get ahead with your balance.

Kate

And we’re going to do it all with the help of one of our experts here at Rest.

Pete, welcome to the podcast. Thanks for joining us.

Pete

Thank you Kate. Thanks, Kerry. It's great to be here.

Kerry

So let's start with step one, Pete. So visualizing and planning your retirement. Like, I have to admit, like it's really hard to know what retirement is going to look like.

What's your tips on, I guess getting started with that.

Pete

I guess if I can start off with, one of my favourite quotes when I talk about this, that.. that hope is not a plan. Okay.

Kerry

I love that.

Pete

I do too. It's one of those things that, you know, a lot of us, sort of… hope’s great, but it's not a plan. So I guess the best place to start, Kerry, is timing. Alright. So thinking about when do you want to start your transition to life after work?

You know, from your current work life and the pace of it's at when do you want to start moving to something slower? When do you want to start downshifting as is becoming a bit more of a a common term in your in your work life. And at what age will you start that. So that's a, that's a very big question because once you've identified that age you can then work back from there, to see how long you've got before that that transition period starts and you start to put some structure around it all.

So I think I think many will agree that, you know, if we want to do some things, we've really got to be intentional about it. And make sure that we, we get to do the things that we want to do. And without intention, hope just might not get us there.

Kerry

I love that, I love downshifting.

Kate

I was going to say the same thing!

Kerry

I’ve heard of downsizing, but not downshifting. Is that that, sounds like it's more related to to work, is it?

Pete

I'd love I'd love to claim it is my own… little piece of terminology, but I confess I'm a bit of a avid podcast listener. And there's some other fantastic podcasts around, and that's one of the, one of the terms that's being being used at the moment.

Kate

So you’re living your dream today, Pete, living your dream.

Pete

I am living my dream.

Kerry

So Pete, how do we know when we can retire? Like, how do we find that magic number?

Kate

Great question.

Pete

Great question. Yeah, exactly. And that number is going to be different for everyone. So there's no one magic number different for everyone. So some people love their jobs, and will stay and keep doing that for as long as they can.

Kerry

That's us. Because, you know, we know our boss is watching so yeah.

Pete

I guess I better say the same thing. But they do. It's, which is a great thing if you enjoy you enjoy your job, you want to keep doing for as long as possible and get paid for it. Why not?

And people keep doing that in that situation until they feel that the time is right to move to something else or move to live after work. But we have to remember that the for many people out there who are in physical roles, they may need to retire earlier and the body may be telling them, hey, it's time. They need to plan for an earlier retirement than some others.

So once you have an idea of when your life after work will start, you can then go through and perhaps work out how long it may last.

Pete

So, you know, many might have 20 to 30 years in a life after work. It's a long time.

Kerry

A long time to keep you money lasting that long, isn't it?

Pete

Quite right.

Kate

How do I start to get a sense of how much money I'm actually going to need when I retire?

Pete

Okay. Well, firstly, you've… you've probably got to understand what you want to do, what your lifestyle is going to be like in your life after work. Because let's be honest, you've got to pay for it. Okay. So the first thing I would suggest, and the first thing I'd love you to once again give me your thoughts on is what are your work day day dreams?

So, you know, think about Wednesday afternoon. You've got, you've got a couple of maybe a paper to write, maybe some phone calls to make, maybe some tasks to do that might not be at the top of the list of things that you want to do. And you, as we do, we sometimes drift off and think about other things we'd rather be doing somewhere else and and doing that thing that we, we might daydream about doing.

So what are those things for you? Pickleball?

Kerry

Definitely pickleball. Yeah. You know, I'm mad into pickleball. So that is where I would, I would start. I don't think I can earn money from pickleball, so I'll have to try and see how I downshift to accommodate for that I guess.

Pete

Put ‘yet’ after that, Kerri, who is, you know, who knows, it might be an Olympic sport. You guys got plenty of time for it to qualify. What about you, Kate?

Kate

I wish this wasn't my response, but it is. It's the first thing that came to mind. I would just love chat, drink coffee by myself. For like, weeks on end if I could and just have time to myself. Just because life is really hectic at the moment, and one of the things I love the most is just reading and having coffee. It's pretty simple for me. It's usually alone time when I'm in my day dreaming at work. It’s definitely not pickleball.

Pete

And that tells us that, you know it's going to be different for everybody, right? So very, very rare that it's going to be same for for two people in a row.

So, you know, the next thing I guess I'd suggest is write these things down, start your: life-after-work list, so, you know, I'm a little bit ahead of you guys. You probably don't believe that, but it's true. A little bit closer to retirement.

Kate

We don’t believe it.

Pete

Thank you, I love you. Thank you very much. But, you know, imagine a list of things that you'll fill your life with after your full time working careers, if you start that list now.

Kerry

And that's really interesting, cause I remember when my dad, you know, started retiring and, you know, he he left his job thinking he'd be able to get another one. And that didn't happen so quick. And I guess then he had to transition pretty quickly. But you know, he was doing things like volunteering to try and fill that gap of work that he had at the time.

He was trying to do social clubs to try and, you know, meet people and network and do things like that. So, there's different things that you can start thinking about what you might be doing. I guess, yeah. Looking to perhaps what your parents did or what other, you know, friends, you know, thinking that they might like to do it. It's all different for everyone.

Pete

It is all different for everybody. I've got a great role model for a time in my life. My father in law, he's been a volunteer back in Adelaide, at one of the museums in Adelaide for over 20 years. And he loves it. Absolutely loves it. And it really feels his cub. Yeah. You know, he really gets a buzz out of it and has been has been great.

So you know it's it is different for everybody. Volunteering might be your bag. It might not be. And that's fine too. But you're alone time just like you said Kate. It's all fine. But it's really good to start to visualise these things. Let's let's bring them into the real world by writing them down. So if you think about your fridge, front of your fridge, put it, you've got your shopping list on there. You might have bills stuck there. Hopefully not. But put your life after work list on there and start filling it.

Kerry

You might have grandkids by then, Kate.

Kate

Maybe. Maybe, Kerry.

Kerry

Is that scary to think about?

Kate

Yes, yes it is.

Pete

So it's great that both of you have started to think about what you want to do. Now it's, it's probably time to start thinking about of where the income is going to come from. So you've got to figure that out.

So that'll really help you have a clear, a clearer understanding, I suppose, of how you're going to fund this lifestyle. Okay. And I understand we've got another session, retirement income session, which we'll talk more about that in detail. So, yeah, stay tuned for that one.

Kerry

Yeah. Excellent.

Pete

So one of one last thing I'd like you to consider when you're preparing for, when you're thinking about preparing for life after work is to how your lifestyle might change during that period of life after work. So the things that we we might experience in our, you know, late 50s, 60s, maybe early to mid 70s, they’re perhaps going to be a little bit different from what we experience and what life looks like in our late 70s, 80s and beyond.

You know, things like travel, sport and hobbies. You know, it may they may not, but they may become a little bit more challenging as time goes on. So it's really, it's really important to understand sort of what our spending patterns might be when our lifestyle changes further on down the track. Whether we're spending as much, you know, in those later years as we did in the early years of our retirement. So, you know, giving a bit of bit of thought to that as well is really important.

Kerry

And what we do might change as well. Like, hey, your kids might be grown up, you might have grandbabies by that stage. You could be, you know, your life could look a little bit different to what it does now in terms of how you spending your time and what you're spending money on.

Kate

I certainly hope so. I think that, yes, I it's it's interesting actually, when you were talking about that, it's easy to forget when we getting older that things do start to change and the things that we're doing today are not the same things that we necessarily carry forward. And what we value spending time on actually changes as well.

And so that was really interesting for me, the way you said that then around thinking through that part of retirement, which is what you value and where you want to spend time, also should be considered when thinking about what income and budget you needed, rather than just the things.

Kate

We went out and asked everyday Aussies what they knew about retirement.

Sinem

Have you thought about retirement?

Person 1

No.

Person 2

I think about that a lot. What am I going to do when I'm done... Working.

Person 3

I actually haven't thought about it. I just I don't know how the whole process works.

Person 4

I think maybe we’re kind of young.

Sinem

When would you like to stop working? Like when are you like, I'm done, I want to retire.

Person 2

Yesterday.

Person 5

Ideally, probably around my 50s, 40s?

Person 6

I want to be able to state when I want to retire. As long as I'm capable and I'm doing my job, and I'm still getting my job satisfaction and keeping my sense of self.

Kerry

Now I think we're at the second stage that we spoke about it and introduced.

So the second step here is all about figuring out your budget and spending. And like we might have 20 or 30 years once we’re retired that we need our money to last for so long. How do we approach that Pete? Give me some tips.

Pete

So one of the tips I might start with is, is getting your head around your spending habits now, okay. And have a, have a reasonable focus on that for, you know, the next fair few years so that you've, you're really thinking about these things and how it's how it looks like now and how it might change, you know. Then think about how how you spending patterns might change in life after work. You know, what what what are you going to do differently? How are you going to spend differently? And consider that you're going to have a lot more, spare time on your hands. You’re going to have a lot of spare time on your hands.

Kerry

Think of all the coffees you'll be paying for with those, all those hours, Kate.

Kate

Yes and imagine how many streaming services might be available, then as well?

Pete

Quite right. And then what we’re paying for coffee now, and think of what it will be in the future. So it's not oh yes we have to from double that. So that's interesting to think of.

So you know, one thing to one thing to think about is in our full time, you know, working life, we're often busy and time poor. Okay. And our purchasing patterns sometimes reflect that time-poor, convenience orientated purchases. Right. So in our life after work, we're going to, we potentially will have more time for shop around to look for better deals.

Because we'll have that time to go and explore different channels and goodness, who knows what's going to be available for us to shop? What platforms and what avenues that will be available to us to shop, shop through, in, in the next few years coming.

So it might be about a morning coffee. It might be a favourite place to go for coffee. It might be not that cheap. But, you know, there's options. And putting fuel in the car, you know, we might go to the very corner petrol station, which might not be the cheapest around, but we'll have that a little bit more time and might be things like, you know, minor home maintenance, things that we, you know, perhaps didn't have time to do or we might have paid someone to do in our working life. We might go and have a crack at it ourselves with a little bit of YouTube research, which I must be, I must admit I've been guilty of in the past. So gets you through. So it's all about that time at the time. And then, you know, breaking down where your income will come from. So you've got to consider this, you know, the money from your super. And you, may you may or may not have, dividends from shares, or you may also have income from a rental property. So you might be fortunate enough to have those things as well.

The next thing, I suppose, once you've got a really good handle on what your income is and what it might be in the future, and what your spending is today and what it might be in the future. Is to then, the next question is, am I going to have enough? Okay. Am I going to have enough? And fortunately Rest have calculators that, that our members and actually anyone in the general public can use to start to work out these things. And we, we strongly encourage for people just to jump onto our website, rest.com.au. If you if you've ever been to our website, we've got a few choices across the top. Go to the tools advice tab and in there there's the calculators and get in there, pop in some numbers. Give it a red hot go as they say. You might not get it right the first time and you might want to redo it.

Go your hardest. But it'll start to paint a picture of what your, what your income and spending and how long it's going to last.

Kerry

Awesome. And we'll pop those in the show notes as well. So, you can access them there too.

Kate

So we've spoken about visualising. So our daydreams. We've spoken about budgets and ways to approach those with our spending now, and our spending in the future, our income now, income in the future. Where would the best place be if one of our viewers or listeners is ready to start today?

Pete

So a great place to start, Kate, is, is for our members, to consider some phone based advice, is just having a phone conversation.

Kerry

The big advice word.

Pete

The big advice word, which, you know a lot, a lot of people build up to being quite an intimidating thing. And it's, I guess it's a bit of that fear of the unknown, isn't it? You know, if you don't know if you're changing doctors or you're, you're changing another professional service and you don't know the person, then and there's always going to be a little trepidation there.

But, I can vouch they are all human beings, and very warm ones indeed. In our in our advice team, in our specialist team. But, you know, consider having a phone-based conversation with those people. So our Rest members can access, our Rest specialists at no extra cost. And if there is a need, then they can put the members in touch with one of our financial advisers who, will explain if there are any costs. They will explain them in full prior to any work being done. So that's really important for for our viewers and members to understand.

Kate

It is such a valuable service. It really is. And, and I think if our viewers even just go through the budgetary exercise and their spending, they will find that that conversation would be transformative for them anyway. It will be a great conversation just based off the work that they do.

Pete

Yep

Kerry

And the fact that the phone, the speaking with a specialist, over the phone for our members, that's a fantastic place to start, right?

Pete

I know right? Yes. It really is. You do it in the comfort of your own home, in the quiet, peace and quiet. No distractions, you know, grab a notebook just to write down some notes. And you can to do it at your own pace.

Kate

And they are a wonderful, wonderful bunch of people as well.

Kerry

And I think there's actually a booking form on the website so that we can pop in the, in the show notes as well, so you can actually book a time that suits you, online as well.

Pete

Absolutely. It's really easy to use.

Kerry

Yeah. Great.

So we've just gone through step one, which is planning and preparing, step two, which is understanding how your spending habits impact your plan. So now we're going to move into step three, which is all about smart tips on how you can get ahead and boost your balance.

What do we need to think about or what can we do to start doing that.

Pete

I guess the first thing I'd say, Kerry, is it's never too late, okay? It's never too late to do something and take some action. So there's always something our viewers can do.

You know, it's no longer that it's a case of, you know, work, work, work and then stop. Right. It's everything's changing these days. And that concept that we spoke of before in downshifting, you know, that's you'll probably hear a lot more of that word in the future by, people a lot smarter than I am.

You know, you may go from full time work. You might then transition to maybe part time or casual work before you, you finally get to full time life after work. Or you may go from full time work to maybe full time retirement, full time life after work. But then after a period of time, you may decide. I might just slip back into the workforce. All those things can work for different people,

Kerry

And I feel like Pete, there's, I guess, the trend that comes up of, well, it's not even a trend. I think we all think about it like, I wish I'd done something sooner. Yet at the same time, we still haven't done anything, so, like, what can we do?

Kate

And then we don't because we're scared that we haven't done enough

Kerry

I know, then it's like, do we..

Kate

I don’t want to know

Pete

So let me ask you this question. What's… what's stopping you take a step now and, and filling out that list?

Kerry

Isn't that like, that is such a great question because even working in super, I know I need to do it. Like I know it needs to be done and I still, still don't sit down and do it. It's almost like you need to put in your calendar and go, right on Friday afternoon, I'm just going to have a glass of wine and do that.

Pete

You know I'm going to ring you both next week and see if you've done it, right?

But it's things like that. It's asking you the hard questions and, you know, give yourself a good talking to and say, well, what's stopping me? What's stopping me starting the list? What's stopping me starting a spending plan and having a look at my bank statements for, you know, these days you can download your bank statements off of the, off of an app or from the, the, financial institution website.

And, you know, let let the… our flash computers help us work all that sort of stuff out. So there's lots of tools available to us to be able to look at that sort of stuff. And then, you know, the next question I'm going to ask you both is what's to stop you having a 30 minute conversation with one of our fantastic financial advisers, even now in your late 20s and early 30s?

Kerry

It's really it's, I guess, just taking some ownership and accountability. Like, no one's going to do it for me.

Pete

No one's going to do it for you. Kerry.

Kerry

So it isn't like, as you say, it's just not always a linear journey of work work work, stop and retire like this. You know, different courses that people take in different ways that

Pete

Exactly right. Exactly right. Kerry. And one of the things that people might consider, as I get closer to this transition period, is a thing called a transition to retirement strategy.

Kerry

Ooh I like the idea of this.

Pete

I know, right? So this is actually, you know, it's a plan. It's but remember I said before, hope is not a plan. And so it really ticks all the boxes for me. And that is, you know, a transition to a retirement strategy.

Kerry

Yeah. Great. And yeah, and the dropping down work or changing hours or changing your lifestyle, you know, there's all different ways that you can do it. So speaking to a specialist about it really helps.

Kerry (cont’d)

And what about once I've retired, Pete. Like what, what happens then like once you, you make that decision to retire? Is there anything I can do once I've retired, you know, returning to work or, how does that work?

Pete

Absolutely. Yeah. So, you know, the world's your oyster. You can have a rest. You know, you you might find that your first three or 6 or 12 months of of life after work, it might be 100 miles an hour again, you might replace your work routine with another routine. And you might keep busy that way.

Other for other people, it might be a nice long rest, and they do virtually nothing. And they, they avoid the clock on the wall and they avoid the wristwatch, and they avoid the diary. And they just do things perfectly as they might do. So, you know, once again, horses for courses, and whatever suits you, suits you.

But yes, you may decide after a period of time that that work is calling. Or you might have identified a little side gig, that you thought about during your working life, and it's time to have a crack at that. So, you know, there are plenty things you can do.

You don't, you know, the old the old concept of you have to stay retired. And you get the tattoo that never leaves you that. Yes, I'm retired and that's just not in the vocabulary.

Kate

There's options.

Pete

There's options. Exactly right.

Kate

So my mother in law was a teacher for 30 years, and now in her late 70s, she's running all the ethics classes at her grandkids schools.

Kerry

Isn’t that great?

Kate

Yeah, it's so great. So she goes on a Tuesday morning and a Wednesday morning and, teaches ethics. And it's wonderful. She's part of that ethics community. The kids get to spend time with her. They get to really show off in class, you know, and have their nan at the school. And she just loves it. It's a great connection, back in, and gives her a lot of joy. So there are lots of options.

Kerry

Yeah. Great.

Pete

Social connection is so important. You know, we we are human beings. We are, we are born of a connection between two people, obviously a relationship. So, the research shows that connection is so important to maintain and nurture. So. Yeah. So that's a great, great story.

Kerry

We have covered off a lot. We have, but you know what? We haven't even really got to the age pension. And, you know, that's probably an episode in itself. So, Pete, maybe we can ask you back, for another episode on the age pension.

Pete

I'd love to, that'd be great.

Kate

Pete, I really enjoyed today's session. And also thank you for being here from Adelaide. It's wonderful to have you here. So thank you. I just want to say thanks for coming along today and joining us and unpacking some of these big issues with retirement.

Pete

It's my pleasure. Thanks very much.

Kerry

And if you enjoyed today's episode, be sure to like, follow and subscribe. Share it with your friends. And for more information, we'll include all of the links in the bottom of the description here or the show notes.

And that is super simple.

Ange

Welcome to Super Simple Chats. Rest's very own podcast. We will be speaking to industry experts about all things super. Trying to make it understandable and relatable for everyday Aussies. After all, it's one of the biggest assets you'll ever have.

We're recording this podcast on Gadigal land. We pay our respects to elders past and present.

Any advice you hear on this podcast is general in nature and doesn't take into account your financial situation, needs or objectives. Issued by Retail Employees Superannuation PTY LTD. Before deciding to join or stay, consider the relevant PDS and TMD at rest.com.au/pds.

Kerry

So it feels like there's a misconception around what retirement looks like for many people. Either people are thinking that they'll be traveling around either Australia or the world. Or on the other hand, that will be on the government age pension. The reality is it could be a combination of both. And there's anywhere in between that spectrum that members could land.

Kate

And it's complicated. It's, it's complicated to understand the different types of pension when you're preparing for what your income might be in retirement. So we're lucky today because we're going to unpack some of those income sources, and also understand the age pension and all of the ins and outs of it with our resident Rest expert, Pete. Welcome, Pete.

Pete

Thanks very much. Glad to be here. Hi.

Kate

Let's start with the basics. Can you help me understand? What is the age pension and what are the different types of pension?

Pete

Absolutely, absolutely. The government age pension is an income support payment, that is paid by the federal government to support, a basic living standard for all Australians as they get into their older years. There are eligibility requirements. So you have to be 67 years or older to qualify. And there are some residency rules as well, that you have to satisfy. So it's paid fortnightly into a bank account of your choice. And the amount differs based on whether you're a single or a couple. And the amount is also adjusted twice a year to account for inflation or that, you know, the cost of living increases.

Kate

Do I immediately get the full amount, or does it depend on other parts or aspects of my life and my circumstances?

Pete

And that's a really important question, you know, how much do I get out of that? It does fluctuate due to things like your income levels, your assets that you hold, or a change in your circumstances in those two areas. So it's good to be aware of that as well.

Kate

Is a house included in assets?

Pete

The family home is not included in that that test? No.

Kerry

So because we're here doing a superannuation podcast, there is the government age pension. But there's also, a pension account through Rest as well. So can you tell us a bit about that and the differences between those Pete?

Pete

Oh, yeah. Absolutely. So around, only around half of our members know that what an account or Rest account-based pension is, okay, which is quite a bit. It's a different type of super account, if you like, which allows members to receive an income stream so paid fortnightly or monthly or quarterly. However, it suits them best.

Generally, if you’ve retired, you can start a Rest account-based pension from 60 years onwards, and start to receive an income stream from that Rest account-based pension, whereas the government age pension will only cut in if you're eligible at 67. You can probably see that Rest account-based pension, is going to be probably one of the primary sources of income from 60 to 67.

Kerry

Yeah. Interesting. And so it would be fair to say that Rest’s pension account is what you use in retirement to draw down on, and, as opposed to a super account, which is where you're adding money into.

Pete

Yes, yeah. We've been we've all been adding to our super account for, you know, all of our careers, for most of our careers, some of us are a little bit older, probably for some of us younger, watching us today.

Kerry

We’re the younger ones.

Pete

Exactly right, by a long way as well. Isn't that right?

For most people watching, it will be all of their careers that they've been contributing to super, which they haven't been able to access. And this is the big difference is that's an accumulation fund while we're working. And then as we transition through retirement to our life after work, we could look at using another account, which will probably sit side by side with this super account. And that's a Rest account-based pension. Yeah. So the terminology is really important. There's a lot of jargon there. I'm really sorry for that. But that's that's what they're called. An income stream.

Kate

Yes, you can see why it gets complicated.

Pete

Absolutely. Yes.

Kate

This might be an obvious question, Pete, but when you say income, an income stream, do I think about that like a salary I’m being paid now? Like it sort of operates in the same way, it comes through on a fortnight or a month, that's the same principle, salary?

Pete

Yeah, that's a great question because it is the, no questions are silly questions. And that's really important for all of us to understand, you know, when we when we try to understand this whole super and pension thing, it's better to ask and know than not. But you're absolutely on the money. Yeah. It's just like a different type of salary.

Kerry

And we've actually done a session, haven't we.

Pete

We have we have yeah. Yeah. Exactly.

Kerry

So shameless plug there is some, link in the show notes, that you can see the previous sessions that we've done on that as well.

Kate

Kerry our residential promoter. (laughter)

Kerry

I do what I can do, Kate.

So it's sort of follows on from my question before, in relation to the income component, how do payments work, in the Rest superannuation pension account and the government age pension. How do they work together?

Pete

Okay. So generally people might start accessing a Rest account-based pension and get payments paid into their bank account of choice, from whenever they start that from age 60 onwards. Or they might start out at 62 or 64. It's, it's going to be different for everybody. And once they find out their, what they're eligible for under the government age pension, assuming it's more than a dollar, I'm sure it will be for many, many of our viewers, that that income could start coming through on a fortnightly basis.

So then you're going to have two sources of income. There's going to be a payment coming from your Rest account-based pension into a bank account of your choice, and there'll be income coming from a government age pension, maybe even even into the same bank account. So you might have two revenue streams from 67 onwards

Kate

Working side by side,

Pete

Working side by side.

Kerry

And it sounds like the government age, there's a really strict age limit when you can't access it before that, that age, but with your own Rest pension account, there's some flexibility on when you can access that. Is that fair to say?

Pete

Oh, there's there's still a, an eligibility for the Rest account based pension. Under the, under the preservation rules that are in effect now under the Superannuation Act, one is at 60 years of age onwards you can access your super under a Rest account based pension.

Okay. Lots of jargon once again sorry viewers. But yeah, we have to call them the accounts, what they're called. Yeah. So I guess, going going further on to that, that eligibility thing it's really good at in practice for everyone to sort of review their income and expenditure, every 6 to 12 months, because once you qualify for your age pension at 67, your circumstances may change.

You know, your income may increase or it may drop and your assets may increase or they may drop, which will change your eligibility for the government age pension. So you don't want to miss out on any income, any benefits from our, our friends in the federal government. So it's good to review those things every 6 to 12 months just to make sure that you are getting exactly the benefits you're entitled to.

Kerry

I find that really interesting because it's not like just as soon as you hit 67, you're, that's it, that's what you're on for, the rest of… you can keep assessing that, especially perhaps as your other assets decline or things like that.

Pete

In that sense, exactly right, Kerry.

Kerry

I learned something, I learned something new every day. Awesome.

Pete

And look, there's another point that you don't forget that once we all turn 65, you know, we've got that access to our super unencumbered. Best to speak to someone who can give you a little bit of sound advice, before you make any, any big decisions there. So 65 you might have some needs or wants that you want to finance and after 65 you can do that with lump sum withdrawals.

Kate

I think to your point earlier though, Kerry, is that it doesn't just stop at 67. That there's all this active planning, that and adjusting and reviewing that still needs to take place post that age as well.

So that that's really interesting. Yeah.

Pete

Yeah. Because we manage your finances all the way through, don’t we? And you’re quite right, we really… it doesn't stop at 67. You know there's no longer, okay, well that's all I'm going to get for the rest of my life. It's important to keep an eye on, your whole financial situation and keep discussing it with those people that can advise you, those trusted sources, whether that be family, friends, or maybe your, friendly Rest financial adviser.

Kerry

So Pete, are they tools or calculators or things like that that can help?

Pete

I am really glad you asked that question, Kerry. There just happens to be, some tools and calculators on rest.com.au our website at Rest. So if you look along the top of the, the website page, there's, tools and advice. And if you go in there, there is the calculators page. So there is a range of calculators: budget calculator, there's a retirement calculator which you can forecast what you balance might be at certain ages. So we really encourage everyone to just go in there and have a play, okay, have a play with them. And get to know how they work. If you really want to put some fuzzy numbers in there, you don't have to put the exact numbers in that reflect your current financial situation. If you're, if you’re some way concerned about that, pop them in there and just mess around with them. It's really a great way to get more information. It’s also going to bring some more questions into your mind as to maybe some other things that you want to know.

And guess what? We've got our Rest specialists and our Rest financial advisers that can help answer those questions for you. So we really encourage people, you know, have a start by playing with those calculators.

Kate

And can anyone explore those calculators, Pete?

Pete

Yeah, absolutely. They're not they're not limited to our fabulous Rest members. They're available to the general public. So yes jump on in.

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Kate (V/O)

We went out and asked everyday Australians what they knew about the government age pension.

Sinem

Do you think you'll go straight from working to not working and just retire completely all at once? Or do you think it'll be like a slow thing that you do?

Person 1

I don't know.

Person 2

I'm not really sure if I would get enough from retirement itself. So I think it's important there to have like, something behind.

Person 3

I definitely think I would probably go the, the lead up into it like do part time or do consultant work at that point.

Person 4

When my vision decided to do a bit of a downward turn, so I had to go on to, you know, sort of part like pension and part super, which wasn't what was in my plan. And then everyone assumes, oh well, that’s it, so how are you enjoying your retirement? And I'm going, well, I'm looking forward to going back to do a bit of work.

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Kerry

Just on the government age pension, though Pete. Applying for it. 67. Do we go, like when do we apply for this and how does that work? Because I think there's some other little nuances around that that we should all be aware of.

Pete

There absolutely are. So you can apply, anyone can apply for the government age pension 13 weeks before their 67th birthday. So ideally we'd all have a diary note on either and our phones or diaries, whatever it might be that rings a bell or… that pops off a siren.

Kerry

Pop it in your diaries, people.

Pete

That's it. Yeah, pop it in your diaries, don't forget, that 13 weeks out, that's when you start the application process. It's not going to happen overnight, but it will happen. So to use our fabulous, that fabulous quote

So really, really important start that process 13 weeks before your 67th birthday to make sure that you are fully set up and the payments can start, or the payments will start as soon as possible after your 67th birthday, because, you know, let's let's be honest, we don't want to miss out on a dollar of benefits that we're entitled to. So you don't want to leave it all 67 and three months or 67 and a half, or later to apply for the government age pension, because the payments won't be paid retrospectively. The… you know, understandably, the government's not going to go, oh look, we know we you didn't apply and for six months, we'll pay them to you anyway.

Kerry

It doesn't work like that, no.

Pete

That’s not quite how it works. And I understand why that's fair enough. So that's why we really encourage people to start that process 13 weeks before.

Kerry

So Pete, we've covered off what the government pension is, and spoken a bit about how that compares in contrast to the Rest account-based pension. And I just imagine people who are nearing the end of their working career or thinking about, you know, retiring, wanting to do that. They’re occupied with so many other things. Are they things that people commonly miss when they're at that stage and about to retire? And what are they?

Pete

There are two things, Kerry and that is, so, missing out on payments due to a late or incorrect application and then forgetting that your eligibility for the age… government age pension can change over time, and missing out, perhaps missing out on some entitlements as you progressed through retirement.

Kate

Pete, I find forms and that type of admin really difficult. Like I always miss things or always get the phone call to say it's incomplete. Can you help me understand how I could ensure that that goes as smooth as possible, so I don't miss any payments?

Pete

Okay, so, I'm sorry, I keep saying this. It that's where this 13 weeks is really important. Okay. So that's, you know, it's three months effectively for us to get that right.

And you're right. You know we we, we don't understand questions sometimes on on on paper forms.

Kerry

And Kate you've got 13 weeks to work out the questions.

Kate

Yes.

Pete

It's three months to get it right. Okay. And not all of us will get it right the first time. Most of us will probably get it wrong the first time we have a crack at it. And that's okay. We're only human. So applications can take time to get processed. So if you get the application wrong, for whatever reason, you'll have an ample time to reapply.

As I said before, really important to remember that the government doesn't back pay late communications. So get it all sorted out in those 13 weeks. And there are paid services that that can guide you through the whole application process. So really good idea to, you know, get… do your research and find out where you can get that support.

Kerry

Right. And I guess the other point you mentioned was around the eligibility. Your eligibility could change, as you're going through this, can you just touch on that a little bit more Pete?

Pete

Yep. So your eligibility for the government age pension can go up and it can go down okay. So that's really important as well. So keep in mind you can reapply throughout your retirement when your circumstances change. Okay. As you spend your retirement savings and things change, your assets change in value. The value of the amount of the government age pension can change through that period. So it's a bit of a dynamic thing. It's a bit of a live process, as you go through.

Kerry

There might be certain things that just change, what you've got in the bank.

Pete

Quite right. And there's going to be all sorts of things, that can, can affect that, your financial circumstances. So, you know, benefits coming in, lump sums coming in for whatever reason, if we're fortunate enough, and also changes to the amount coming in and the level of our savings going down. So, you know, these, these things, our finances throughout a working life, they, they ebb and flow, don't they? And they change so that they'll continue to do so and that will all contribute to our eligibility for certain amounts under the government age pension.

Kerry

That’s awesome. I hadn't really thought about those changes. So, yeah, that's really, really interesting. Thanks, Pete

Kate

Quite often, Pete, when our members call our wonderful advice team. Some of the concerns have been centered around the government age pension and, in the context of cost of living and all of those pressures we're facing into, there's a lot of fear around, would I really struggle if I was on the government age pension only? Can you shed any light on that?

Pete

Well, it depends on a lot of things. It's really hard to, to, to make a… one comment on that, but it depends on a lot of things. You know, it does the individual are in their own home or are they still paying it off or are they renting perhaps, you know, are they single are they a couple? And what's their lifestyle like? You know, we do. We have a, high lifestyle, perhaps a, a more medium or whatever lifestyle that might be. So it's really important to remember that the purpose of the government age pension is to be a financial safety net for older Australians in retirement.

So it supplements, it's designed to supplement their income in retirement. So in in collaboration I suppose with their super. So it's not designed to be the sole income. It may be for some. So that's really important that, everybody, as many people as possible at least speak to a financial adviser. And get some good advice for their own individual situation. It's never too late to ask for that help. And it's really something that everybody hopefully can access, especially our Rest members with our fantastic advice team.

Kerry

And we'll put the details of our specialists, in the show notes as well. So if you're wanting to know the first point of contact, or where you might start. Then you can go there as well.

One of the other things that our, our members, when they call us and we're talking to them often comes up is, is the government age pension always going to be there. Or you know, we have changing governments. There's changing policies. Like there's a bit of nervousness around will there always be a government pension? What's your thoughts on that?

Pete

We can't predict with 100% that the, the government age pension is going to be here forever. But it's really, really important for everyone to understand that the, the government age pension is one of the three pillars of the Australian retirement system.

Okay, there's the government age pension is one, the superannuation is the second, and is our savings and assets is the third. And the government is very much, understands how important the government age pension is as one of those three pillars providing financial support to Australians, to older Australians in their retirement.

Kerry

Super hasn't always been compulsory to be paid by employees, has it? So there's going to be people out there who have different levels of superannuation balances. And so there's probably going to be, you know, a need to for governments to look to see and make sure that, you know, members and Australians can, you know, live in retirement based on what they've got in their savings and the other pillars that you mentioned to support them.

So, but we are super lucky in this country to have, compulsory super. But it hasn't always been there, which means not everyone will have the super and may need to rely on a government pension.

Pete

Yep. Quite right. We are very fortunate to have this system. And, you know, there are times where there are concerns with an aging population that in the future we may not have the the revenue to fund, to adequately fund the government age pension.

But what the government does is every few years it commissions a report called the Intergenerational Report. Okay. And that seeks to do a forecast of the Australian economy 40 years in the future. All right.

Kerry

I's amazing to think that far out, isn't it.

Pete

I know, right? I mean the brains to do that like, just incredible. So the 2023 report shows, that there is increasing super about, increasing super balances in the Australian superannuation system. And that reduces the reliance on the age pension over time. So from that, there is no intent, to abolish this vital part of our system.

Kerry

Good. So I think… should still be there by the time I retire.

Pete

I think so, I think we could be, I think we can be comfortable in saying that, yes.

Kate

Yes. It's good to know that it's part of a three part system, or the three part pillars, That's really comforting to know that it's just not one approach and that we can leverage other parts of the system to make sure we've got the retirement outcomes that we’re after.

So, Pete, we've covered a lot, and I really feel like it's given some clarity around the difference in government age pension and the Rest account pension basics

Kerry

Agree, it's been great.

Kate

But if you could summarise for our listeners, what are the three takeaways from today that you'd like or suggest for them to look at.

Pete

Alright, I would love our viewers today to get a really solid view of their finances. Doesn't matter how far out you are from this period of transitioning from full time work into, into retirement, get that really crystal clear picture of your finances. So all your incomings and all your outgoings now, and then start thinking about what that's going to look like into the future. So that's one. The second one is set the date.

Kerry

Yes, so important.

Pete

So 13 weeks before your 67th. And that might sound silly for some people that it's, oh, it's so far away. I'm only 40.

Kerry

I'm going to say 40. (Pete 39 and a half?) Yep let’s go with that.

Pete

Is that right? Yeah. Okay. Yeah. But set that date because it is really one you don't want to miss. You want to make sure that you tick that little box.

Kerry

Well, especially if you don't get the back payment.

Pete

Don't you get paid back. Yeah. And that could be thousands. You know, if you, if you're entitled and ends up being, you know, $800 a fortnight or whatever that number is.

You know, if that lasts for three months, that's a lot of money that you haven't received. And I'm sure we'd all like that in our pockets. So, set that date 13 weeks before your 67th birthday.

And then the final one and the big one is please look to seek advice, you know, speak to our Rest specialists, speak to our Rest financial advisers, and get all the tips and tricks and the benefits of their wisdom and their training and, which they all, they all have to go through, but also to avoid the potholes as well. You know, we don't want to end up walking along our, our financial pathway in step in a pothole, a financial pothole, if you like, in twist our ankle, if you think about that in, you know, in a financial sense. They can be very very very helpful.

Kerry

Excellent.

Kate

It would also be worth, I think we covered off a lot of retirement planning and income sources and understanding and visualizing what your retirement is going to be in another one of our episodes. So we'll make sure that we put that below, because I do think that that will help with your first take out, is getting a real sense of your financial picture. That episode would be really valuable to get our viewers on the right track to do that. It's got some great actions inside of it.

Kerry

That will be in the show notes for everyone, as you said.

So, Pete, thanks so much for joining us today. I myself have learned heaps and I work in super and this conversation has been so valuable to me. So I hope it's been valuable, to everyone else as well. If you enjoyed today's episode, be sure to like, follow and subscribe! And for more information on the things we've spoken about, I said a number of times, but you will find them in the show notes and some links below.

And that is super simple.

Ange

Welcome to Super Simple Chats. Rest's very own podcast. We will be speaking to industry experts about all things super. Trying to make it understandable and relatable for everyday Aussies. After all, it's one of the biggest assets you'll ever have.

We're recording this podcast on Gadigal land. We pay our respects to elders past and present.

Any advice you hear on this podcast is general in nature and doesn't take into account your financial situation, needs or objectives. Issued by Retail Employees Superannuation PTY LTD. Before deciding to join or stay, consider the relevant FSG, PDS and TMD at rest.com.au/pds.

Ange

So when we think about super, we usually think about one thing which is retirement. But super plays a pretty important, although sometimes hidden role in relationships, especially when we're talking about things like marriage, shared finances, caring for family and, you know, if things go a little bit pear shaped, divorce.

So joining me today is Sinem, who's going to be asking all the hard questions about super and relationships to our expert Lisa from Rest. Lisa, thank you also for joining us today.

Lisa

Thank you so much for having me today, super excited to be here.

Sinem

Lisa, let's dive in. So there's already so many things to think about when you're a couple, but how exactly does super work when you're in a relationship or in a de facto?

Lisa

So in a relationship, you might start saving together. So we have an account. You might want to buy a house together, raise a family, and that's all an asset that you're building together. And nobody thinks about their super on the side. So like you said, it's... it's important and it's there. But nobody thinks about it.

Ange

So how do we start to get people to think about, you know, talking super when they're dating or when they're in a relationship? Like, how can we spice up super

Sinem

And when to bring it up? It's such an awkward conversation to have.

Ange

I can't say that I ever brought it up with any of my prospective partners.

Sinem

I mean, I have, but I work in super, so it's kind of like...

Ange

We will unpack this a bit later on. So, Lisa, if you know, if you're a couple and you talk to couples all the time, does anyone actually really think about super when they're talking about budgets? And how do we get them thinking about it?

Lisa

So first of all, I got to think about it as in money and nobody does. If I ask you what you earn, you're going to tell me what you earn, but you earn , your income plus super. And then you say, oh yeah, plus super. What is that super? We need to start putting a dollar figure on it and it's your dollar.

you know, we have no problem looking at a savings account, looking at a mortgage and getting the most of it. Yet, we've got these assets sitting here that's part of that income going into. And it's just left. And it's just as important as this mortgage you're going to pay down to live in. Well, you've got a house to live in. What are you going to do to actually make your living costs at retirement? You've had this account that's sitting there and you can grow it. So I think if, if I said to you today, what if I put that super account into your savings account, all of a sudden you'll go, wow, what can I do with this? How can I make this work with me? But because you've got this mindset that it's over there, it's no good.

Ange

Yeah. You know, that's actually a really good point because like, when you're dating and you're finally having the money conversation, you might be looking at things like, oh, well, what's in your bank account versus what's in mine. But actually if someone turned around, it's like, well, I have $100,000 in my super account, well, that's actually kind of sexy. Like that could be quite attractive in a partner.

Sinem

Yeah, that makes it hard though, because super isn't really the first thing that you would bring up. Unless you're like us, who works in the industry, then you kind of bring those conversations up.

Can you give our listeners some conversation starters on how they could maybe approach that?

Lisa

(laughing) Maybe on your first date you can say, "What excites you about super?"

Sinem

What's your job? what's your super balance? What's your risk profile?

Ange

Can you imagine if that was like on (censored) ?

Sinem

As a prompt?

Ange

As one of the prompts? (laughing)

Lisa

I guess the main thing is that first of all, you've got to see it as an asset. And you've got to want to, I guess, grow it. So we have no, no issue knowing it takes us 30 years to pay down a mortgage. Right. You go. Okay. It's going to take 30 years. You're going to pay down this mortgage. And that's great. Soon as you say, you can't touch this super for 30 years, we have this mindset where we ignore it.

So I guess to bring it into people's foresight, you need to first of all, like I said, it's got to be part of your money. So you got to get this is my money.

Sinem

You don't overlook it.

Lisa

And and what can I do with it.

Ange

Now I've got another question for you. So we're sort of moving more into marriage territory now, less so into like dating. And how do you bring it up and how do you make it part of the conversation upfront. But let's say you're in a situation like mine. So I am married, I am about to have my first child. Yes, I... we're going to do the reveal. (stands up to show baby bump) I am pregnant, and my husband and I have very different super balances.

The reason being, even though we both started work at the same age or roughly the same age, I actually took about three years out of the Australian work market to live overseas. So when I came back, my super balance was smashed. It was like nothing left. While he kept working and growing, his super balance. So now we're in a position where we're about to have a family and his balance is much higher than mine I'm the one taking the time off to be with the baby. What do we do about this? Like what is the kind of conversation I should be having with my husband? Cos I'm sure there are other women or men, you're in this situation like I am.

Lisa

So I guess the first thing you need to know, the super in a relationship is an asset. So like everything else, you're accumulating together, super accumulated from the time you together as a as an asset. So it is a joint asset even though it's held separately. If you were to look at it, it's something that's accrued in the time you're together.

, and it's going to vary for everyone. Some are concerned with the balance difference because at the end of the day it's an asset that both of you are going to use. But for couples that are concerned and they do like to keep everything the same, then there are options you can have. Like you said, when you're off work, if one couple earns less than the other, if one's working part time, there are some options you can take to start to balance those differences in the, balances that you have to make it more equal if that's something that's important to you.

Ange

Which, yeah, like I'd like to say it is for me, like, what are some of those options. What does that look like.

Lisa

Yeah. So it's going to be different for everybody. So there are a few different options. You can look at government co-contribution. So that's one way to build your super. Another way is a spouse contribution. And the third one is probably super splitting.

Ange

Whoa. Let's dive into that a little bit more.

Sinem

What is that?

Ange

Yeah. What is super splitting?

Lisa

Nobody seems to know about super splitting. So, super splitting means that you can split any, and I'm going to use some technical terms unfortunately, but I will explain them. Any concessional contribution that goes into your super.

Ange

Is that the before tax, or after tax?

Lisa

It's the before tax.

Ange

Before tax, yep.

Lisa

So the easiest way to explain it is, you know that SG portion, that super guarantee that your employer puts in that nobody seems to know about or care about?

Ange

Yep. The one we all forget about until we see our balance

Lisa

That is a concessional contribution, that a salary sacrifice. And any personal deductible. So when you're thinking about super splitting. Yep. Or even making a spouse contribution or a government co-contribution, it's really important to get advice because there are income caps on the tax effectiveness of each of those contributions. So it's going to differ in your relationship and your income.

Ange

Right, okay.

Lisa

So there's all these options... which is the right one for you? That's when you want to start looking at advice to make sure that, when you make this contribution it's tax effective.

Ange

Okay. And so you mentioned there's a difference between spouse contributions and super splitting. Technically, what is that difference?

Lisa

So the main difference in spouse contributions and the government co-contribution is you actually have to put money into super to get the benefit.

Ange

Okay.

Lisa

So you've got to come from your savings account and put money in for a spouse contribution for your spouse to get a tax offset or for the government co-contribution, you've got to put money in to get the government co-con.

Ange

Okay

Lisa

Now they have income caps to see whether it is actually for you. With spouse splitting, you don't have to put money into super. The money's already gone in from your employer.

Ange

Does that come from my spouse's.. who's paying that, is it my spouse's super?

Lisa

However you want, however you want to split it. So say if.. and I'll just use round figures. So say for example, your partner gets $10,000 worth of his SG payments. It gets taxed because it's a concessional contribution. So 85% of that, you can decide to move to your spouse's super.

Ange

Ross, I hope you heard that. Ross is my husband. (laughing)

Lisa

And it might not be 85% you want to split. You know, you may want to do that. And and you just have to be because you're having a baby. It could just because it's an income different. It could because you want to build together and have the equality.

Sinem

So you could do that at any point, not just when you're on mat leave.

Lisa

Exactly. You can do it whenever you want. And the other contributions you can do whenever you want as well. But they do have income caps. So you got to make sure that those contributions at that stage are relevant to your situation.

Ange

Well I hope my husband is listening in on this one. Because for those of you at home who are listening, you might not know this, but we had a bit of an incident in episode two.

Sinem

What happened?

Ange

You're going to have to listen and find out.

Lisa

There could be other reasons why you want a super split as well, because super is invested. So it's invested in line with your attitude to risk. So you could be someone who likes risk and your partner doesn't. So you might want that, some of that money in an environment where you want to have control of how it's invested, and it could be the other way around where they might like a lot of risk. So there's a few different reasons why you may want to even up the super as well.

Ange

That makes sense, actually.

Sinem

That was a lot of information. I think we'll put some links in the show notes down below.

Ange

Yeah, good idea. For anyone listening at home that wants more info, just pop down there and click the link.

Sinem

So I was really curious to hear from, members about whether they would talk about super with their partners. So we actually went out and asked some everyday Aussies questions to see what they would say.

=======

Sinem

Are you comfortable bringing up finances with your partner?

Person 1

Definitely.

Person 2

Not really.

Sinem

Not really?

Person 2

It's kind of ugly to talk about money.

Person 3

Once you have a partner, you have that shared focus. You need to think about, it's not just you, but with you and your partner.

Person 4

People need to know where they fit into the jigsaw puzzle.

Sinem

How far into your relationship did that topic come up in?

Person 5

I think early stages, actually.

Person 6

When issues started arising I would probably say. You know, and like, so maybe one to two years.

========

Sinem

So let's say you do make it to retirement with your partner. How do you get on the same page with your retirement goals.

Lisa

Your retirement goals... that could be a whole podcast in itself.

Ange

It already is. (laughs) Tune in to episode four. Shameless plug. Maybe it was three. I can't remember now. It doesn't matter. But we have an episode on this so.

Lisa

So I guess it all comes back to what you're saying. The conversation. So what generally happens these days where where we're at and where we are, we super is people are 2 to 3 years out of retirement and they're like, oh, what was that thing people talked about? Super? And then all of a sudden these people in their 60s are starting have a conversation amongst themselves about we're looking at retirement. What do we need to know? What do we need to do?

So then I look at this super balance that they've got and they're like, oh, what can we do? How do we make this work for us, etc..

Super's like everything else that should have been cared for along the way. So when we take out a mortgage, we make sure we're getting the right interest rate. We look at how do we pay it down faster? Do we put $20 or $30 in more? We've got a savings account. How can we make that work for us? Super's the same. It's a product and then it's how you use that. How do you attach your strategies. So along the way, if you add a little bit of money, or you check you're invested correctly, or you be tax savvy along the way as well, which you can, you can use your super to be tax effective and save tax depending on your income along the way as well.

Ange

Well my ears just perked up. We do love a good tax strategy.

Lisa

So you know if we pay 15 cents in the dollar inside super. And then you tax, your marginal tax rate depending on what you earn. I don't want to get into details because it's going to come back again to personal advice.

Ange

That's another episode

Lisa

That's personal advice again. However these are all considerations as you're growing it. We're considering our mortgage every day. What's the bank charging us? What are we doing? How do we get it down. But we've got this asset that, when you hit retirement you can't eat your house. What are you going to eat?

Sinem

Scary

Lisa

So this is what it is. It's about growing these so that your retirement looks exactly the same as what your life is now.

Sinem

So don't leave it until you're about to retire. Start talking about it early on. Get on the same page. So if they want like a countryside retirement, you want a beachside and then adjust.

Lisa

Well, you need to be on the same page. Otherwise I think the next stage, Ange is going into is where you may end up.

So you got to make sure like everything when you're growing in a relationship and you've got children, you're raising them. You've got to grow together. So your goals have to align and you've got to be growing towards them. So I guess if you can have these conversations and like you said, they're not a usual conversation and they're not something we were raised listening to our parents talk about.

But I'm noticing a massive change today in today's society about especially with cost of living, we're careful about what we're doing. We're mindful that not everything may be easy because everything was looking easy. And all of a sudden go to generation that owning a house isn't as easy.

Sinem

That's so different from what you saw your parents being able to do it.

Ange

Absolutely. And retirement is going to look different for our generation compared to our parents generation.

Sinem

I feel like I've got a whole list of questions that I'm going to ask on dates. What are you doing in 30 years?

Lisa

Exactly. And we're living longer. We're living longer. We're taking better care of our health.

Sinem

You've got to stretch it out.

Lisa

So you want to make sure that you can actually do the things you want to do while you can, because I guess 75 these days doesn't look like 75 used to. People are still working, they're still active. So you still got living costs that you want to meet.

Ange

And you're right, like even within the phases of retirement, like when you think about it, if you're retired for like 20 odd 30 odd years, what you're going to be doing in your 60s and 70s is going to look very different to what you're going to be doing in your 80s or 90s. So thinking about even like with your spouse, what those chunks of life look like, is probably another juicy date night conversation. Add that to the list.

Lisa

Exactly, and you don't even know what it costs you to live. If I ask you what it cost you to live, you probably couldn't answer me.

Ange

I do love spreadsheets. I'm not the person to ask...

Lisa

You're the wrong person... because most people are going to their bank and you say, what do you... what do you live on? About 30,000. You know, your net income in your household is about 120,000.

Sinem

Yeah. When you get that from?

Lisa

No, what have we been doing with that? Where did it go. So these are like I guess conscious decisions. And it's not about budgeting and not spending and not enjoying yourself. It's about, you're making conscious decisions about all these other financial goals in your life. Yet you got this bucket here which you could your employees pay into. So it's going in there. So you need to nurture it and make it work for you as well. Yeah.

Ange

So we did touch on this and we're now going to dive a little bit deeper into when things go pear shaped. What does happen when things don't end as well, is really that the question I'm coming to. And I'll give you a little bit of a backstory. My parents have been divorced for, I’d probably say about close to, ten to, somewhere between 10 and 15 years now. I was in my very early 20s, so that's showing my age. And at the time, neither lawyer during the conversations back then, even brought up super in the divorce split conversation. So hindsight, beautiful thing. My mother has now come to a realisation that actually my father had a really healthy super account because he was working for many years, but my mum took about, I think it was close to 6 or 7 years out of the workforce to raise children. So she didn't get super in that time. So they had very different balances.

For people who are in like my mother's situation, hindsight, of course, ten, 15 years ago, what is the right approach and how do we look at super when it does come to divorce and splitting?

Lisa

So I think your mom does fall into that generational gap where super wasn't talked about. Super wasn't for everybody, so it was more so government workers, union workers, police. Then years later, I think it was the 80s or 90s. Super became more mandatory. It came into retail. So there was a whole generation of women out there that had spouses who are gaining super, and they didn't work and they didn't have super. And back when they did get divorced, it wasn't an asset on the table.

Ange

That's interesting. So it has become since?

Lisa

It's changed. It has changed. So now when you get divorced and this is going to be different for everybody because everybody's agreements and their situation's different, but generally assets and your liabilities go on the table and then the solicitor or your mediator will work out what agreement, based on your situation, your children, is an agreement of who gets this and who gets that.

And super will go on the table, and it will also be split.

Sinem

I had no idea.

Ange

Yeah. Look, it's really good to know that, especially if you are in this phase of life where things aren't, you know, as as peachy. It's good to know what your options are, especially if you have been in a situation where maybe you have taken time out of work to do unpaid, caring work. I think it's definitely something you should be raising with your solicitor. If you are in that situation.

Lisa

And it's an asset, and if say your partner's been salary sacrificing and you've been using your money to meet living costs, well there's going to be a different imbalance there. But it's still both your money's worth going towards both goals. So it needs to be sorted out when the split happens. And it stays under the super law. So if they decide, I'm just going to use a round number that, you know, 50,000 of their super now comes to you. It doesn't come to your savings account. It'll go from their super to your super account and it stays within the environment. And then the rules of when you can access it with preservation etc. they all stay the same. So it all happens in the background.

But don't stop there. You've gotten divorced. You've sorted your money out. Let's go back then. Who's your beneficiary?

So you’re at the solicitors you're doing your divorce, you want to get your estate planning lined up as well. So you want to make sure you get your beneficiary in line with who you want to receive this money now.

If you've got minor children, you need to make sure of estate planning too. Because if you've got a 10 and a 12 year old and they're your beneficiary, they receive the money.

Ange

Who's looking after them?

Lisa

Exactly. So it is a little bit of a minefield, as in let's split the assets. But also let's be mindful. And it's probably a whole different podcast on estate planning, which would probably lead into second marriages with super, because that because that's another minefield. But yeah. So it's like you got to look at the estate planning. Speak to a solicitor. It's not something we would guide you on because we're not solicitors, but it's definitely should be there in the back of your mind that, okay, I've got that sorted, now what's my best option, to making sure that my person I want to receive this money does. And I still got control if I pass, on what would happen to that until they are adults.

Sinem

Yeah, wow.

Lisa

But the objective of getting married is not to get divorced. But obviously it does happen. And unfortunately, you know, at the end of the day, we need to make sure we've got our estate planning and everything in line just in case.

Ange

Well, that's some good... GENERAL advice.

Lisa

Exactly.

Ange

So throughout the episode, we have mentioned the word advice a couple of times. And, I guess my question to you is how would you go about booking an advice call, especially if you do have a spouse, like would your partner join you? Like, you know, if I needed to speak to you, would my husband join the call as well? Like what does that look like?

Lisa

So your first option would be go into your Rest account, log in and then there is an advice tab there. And you can book an appointment with an adviser. So probably the first call probably have on your own so you can have a chat, meet the adviser, have a discussion. What are your objectives. What do you want to know about? And then from there we can sort of decide, you know, do we need to speak to your partner as well? Can we do what you want? You know, your needs there, are there other needs that you want? So it's there. There's no additional cost to log on, have an appointment with an adviser and have that first discussion about where you need to go.

Sinem

So if we had that first discussion and then you had to do another call with your partner, do you get charged for each call or is it based on the topics that you're speaking to the advisers about? Are there additional fees to each one?

Lisa

So at Rest we try to be super simple. So we try to make our advice exactly that super simple. So we'll actually scope a lot of our advice needs down to topics to make it easier. Because the average person doesn't know super. It would be like me trying to do your job. You know, I can't do that. So we break it down. A lot of the advice we offer is at no additional cost. If there is going to be an additional cost, we always let you know, upfront and it's not per call, it's not per hour we spend with you. It's per advice need.

So if there was an additional cost for that advice need, however many calls, however many conversations, that would all be encompassed in that one fee. But like I said, a lot of the advice that we offer is that no additional cost. It's part of being a Rest member.

Sinem

So if there is a fee how, do you work out who gets charged that or what the amount might be?

Lisa

Okay, so we have what was is called intra-fund advice. So any advice that's basically contributions or basic contributions, investment choice, insurance, there's no additional cost. Because as a Rest member inside your administration fee we've already taken that into consideration in the fund.

Now the only advice we charge for is, transition to retirement, retirement advice and then couple's contribution, especially if they're not a Rest member. Because that's the advice we deem all members won't need to access. So to make it fair and equitable as a Rest member, we pick up a portion of the fee, and then if, if there has to be an additional fee, the member will pick it up and we invoice you. We invoice you after the advice. It's not, you know, you need to pay us before we speak to you. But like I said, we're very approachable team. We're super simple, we're people too. So we want to, you know, reach out and speak to our members. And if we can assist with advice, taking control of your finances, first of all, makes you feel more powerful.

And secondly, if you learn 1 or 2 things just from that conversation, you're already financially more apt than you were prior. And you don't know what you don't know.

Ange

And so just to clarify, as a team, you guys don't work on a commission structure, is that correct?

Lisa

Exactly. So we're salary based, not commission based. So whether I have 97 conversations and do no advice documents, which is very rare, because most people have a need. To be honest, the majority of the advice we do is at no additional cost because most, nearly everybody you need investment choice advice. Contributions, insurance you know and and we're getting off topic I guess from, from what the podcast is about...

Ange

We can tell you're passionate Lisa

Lisa

But yeah, you know, speak to us. It's like, yeah..

Ange

It's just common sense, guys, speak to an adviser.

Lisa

Well it's not common sense, it's, we're everyday person as well. Now we go to a mortgage broker to get our mortgage right. The same as everyone else. You go to a specialist for something. This is something we know. We want to make our members feel more in control of their finances, understand what they've got, and be able to work together to build their goals with this money that they've got.

Ange

I need to book a call with Lisa, like ASAP.

Sinem

Lisa being an adviser, you must hear from a lot of different people about a lot of different things. What's something that comes up the most for you on your advice calls?

Lisa

So, my team would probably be, oh my gosh this is the most thing. Once you go through and you give advice to somebody and then you tell them the benefits of your recommendation. The first thing they say is, oh my God, I wish I knew this sooner.

Sinem

We've had that come up in the vox pops, actually. People being like, nobody told me that this wasn't something that I need to even think about. So it's so interesting that you get that as well.

Lisa

Yeah. And that's at any age group because your need is constantly changing. But there's always a need and there's probably sometimes a way we can assist with growing your super, saving tax, doing things. So at every stage of your life or members, that's the one thing they say.

Ange

Thank you so much for joining us today, Lisa. I think it's been one of the most fascinating conversations we've had so far on the show, and I cannot wait to take it home and talk to hubby about it now.

Lisa

No, thank you so much for having me. As you can see, I'm quite passionate about super and just, I just want people to embrace not not super, it's their financial asset and you know, just make the most of it. So no, I've really enjoyed being here.

Ange

If you enjoyed today's episode, please make sure to like, follow and subscribe.

Sinem

For any more information, check out the links in the show notes down below.

Ange

And that is…

Ange and Sinem

Super simple.

Ange

Welcome to Super Simple Chats. Rest's very own podcast. We will be speaking to industry experts about all things super. Trying to make it understandable and relatable for everyday Aussies. After all, it's one of the biggest assets you'll ever have.

We're recording this podcast on Gadigal land. We pay our respects to elders past and present.

Any advice you hear on this podcast is general in nature and doesn't take into account your financial situation, needs or objectives. Issued by Retail Employees Superannuation PTY LTD. Before deciding to join or stay, consider the relevant FSG, PDS and TMD at rest.com.au/pds.

Phil

So we've all got our favourite cafe that we go to. I've got a few mates who run cafes, and, you know, you see them run off their feet. You hardly ever see them take a break. Sometimes even on a Sunday. Makes you think that running a business, not just a cafe, but any kind of small business, it's just... full on this, all this stuff to think about. And so you barely have time to think about what's going on with super.

So we're going to do an episode all about running small businesses and super joining me today is Chrissy, my co-host here. And we've got our small business expert, Matt, from Rest. Hey, Matt.

Matt

G'day, how are you going?

Phil

But before we ask you some questions, I got a few questions for you, Chrissy.

Chrissy

Oh okay

Phil

have you thought about running your own business?

Chrissy

Yeah, I think everyone has

Phil

What would your small business be?

Chrissy

A bookstore.

Phil

Got a name for it?

Chrissy

Chrissy's collection.

Phil

It’s got a good ring to it.

What about you, Matt? Have you ever thought about starting a small business?

Matt

Well, I mean, look, I. I would love to, I was born raised a family that's had a small business pretty much since I've been born. I've worked at those small businesses, my wife has a small business as well. So, while I'd love to, I'm probably a little bit busy in the super space, to be honest. But. But I think, you know, I've been working in super for 15 years now, so it's probably a little bit late to sort of turn that corner, but you never know. See what happens in the future.

Chrissy

You might have a career in publishing.

Matt

Yeah. I don't think it would be in books, though.

Phil

No competition for you, Chrissy,

Matt

More likely super or something like that. Oh now podcasts, I'm back for season two. I must have done something right on the first one.

Phil

The fans loved you, they wanted you back

Chrissy

It's got to be pretty good having so many small businesses in the family, and who also have a super specialist on tap.

Matt

You'd think so? But, yeah, they don't ask for too much advice.

Chrissy

Yet.

Matt

Or information, I should be clear, not advice.

Chrissy

But For those of us who aren't lucky enough to have a super specialist at home, let's start at the very beginning. Let's say my book store is just opening. What are the main things that I need to start thinking about when it comes to super?

Matt

Yeah, it's a good question. And look, I, I've been working super for a while. Most of that is sort of been in workplace super, which is dealing with businesses of all size: small, medium and large sort of enterprise businesses. And there's probably three key things I would always say to any business of size.

First thing is, when you start onboarding employees there’s something you need to provide your employees, which is called a standard choice form. Now that sounds a little bit scary, right? But it really is, a standard choice form. It's just a form that your employees need to complete within 28 days of starting with you, which just nominates their superannuation fund. So you need to collect this from them.

Now, the second thing you need to consider, if you if you don't collect that standard choice form, which I just talked about, is you will need to do what's called a stapled search, which sounds a little bit weird as well. Now, stapling is a relatively new law to superannuation, and stapling was introduced, basically because a lot of employees over the years were collecting multiple super funds. So what a staple search does and you do this for an ATO link, which we I'm sure we could pop somewhere in the chat or if I'm pointing here or somewhere, somewhere here, staple search basically just allows you to find your employees existing super funds, which is a positive thing, right? Because, you know, over the years of working in super, I've been in many a workplace where I've done, sort of, workplace education. We've spoken to somebody and they've got sort of ten, 15 super funds. So you know, that's not good for anybody. And, you know, when it comes to super, there's certainly fees and sometimes insurance premiums that that are withdrawn from your super account.

So sort of having 10,15 accounts, I mean, unless you've got some sort of strategy behind it, which I don't think you probably do, is probably not a good choice. So a staple search allows your employer to find your existing super fund. But if you're an employer and you don't want to sort of get bogged down with that administrative burden of having to do that stapled search, then get them to complete that sort of standard choice form when they start.

So they're the first sort of two things. Now, the third thing is, well, now you've got your employees on board. You figure out what you got to pay them is, how do I pay these superannuation contributions? Now, like like most funds at Rest, we use what's called a clearing house. A clearing house basically is an online portal where it allows you to basically log in and pay your contributions to your employees, regardless of where the super fund is. And that's important as well, because there's a lot of super funds out there. And instead of you having to go and pay your super contributions to all those individual funds directly, you can just do it through this clearing house portal. There's something called the Small Business Clearing House, which we'll probably touch on a bit more detail today, which is another portal.

Or you can actually sometimes engage with your payroll provider, your payroll software. Some of those payroll software solutions actually have clearing houses products inbuilt to them. But you just need to be wary of those sometimes. Like they can be a cost, sort of additional cost to your sort of standard payroll packaging. there's plenty of options available to you.

But as I said, as always, I through this podcast is engage with the respective super fund, because they're there to help you. And as I said, we've got we've got a clearing house solution available to you. So they're the three probably key things, I know that's a bit.

Crissy

A lot, I still can't remember the first one.

Phil

Watch this podcast again.

Matt

So standard choice form, staple search and then figure out how you going to pay you super contributions. As I said, this thing called a clearing house. Very, very, you know, sort of friendly to use online portal for most part. And there's plenty of solutions available. You know, I'm sure, I'm sure Google would be able to help you all. Look, if you're starting a business from scratch, you've probably engaged an accountant at some point as well, or a business advisory sort of firm that, you know, they will certainly be able to point you in the right direction there. So they're the three things. But jeez, bit of an intro there, wasn't it? Sorry about that.

Phil

Oh mate, that's why we got you here!

Chrissy

Okay. And so when do I need to start thinking about that kind of stuff. Is it when I've got novels flying off the shelf? Or is it when I'm starting to grow and bring on new employees?

Matt

Straight away, Chrissy. I mean, obviously immediately, first thing you're going to do when you start a business is think about superannuation. Look, I know that's probably not the case. But, you know, obviously being a little bit biased working in super, we'd love you to start thinking about it straight away, but, the reality is you're probably not. But as you start to bring on board employees, obviously this is when you're going to really need to start considering, you know, these, sort of those three key things that I talked about. And particularly paying super as well, is probably the real key part of that piece there too.

One of the things to consider as well is, if you are starting a business and you're a sole trader as an example, that's an occasion where you don't actually have to pay yourself super contributions if you don't want to, I mean.

Chrissy

Which we don't recommend.

Matt

I mean, look, it's it's it really is up to you. Look, I was literally on the phone, to one of my mates who's a sparky, Jimmy. G’day Jimmy. Just before we jumped on this podcast, and I was chatting to him that we were jumping in the studio talking about this and said, oh, by the way, I probably mentioned the whole sole trader thing. You don't have to, but, you know, it's probably beneficial for you in the long run from a retirement point of view. And look at as well, if you do start making personal contributions to your super as a sole trader, there could be some tax concessions at the end of financial year as well to reduce your taxable income as well. So, you know, that's something, you know, if you're making additional you're making contributions to your super, sole trader. Then speak to your accountant. You know, the end of financial year because as I said, there might be a little bit of tax relief for you there too as well. So, certainly something to consider. You know, as a sole trader, particularly.

Chrissy

So let's go back to my bookstore. We'll use that as a great example. Yeah. So let's say things are getting a bit busy, you know. Romancy books flying off the shelf. And I'm looking to expand. So I want to start cafe. I'm going to...

Phil

Can I work for you?

Chrissy

Have you got experience?

Phil

Heaps, heaps of experience.

Matt

No wait, you said you're a barista, or was it barrister? Am I getting them mixed up?

Phil

I can drink coffee, I mean, make coffee. Hire me, please.

Chrissy

We'll do taste testing? So say I expand my bookstore and I'm bringing on Phil as a barista. Do I need to pay him super?

Matt

Is that because of his legal skills? Am I getting these mixed up? Is it the same thing? Okay.

Chrissy

Look, we're small business owners. We wear many hats.

Matt

Yeah. You do. Actually, you're not wrong. Actually, and I'm saying that particularly, you know, with my family business and my wife's business. Well, you wear pretty much every single hat, right?

When you start bringing on, you know, your full time or part time employees, casuals, etc. This is when you're going to be starting to make sort of more regular, you know, super payments required to and you're required to make super contributions to what's called eligible employees. an eligible employee is essentially someone that's over the age of 18 and earning any income. You know, you're paying them a salary. So you have to pay them super.

On the flip side, people that aren't officially considered eligible employees or anyone that's under the age of 18, so you don't actually have to pay under 18 year olds if you if you don't want to. But if they start working more than 30 hours a week, that's when they become eligible employees.

look, I've worked with businesses over the years, who just pay all their employees regardless of age. Obviously, that's a, you know, that's an amazing benefit, you know, starting to get those...

Chrissy

Starting younger is better, yep.

Matt

Starting to get those contributions rolling in early. The power of compound interest is a beautiful thing, right? but at the same time as a business I understand obviously, you know, there's a lot of expenses running a business. So you don't actually have to pay those, those under 18s. Unless they're working more than 30 hours a week, but your over 18s, soon as they start receiving a salary, you've got to pay them super.

Chrissy

I've been in super for a good few years now, long enough to see a couple of occasions pop up where employers might have missed super guarantee payments. Just how bad would that be for a small business owner if they did accidentally forget one time?

Matt

Yeah, look. And unfortunately it is the reality of the super system. There are businesses, that that do miss their payments. They pay late, pay to the wrong super fund, etc. so you know, you you wouldn't be alone as a business that does that. But look, the end of day, it's, it is seen as a bit of a No-No. And you know, as a business, you need to do everything you can to sort of get those super contributions back on track, I can't reiterate this point more. Super funds will will want to help you through that process. So they'll guide you through that process. So please reach out to your respective super fund to sort of, you know, get those back on track because in the day it's your employee's money. They've worked hard for it. And they deserve that to have in the their super in a, at a suitable time as well. So yeah, I think just as I said, engage with the super fund to sort of help you get back on track with those.

Chrissy

Yeah. And we all make mistakes, right? Human error.

Matt

Correct. Only human as you know, running a business is tough. So many things. So many things, so many curveballs going on. You know, so I appreciate it's probably not top of mind, but as I said, if you're listening to this podcast, as I said, the advice is, yeah, just engage with your super fund.

They will want to help you get that back on track as soon as possible.

Phil

So if you are one of those business owners like Chrissy's collection, she's got so busy that she's trying to manage employing me and stuff. She's made the mistake and she hasn't quite paid me on time, whatever, is there a fine or a charge involved? Or is it just like a slap on the wrist?

Matt

Yeah. Look, there is. You know, if you don't pay your super on time or you miss payments, there is something called the super guarantee charge, which you will have to pay, and On top of that, you have to lodge what's called an SGC statement, super guarantee charge statement with the ATO as well, which I don't know, a lot of people, when they hear the word ATO, they get, chills down their spine. And I... and look, yeah the ATO are doing a good job, apologies to the ATO, if I cause any offence. And look I know for me, even when I lodge my personal tax return end financial year and I get to say a few emails at the end of that, a few weeks later, I think oh geez, what have I done here?

Chrissy

Nothing strikes fear into me more than logging into Hotmail and seeing a myGov notification.

Matt

I know, tell me about it. I mean, I think I get most of my ATO emails actually not from the ATO these days as well, they seem to be some sort of spam.

Phil

Don't click on that link, Matt

Matt

I know, I don't click on that link, I know, but look as yeah, you do need to lodge that statement. you're busy enough running a business. So if you can avoid that work by paying you super on time. Obviously that's beneficial for everybody involved. Right. So yeah that's the key.

Chrissy

And how costly would it be?

Matt

It's more than likely going to be more than what you were initially owed to pay your employees as well, because there will be a penalty charge, interest and administration fees on top of that super that you were supposed to be paid as well. So you probably don't have too much spare money running a business or getting a business up or running your bookstore as an example. There's going to be lots of expenses. Brand new Harry Potter series coming up I imagine. Is that even still a thing? Is there any more books?

Phil

Stay in super, Matt. Stick to super, I think you're okay.

Matt

I'm clearly not a bookworm, clearly not a bookworm. So, yeah. Look, I think, you know, there's additional money you probably don't have spare. You know, just pay super on time and you can avoid all those charges, right?

Phil

It's interesting you're talking about the ATO, I've actually had some good interactions with them. So if you're listening out there, love your work.

Matt

Me to as well. So yeah, I've probably been painting myself in a bad light.

Phil

There's got to be some support, right? If a business is trying to do the right thing, who can they reach out to for help?

Matt

I've mentioned a few times, you know, we'd love to. At Rest, we'd love to speak with you. We we do have a business help center, actually, just on our website, we've had a page dedicated directly for employers and even things like, you know, franchises and franchise laws and things like that as well. So all the information is available. We're actually building a sort of, SG calculator at the moment as well to help you with those, those payments, calculate those, those payments as well. So look there's plenty of resources. I mean, Google's you're best friend sort of go down that path. But as I said, if you if you go to our website at Rest, you know, we've got plenty of resources available.

As I said as well, look, if you, if you do have an accountant, I'm really offloading a lot of work to the accountant here at the moment, so...

Chrissy

Season three

Matt

Yeah, season three, we'll bring the accountant in. We'll bring him in, there's plenty available for you. It's, as I said, just finding the time as well, which is another, you know, non luxury of running a business as well to to speak with them. But there's, there's so many ways to engage with the super fund. It doesn't necessarily have to be either over the phone. there's plenty of tools at your fingertips if you need it.

Phil

And Chrissy obviously you'll just call Matt up for that sort of stuff.

Chrissy

Yeah. I'll just tap him on the shoulder.

Phil

But you guys actually appreciate getting those sort of calls from businesses.

Matt

Yeah, we love it. Yeah. I'm as said, I've. This is the space that I've been working in as, workplace super is the sort of the team that I've been working in for a long time now. We love, we love being at a support business. I mean, that's why I've got a job, you know, this is what I'm here to do. And, you know, we really pride ourself on sort of helping businesses with, you know, their transactional obligations. And then there's another element to, super as well that we love to do in my team. And that's sort of that financial literacy piece. You know, obviously this is somewhat of that from a business perspective, but also from an employees perspective. There's a really big financial literacy gap in Australia. And just sort of understanding the basics. So we actually do a lot of sort of workplace education and super in the workplace, super 101 education sessions, very rewarding. And as I said, if you're listening to this podcast, and you'd like to hear more about that, please feel free to reach out to us after this. We'd love to chat with you more about it.

Chrissy

That's definitely why I work in super like I believe in the value of the product.

Matt

Yeah, it's, it's there to support you and it’s really important. But I appreciate for most people super is... as an employee or an employer, as I said, we're, very realistic, in terms of the priority and the pecking order. But, you know, there's a lot of things you can do as a business and an employee sort of early on that'll make a massive difference. You know, down the line.

Phil

So Matt obviously you love helping out small business owners. But does the government provide any services, particularly for small businesses in this area?

Matt

Yeah, yeah. I mean, there's plenty I think just from a transactional point of view, and making those super contributions. There's something called the Small Business Clearing house. That facility, as I said, if you've got, employees with, multiple super funds across, you know, various industries that they've accumulated, then you can actually log on to the small Business clearing house and make those contributions there. Unfortunately, though, that's closing down. So, yeah. So it is closing down, the end of June 2026. What are we now, 2025 yet? Okay, that's my brain ticking over. So yeah. So about a year away, the small business clearing house is closing down. So you will, you know, unfortunately, you'll only be able to use that for another year if you're jumping on now, although using it now, we'll have to find another solution. And look, at Rest we're building out a new actually clearing out solution in the future. And I'm sure we can touch on that in a bit more detail to you. So, you know, as I said, feel free to reach out to us if you, you know, need some support around that too

Phil

So, I hear talk in the office and around the super world that we're about to go into payday super. So just to ease small business people's minds about about the interim time. Can you tell us about what's planned in this transitional phase?

Matt

Yeah, look. At the moment you would've heard a lot of talk from my team, the Workplace Super team. We don't stop talking over my side, so apologies for all the noise!

Chrissy

We hear you.

Matt

But look, here we are, we're in the process of actually building, a new payday super solution, partnering with a sort of tech provider at the moment. So just have to watch this space.

Phil

Awesome. It sounds really helpful. So we'll put some links in the show notes, of course. And we won't put your personal line in there, but we'll have some sort of help for you.

Matt

I mean, you can if you want.

Phil

Oh, excellent, great.

Chrissy

We obviously know about Payday Super because we work in the industry. But for those that don't know, I just want to spend a bit more time going into detail about what it is and what it's going to mean for small businesses, for businesses around Australia.

Matt

Payday Super is yeah, it's one of the biggest shifts in the super industry from a business point of view, an employer's point of view, that I've seen for some time. Just to give you some context as well, when I first started working in super, you know, 15 years ago, showing my age a little bit, this hairline is receeding at an incredible rate.

And that was, you know, when I first started working it was actually in a Rest call center, actually. So. Yeah. So a long time I've been working with Rest. A lot of the, the calls in the call center back in the day were around where businesses, small businesses like yourself, your bookstore, I'm sure, spoke to many a bookstore back in the day. And they were asking, you know, how do I go about paying contributions? What's the right way to do it? And back then you could actually send in a contribution on the, remittance on the back of a cheque. And this is, ten, ten years ago, people still sending in checks, with a remittance on the back of it. And, you know, trying to allocate that accordingly, you know, is, absolute nightmare. So since then, super streams come into effect, which is basically employers having to sign their contribution digitally with a data standard as well. And now Payday Super is probably just that next iteration. And what payday super, the difference between payday Super and what it is now, is at the moment super and for a long time is only required to be paid quarterly.

So you only have to pay it, you know, four times a year and you actually have 28 days after the quarter to actually make those contributions as well. So there's plenty of time. So I've had many conversation with Rest members and you know, just, you know, small businesses, employees or businesses, employees where they've said, well, Matt, I can see on my payslip that I've got super paid to me, but I've just checked my Rest account and it's not in there. And that's because the employee doesn't actually have to pay it until the end of the quarter. So it's sort of withheld till then. Payday super, you actually have to pay it on, you know, receipt of paying your employees salary or wages. So it's a really big shift in the industry to be honest. You know, imagine going from quarterly to weekly, you know, as a business that's a, that's a big...

Chrissy

Huge admin burden.

Matt

Yeah, it's a huge admin burden, which is why, super funds and, and providers need to come up with some new technology to be able to help businesses and support businesses with that as well, because, I mean, can you imagine sending a cheque, you know, pretty much every day to your employees like it was back in the day, right?

So it’s a big shift in the industry. And as I said, if you think about your bookstore Chrissy, as an example, you know, it's not just the how, how regularly you're gonna have to pay these contributions, almost like a cash flow thing you need to consider as well. Because if you've gone from quarterly to weekly, all that money that you might have had, you know, sort of in your accounts to, to pay for electricity bills and, you know, the coffee shop that this guy over here is running as well, you know, and all the free coffee he's drinking too. So...

Phil

Allegedly

Matt

Allegedly, you know, there's some other things you need to consider as well. So, yeah, payday super is it's a it's a really big shift in the industry. I'm certainly having a lot more conversations with businesses around it now, and, you know, how they sort of get ready and gear up for it come July 2026?

Phil

And is it definitely going to happen or is it just being talked about at this stage?

Matt

Yeah, it's it's it's not law yet. But it's certainly being considered. But I think most businesses, are sort of working with their super fund or super funds at the moment to get ready for it, which is probably a good sign that it it might come in. July 2026.

Chrissy

And so with Payday Super coming in what there'll be further changes to the super guarantee charge?

Matt

Yeah there is some changes coming to the SG charge, gee that's a mouthful. And look, to be honest, it can be a little bit complicated. So with the magic of podcasts and links, can we just pop like a link somewhere here

Chrissy

So before we jump off topic, why is the government making these changes?

Matt

Yeah, probably two key things, I think. First one being accountability. We've mentioned a few times today employers underpaying superannuation, not paying, paying into the wrong fund. So it does make employers businesses a lot more accountable. And I know that's an additional burden. So if you're listening to this podcast it's not me making these changes. It's, it's a legislative change. But look it, it does once you sort of get into a groove, I think as a business you sort of get a bit more familiar and paying it more regularly might be somewhat easier for you. I said technology pending as well, obviously.

And then the other part is obviously transparency as well. So as I mentioned that example, that Rest member that I talked about, he showed me their payslip and they said the super was in there, but I couldn't see it in their Rest account. Well with payday super, it's more than likely it's actually going to be in their account.

And from an employee's perspective, super members perspective, they're going to get that that power of compound interest ticking away a lot earlier. There's more regular payments going in. And as you can see, and you know, once if you see money going into any account, your bank account, super fund, you're probably gonna get a little bit more interested in it as well, which is what we want. Right? So I think you're probably going to start being naturally more engaged with your super with more payments going in. So, it can be you know, obviously it's I think it is a positive thing, to be honest.

Phil

It does make sense, doesn't it, the whole idea. Like it's just a whole like, you know, if you're wanting to see what your, where your balances is at, just download the app, that sort of stuff. It just makes sense to making that much more of a digital experience. Yeah. Assuming that's what's going to happen with payday super.

Matt

There's more technology coming around the corner, whether it's clearing houses or sort of payroll providers, payroll systems, they're all having to enhance the technology. And, you know, for, an employees or a member's point of view that technologies, already available to be able to sort of view, you know, your super if your wrist members example, you can look at your super app..

Chrissy

I like to do it every day.

Matt

I mean, a lot of people, a lot of people do. And you know, when there's, when markets are sort of bouncing up and down as well, like that's when a lot of people like to look at their super.

Chrissy

It's a good time to learn about the markets though when you see it fluctuating.

Matt

100%. Yeah. And a lot of people, that's when the penny sort of drops, oh my super is invested and, why is it bouncing around type thing. And that's when we obviously want to chat to you about, you know, why it's doing that. And, but it makes a bit more real. So yeah, having that, that app, you know, particularly the, the Rest app, obviously a little bit biased. It's pretty good.

Chrissy

I think I definitely had that misconception of like super being a savings account.

Matt

Yeah, a lot of people do.

Chrissy

Most people do. Yeah.

Matt

Yeah it's savings for retirement. Yeah.

Chrissy

So I feel like we've covered a lot, but before we wrap up, is there anything else that you want to leave people with?

Matt

Yeah, there's there's a lot obviously we've we've covered today just sort of, business and super but particularly payday super as I said, is probably one of the biggest things coming around the corner. You know, I can't stress this enough. Engage with the super fund. Obviously reach out to us. Can I give my team, like a shameless plug or is that...

Phil

I think you're going to anyway

Matt

.. Is that frowned upon? I'm going to do it anyway. So I'm a... (makes heart hands, laughing) Super Solutions at Rest. But you can literally reach out to my team. Feel free to email Super solutions (all one word) at rest.com.au. You'll literally hear from myself or my team. We'd love to be able to support you with that. I know at the moment, we've we've actually already run one payday super webinar, at the back end of last year for our Rest employers. And we're, we're going to be running these more regularly as we sort of gear up into, July 2026 as well. So, so we'll be communicating that to all our employees. If you're listening to this right now, you want more information, I'm sure we'll be able to sort of, yeah get in touch with you as well. You can reach out to me. I've now got my team's email out of the, in the universe.

Sorry, team. But look, all jokes aside, we'd love to support you, but that's that's probably the biggest thing. Engage, engage with your super fund as your accountant is probably another point of contact as well. Business advisory groups there's so much support available for you. And. Yeah, we want to chat to you too.

Phil

So Chrissy, after hearing all of this sort of stuff, are you still going to start your bookstore. Do you still feel like it's too tricky?

Chrissy

I don't think I'm done with the space of super. Yeah, right. Okay. I think I'm going to stay in superannuation.

Phil

But the idea of running a small business, hopefully this has helped make it a bit easier, a little bit simpler, hopefully.

Matt

Definitely.

Phil

Or listen to this podcast again.

Matt

Obviously.

Phil

But if you have enjoyed today's episode, please make sure to like, follow, and subscribe.

Chrissy

And if you'd like any more information on the things we spoke about today, make sure to check the show notes.

Phil

And that is...

Phil and Chrissy

Super simple.