Insider wisdom: 9 actionable tips from retirement industry pros
I've got something special for you for the holidays—direct from the experts in the retirement industry. Nine useful and actionable tips for creating an epic retirement.
In this weeks edition
Feature story: Insider wisdom: 9 actionable tips from retirement industry pros
Prime Time Podcast: How to rediscover your sense of purpose with Barry Bloch
From Bec’s Desk: What a year! I dive deep into 2023’s lessons and my big year of change
Insider wisdom: 9 actionable tips from retirement industry pros
You all listen to me babble on every week in this newsletter. And often I do it in isolation, trying my best to simplify complex retirement topics and make them easier to digest. I do a lot of research, and quote scientists, global gurus, and real people with stories to tell.
But you’ll also note that I spend a lot of time pointing out that there is a big industry out there that is designed to support and help you navigate pre-retirement and retirement. That industry can sometimes feel hard to understand and a long way away. So today, I’m bringing them in.
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This week, as a little Christmas gift to you, I asked some of my friends, peers and experts in the retirement industry to give you ‘one actionable tip’ each - something practical you can do to help yourself thrive in 2024. And I was bowled over with wonderful, helpful and most importantly ‘actionable’ tips that you can soak in all holidays long, as you build practical plans for the year ahead. After all, the process of navigating retirement is something you do over many months and years, building up your knowledge, understanding and confidence until you have all the insight you need to nail it!
So without further ado - let’s dive in to the tips from the industry. I’m going to narrate them, to weave them into a story for you, so it isn’t just a list of tips - it’s a guided tour! Far more fun I think.
1. Take advantage of retirement planning tools that are free - to help you learn
This tip really nicely starts our list, nudging you to take the first steps in understanding your retirement finances proactively, by using the tools and calculators that are readily available to learn and form your first pictures of how your money might work. These calculators and tools build your sense of confidence, and they help you plan, whatever the reality of your financial situation.
“We’d suggest interacting with MoneySmart’s retirement planner or your super fund’s online tool, said Jen Harding, General Manager of Advice Development and Growth at HESTA.
“This can help you estimate how much income you’re projected to have in retirement, and you can work out how that relates to how much you might need. ASFA’s retirement standard provides a useful guideline of expected expenses.
2. Take time to learn about the systems of retirement and take advantage of the advice available through your super fund
“Understanding eligibility for the age pension, learning about how you turn your super as a tax-free income stream or utilising downsizer contributions are all things that can help make those lifestyle goals of chasing the sunshine in a caravan, embracing a tree change or seeing the world from a cruise ship, a reality,” says Peter Hogg, Business Lead - Super Helpful (Advice) at Aware Super.
“Most super funds will be able to provide you with personal advice about your own super account at no additional cost, and this is a great first resource we’d encourage everyone to take advantage of.”
I support Peter’s push - that everyone should find out the types of advice that are available to them through their super fund and use them - even if they are only one step in your learning and growth process. Remember - there’s certainly some helpful and free advice out there if you know where to look.
3. Learn about investment returns in your pre-retirement years
Investing is worth learning about and understanding more deeply before you retire. It’s a really powerful tool in your retirement toolbox.
“Pre-retirees should spend time learning about investments, as if you can increase the rate that you earn by (say) 2% per annum, then you could increase your retirement income, lifestyle and happiness substantially. “Investment return” is far more powerful than “contributions”, said David Orford, the Managing Director of Optimum Pensions.
Most people don’t realise that their investment returns during retirement usually make up the largest amount of income they generate in their lifetimes.
“For Australians using appropriate tax settings, retirement age and economic assumptions, the percentages of one’s total lifetime pension income to life expectancy are:
15% from the money you saved during your working years
35% from the investment returns you achieve before you retire
50% from the investment returns you achieve during your retirement,” said Orford.
4. Take a harder look at your expenses and cut back, putting the savings into super
If you can look at your expenses and find 5% you can cut back (if not start at 2% or even 1%). It doesn't matter where you find the savings, just cut back on whatever works for you says Paul Feeney the Founder and CEO of online financial planning app, Otivo.
“Now put that toward your retirement by making extra contributions into your super (or paying down debt, or saving for a house or increasing your mortgage payments). In 3, 6 or 12 months (whatever works for you) increase the amount you are cutting back by just another 1%. Keep going until you find you have cut back 10% from your original expenses. Keep funneling those savings into your super, your home or paying down debt.”
“I know it's going to be hard, especially in these times where everything seems to cost so much more,” he said, “but trust me if you can find a little savings and slowly increase that periodically, your future self will thank you, because you will be better off!”
Wonderful tip Paul! I’m going to attempt this in 2024.
5. Consider switching from accumulation to pension phase
The jump from accumulation phase to retirement phase is a big area to understand better, because people pay 15% tax on earnings in superannuation in the accumulation phase, and they get those earnings tax free if they flip it into retirement phase.
“Many people leave their super where it is once they reach age 60 and retire. Unfortunately, this could leave them paying more tax than they otherwise might, says Colonial First State’s head of technical services, Craig Day.
“By leaving their super where it is, many Australians could be inadvertently sacrificing a better retirement lifestyle,” he said.
“Investment earnings on super are taxed at 15%. – which could mean a lot less super after 10-20 years. If you have reached preservation age, you can qualify to convert your super savings to a pension and the investment earnings will be tax free.”
[Note: preservation age ranges from 55 to 60, depending on your date of birth.]
6. Review your investment strategy actively at the end of the year, leveraging the predictions and economic insights. And get decent advice!
You’ve heard me bang on about how important compound investing is, and when investing for the long term, you still need to monitor and reassess performance regularly to keep things on track. So this tip from David Lane, the Queensland State Manager and Senior Private Wealth Adviser at Ord Minnett is a goodie.
“My best tip is to review your investment strategy and ensure it is still appropriate for your circumstances. The end of the calendar year is a great time to take stock and review, as it is a time when you can assess the performance of your portfolio over the calendar year, and it is also a time when there are lots of predictions about the year ahead,” he said.
“Over 2023 we have continued to witness the impact of rising interest rates, which has had an impact on investment returns (in both positive and negative ways). If you haven’t already done so, it may be a good opportunity to recalibrate your asset allocation to ensure that you are gaining benefit from higher interest rates. Consider whether your current risk profile, and therefore your asset allocation is still appropriate,” said David Lane.
“The other big tip (a bonus) is to speak to your financial adviser . . . or consider engaging with one if you haven’t already. They are there to guide you along the journey through retirement, and to help you enjoy your Epic Retirement! It was found in a study by Challenger that retirees who have spoken to an adviser were 14% more likely to be confident or very confident in their ability to live a comfortable life in retirement. Interestingly, the improvement was more evident at lower wealth levels,” said Lane.
[Many thanks to David who contributed to the finance section of How to Have an Epic Retirement quite significantly, helping me build our scenarios!]
7. Review your asset allocation of the holdings that will be providing your main income source for 2024
If you’re in retirement and drawing down a pension, how long has it been since you last stopped and re-calibrated your asset allocations, checking how much you have in defensive assets, against your drawdown needs? Shayne Sommer, Private Wealth Adviser with Shadforths, offers a really helpful tip to consider.
“If drawing down from superannuation pension, review the level of income you will be drawing down for the period – a rule of thumb is to aim to have 5-7 years of that drawdown amount in defensive style assets,” said Shayne.
“Investing in this manner may be able to shield your portfolio from needing to draw down from growth assets during times of market decline. As the legislative drawdown increases by age bracket, check with the ATO for pension minimum drawdown amounts required. These thresholds apply to the age you are on 1 July 2024 for the FY25 year.”
8. Look after your health in retirement
Money is not the only thing to focus on as you approach and enter your retirement years. You simply cannot have an epic retirement without your health and happiness so I love this second tip from David Orford, the Managing Director of Optimum Pensions. It’s always better when you hear it from someone in the finance sector - because you know it comes from the heart.
“Retirees, you and your partner’s health is your most important asset, so look after them well by exercising regularly within your capabilities e.g. walk 5,000 steps a day, reduce your weight to an acceptable level, eat good food, reduce your cholesterol and blood pressure levels, laugh a lot – particularly at yourself,” said Orford.
9. Top up your super as you downsize your home
The downsizer incentive is a doozie, that everyone who is in their fifties and sixties and wants to whack a lump sum into super will want to understand better. I find myself at dinner parties explaining it to friends all the time, pointing out that they need to learn more about it BEFORE they downsize to maximise the opportunity. And Craig Day, the head of Technical Services at Colonial First State concurs.
Many pre-retirees might be considering downsizing from the family home to something smaller, particularly if their kids have moved out, says Day.
“If you sell a home you’ve owned for at least 10 years and you’re 55 or over, you can put up to an extra $300,000 (or $600,000 per couple) of the sale money into your super, subject to a few other conditions,” Day said.
“This is on top of any other super contribution limits that apply,” he said. “However, to take advantage of this you’ll need to plan ahead as you’ll need to make the contribution within 90 days of the settlement date.”
What a list of tips! These tips aren't just nuggets of advice—they're your keys to unlocking a prosperous and fulfilling 2024. So, take them seriously, and take some action in the year ahead - go on, make it epic!
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Important Disclaimer: The information provided in this newsletter is for general informational purposes only and should not be considered as financial, legal, or professional advice. Consult with qualified professionals before making any decisions based on the content. We strive for accuracy, but we do not guarantee completeness or suitability for your specific circumstances. Any actions taken are at your own risk. Financial decisions involve risks, so it's crucial to conduct thorough research and seek professional advice. Past performance is not indicative of future results. Stay informed about changes in legislation and regulations, and verify information before making decisions.
How to re-discover your sense of purpose with Barry Bloch
If you’ve been wondering about how to re-discover your sense of purpose and where you might find greater fulfilment in the second half of life, then this episode is for you.
A sense of purpose and belonging is one of the most fundamental needs we all have. As we head into, and travel through the second half of life we have to ask ourselves how we find real joy and actively look for ways to do so. So this episode of Prime Time is devoted to re-discovering our purpose or ‘true north’.
Barry Bloch is an organisational psychologist and is an internationally regarded people and culture leader, executive coach and guide who has worked in more than 50 countries. He’s also a registered psychologist. And, more importantly for us, he’s an expert in finding your true north. He’s got an amazing sense of purpose in himself, and is a really powerful ‘whole of life leader’.
Throughout his career he’s spent most of his life helping people find excitement, meaning and purpose in their careers, charitable roles and beyond the workforce as they head into their third act. He’s someone who’s spent a lot of time coaxing and supporting people through what can be quite a transformational phase of self-doubt and self-discovery in their Prime Time. And he talks openly about how everyone should take the time to look for and find their true north, and why it’s so important to the next phase of our lives and yet so difficult in our Prime Time years.
In this episode, Barry Bloch unravels the psychology behind finding your sense of purpose, at a time of life when you have CHOICE, often for the first time in decades.
LISTEN HERE - LATEST EDITION (S1E9) - OMNY
or listen on APPLE PODCASTS
I found Barry’s advice really useful and personally very applicable. I hope you do too.
Merry, merry, merry Christmas! This is my last newsletter for the year! And what a year it has been. It has been an enormously rewarding year for me professionally. I built a voice that could be trusted to help, guide and show the way to those approaching retirement and pre-retirement with independence, and with the trust and support of the industry and the community. It has also been rewarding personally as I’ve created more balance in my own life than I had in my previous years, seeing my kids through some important changes, being more active in pursuing my own health and wellbeing, and my own interests too - after too many years of not making time.
I thank you for embracing my work, sharing it with your friends and being an active part of everything I’ve done. This transition wasn’t easy. And I know I’ve been very fortunate, so I wanted to share some of the lessons learnt. If you’re contemplating changing your own career, directing it more closely to your passions in your Prime Time - I think there might be some useful tips here.
Some wisdom from 12 months of big change…
If you want to make a jump out of a long term career path into work you do because you love it, and it has meaning, on your own terms, then you will want to give the whole process some thought and planning (both financial and functional). Then once planned and everything is in position, do it.
Understand your passion and energy
Really stop and think about it. I sat down in September last year, knowing it was time for a meaningful change and I contemplated the things I do that make me really happy and challenged. I analysed my own skills, the things that put me in ‘the zone’ and the trends in the world that I am deeply, deeply interested in, and I landed on diving back into modern retirement, and helping people age better, independently. I knew I needed to use my understanding of older Aussies, my deep knowledge of changing retirement, my writing, communication, education and research skills, and my years in digital content to make a difference in this messy and confusing world. Then I pitched my book idea.
Think about the mix of things you want to do
The next phase of life - our Prime Time years - are not always about one job at a time or one company at a time. In fact, the most modern views talk about building a ‘portfolio’ of things you love to and want to do. I’ve spent this year building my own portfolio, around making the best of the second half of life - and I’ve been blessed that some of the things I tried have been well-received. I hope I find more things next year - with great companies, partners and collaborators.
my first book came out in July 2023, How to Have an Epic Retirement (Many thanks to the team at Hachette - Sophie, Stacey, Alexa, Kirstin!). It’s a bestseller! 🥳 Thanks for enjoying it!
my nationally syndicated newspaper column is published in Nine Newspapers every Sunday and a once a month column with National Seniors too! (Thanks to everyone for reading my columns and to my editors for continuing to invite me back!!)
I’m growing a podcast with Nine Podcasts called Prime Time; (Many thanks to Gen my producer - you rock!!). And to all our wonderful guests in 2023 - huge thanks.
this weekly newsletter I work hard on, for you, our beautiful community; (Thanks to our sponsors this year! - We are keen for sponsors for 2024 - putting that out there! More info here)
and a soon-to-launch online / offline education program to help people become more retirement literate (Many thanks to my wonderful video production team!!) We are offering the really high quality program to super funds and corporates for their members and you can register your interest here too.
Talk to people about it - until you find your pathways
One of the hardest things for people to do is start talking about what they want to do in this country - tall poppy syndrome stops us. But it’s crucial. The pathways will become clearer as you talk to people, especially if you’ve done the work to understand what you enjoy, where you want to go, and what skills you want to be using. Listen to the podcast with Barry last week - he talks about getting someone to hold your hand as you walk through the sandstorm of change. He’s right - I walked through the sandstorm. It can feel hard to find your passions. Hopefully you have the ability to choose things you really are interested in. Sometimes you have to combine ‘jobs you do for money’ and ‘things you do for real purpose’ to get the crossover right too.
Be part of other people’s journeys
Everywhere I go people are talking about their own transitional journeys - in Prime Time (~47-70 and not yet retiring) and seeking their Epic Retirement. And they need help, validation or just someone to talk to about how it feels in the sandstorm. So if someone you know reaches out for one of those chats or support - to help them find their own path to passion - welcome them. Be a supporter not a blocker.
I know! It’s a deep and personal way to dive into Christmas. But I want you to feel safe here, knowing we’re all on the journey to find meaning and purpose together. And if I tell you my story - maybe you’ll use it as fuel for your own fire.
So, that is a wrap for the Epic Retirement Newsletter this year. I’m having a couple of weeks off writing - and will be back full throttle in the newspapers on the 14th Jan, and the newsletter on the 16th Jan in 2024. The Prime Time podcast will be coming out all through the holidays (except the Chrissy week) at primetimers.net.
Until next year… make it epic! And thanks for a wonderful year! You made 2023 more fulfilling than I could have dreamed of. I’ll be tinkering in our Facebook community through the holidays if you want to play… join our group. Or follow me on Instagram here for beach photos and cocktail glass pics (and a few more meaningful retirement related posts I promise).
Don’t forget to email me and tell me what you want more of, and what you’re enjoying! (just reply to this email) Or…leave a comment on the post - and an emoji.
Many thanks! Bec Wilson