Robert's Retirement Blog

I always see a lot of ads whether that be online / or on the TV encouraging people to consolidate super funds – with the sole purpose being to save on fees……

Although true to a certain extent, when you actually look through your super fund product disclosure statement (PDS) and see what fees are being charged where, a lot of the time the large proportion of fees are actually percentage base. These are often referred to as “investment costs”. Then there is usually a small flat fee which superannuation funds call an “administration fee” – this fee is usually fixed and I generally see ranges from $50 a year to a few hundred dollars a year. Noting these are just some examples of fees and it is important that you look into your individual funds to see what is being charged.

An example below where consolidating may even cost you more fees if you don’t do your proper research:

• Fund A might be your current fund your employer contributes to. It might have a balance of $100,000 and has a fixed administration fee of $70 a year and an investment fee of 1.10% (which equates to $1,100). So total fees are $1,170 p.a.
• You might have Fund B that is an old fund that has a balance of $100,000. Fixed administration fees of $100 p.a. and investment …

Downsizing means something different to each and everyone. When I am talking to someone in their 60’s and we discuss their future plans – they mention it might include selling the large family home and “downsizing” as kids may have all moved out, the house is getting a bit tired/old and it’s time to simplify things.

From what I have seen over the years, downsizing prior to the Australian housing market going up by vast amounts since 2020, it used to involve selling the family home for say $1 million dollars (generally 4 bedroom, on a larger block etc), then buying somewhere smaller but newer for $650,000 - $700,000. Now that won’t immediately free up $300,000 (as you have to consider stamp duty etc). However, it did still leave retirees with a few hundred thousand extra to help fund their retirement.

It is still doable to free up capital now-days and it all depends on what you have and what you are wanting, however I am working with a lot of clients now where downsizing actually might mean spending the same $1 million dollars they sold their home for and having to pay extra on top for stamp duty. Usually this might mean – the retirees are still in the same suburb they like, with a nicer newer home and hopefully less …

As time goes by and if we are lucky enough - we age well and then pass away. When you receive an inheritance from a loved one that has passed, there are many emotional aspects and time taken to arrange things like funerals, selling a home, or it might be keeping a home and supporting other family members. When things settle somewhat – finances are on the list to be considered.

It is hard to plan for everything but sometimes it is good to start preparing your finances whilst the assets are in probate and haven’t reached your name yet. Somethings to consider include:

Tax – Now this can be tax the estate has to pay before it reaches you, or the tax that you may may be obliged to pay in the future moving forward as you inherit assets that may generate income or capital growth.

Centrelink – When receiving funds from an inheritance, the general rule of thumb is if the funds through the deceased person’s Will were intended for you – then they become your asset. I often get questions from clients and prospective clients as this may reduce someone’s Age Pension to nil for example. People then look to offload the inheritance to another family member for example like a child etc. In Australia you can do what you want with your money and …

Superannuation can only be accessed in limited ways. Superannuation has always been designed as a mechanism to assist funding someone’s retirement. The legislation recognises people’s lives don’t always follow a simple path of working until 65 then retiring for example. Some people may not make it there and due to a terminal illness and then legislation allows those who are terminally ill, to access superannuation early.

The ATO’s definition of when you are classified as being terminally ill is “ 2 registered medical practitioners have certified, jointly or separately, that the member suffers from an illness, or has incurred an injury, that is likely to result in the member’s death within 24 months of the date of certification” (see reference here). Noting there are a few other pieces of criteria. This has to do with accessibility of superannuation and sometimes your fund may hold insurance which has a different definition – so it is important that this is looked into.

With SuperSA Triple S scheme here in South Australia, when concessional contributions get paid into the fund (i.e. from your employer) or earnings are accrued in the fund – no tax is taken out, where in the private sector world, this is usually up to 15%. The …

Superannuation has been around in Australia for many years since I believe the early 1900’s. However, it hasn’t been compulsory for employers to pay super contributions until 1992 when Paul Keating the prime minister introduced SG (Superannuation Guarantee). It is interesting though how guarantee is in the name yet over 30 years on – I still see clients that don’t have this guarantee, and employers have missed or not paid compulsory superannuation payments.

Currently employers can pay superannuation quarterly if they like, which can get confusing. For example, you look at your pay slip that might be fortnightly for example and it shows an amount that your employer has paid in superannuation – however you sort of have to go through your last quarters pays’ – add them up on each pay slip, then check with your super fund to make sure you have been paid the correct amount.

Now, with the new laws, after pay day – employers will have 7 days to pay your SG into super, this way I think it is a good step forward so employees can easily monitor their payments. Also, hopefully it encourages employers to pay super on time and actually pay it as the frequency is higher so employees can more closely monitor it and question discrepancies.

Noting …

As time goes on – I have seen more and more tools online to help people plan for retirement. Obviously, my views are bias being a financial planner but these online calculators can be misleading due to so many different variables and unknowns. However, they can also be a good starting point to get people thinking.

Moneysmart.gov.au has a full retirement planning calculator now – I am not sure when it was released but I don’t personally remember it being there say over 2 years ago. For the purpose of this blog though – I am just comparing their account-based pension calculator as the full retirement planning calculator has even more variables that can be hard for a user to understand and input to ensure an accurate output.

The calculator asks for the following variables for users of the calculator to input:

• Your age
• Retirement date
• Current super balance
• What income you would like from your superannuation
• Pension fees
• Investment option

The above are fairly simple variables but retirement isn’t always simple and here are my thoughts on the variables compared to what I see in everyday practice:

• Your age
  • Pretty straight forward this one and should be easy (although I have been guilty of not remembering my age sometimes!). …

Generally – no two returns in superannuation are the same.

What I mean by that is sometimes people see on the TV that Superfund XYZ has an investment option that has performed 8% for the year. Now, you might be in the same super fund as your neighbour/family/friend – invested exactly the same – but what is happening in each fund is different. Your neighbour might be self employed and made a one-off contribution to the fund once markets dropped during the year – this means that they might have purchased “investments” in the super fund at a cheaper price than yourself if you had your employer making regular contributions throughout the year effectively purchasing “investments” within the same fund as your neighbour but at different times.

The returns generally quoted are if you held the same investment from 1st of July to 30th of June in the financial year – they don’t account for any individual withdrawals you may have made (i.e. if you retired and took money out) and also don’t account for any contributions you had made. The reason your return can differ is because anytime you make a withdrawal or contribution, you are effectively purchasing or selling investments within your fund. This then has an impact to your overall return. …

People often say my super fund has performed good this year or my super fund has performed bad.

Really to be technically correct - I think you should say my investments I have chosen (or not chosen as it was default) inside my super fund has performed good - or my investments that I have chosen inside my super fund have performed bad.

Superannuation is just an investment vehicle where you can hold investments inside.

There are many types of structures like industry funds where generally there is only 10 or so investment choices (some have more and some less), then there are retail funds where investment choices can be in the 100’s or self-managed super funds where there is almost unlimited (provided they meet the governing rules of an SMSF).

Sometimes superannuation funds like industry funds’ will manage the majority of the money themselves in their “pre-mixed or blended” options. Effectively meaning they employ people to physically buy and sell shares and other investments on behalf of the members. Other industry funds such may only manage a small portion of members money “in-house” and the rest they will employ people to find other institutions or businesses to “buy and sell shares” put simply.

With retail funds - there …

Firstly, what is deeming? Deeming and deeming rates apply to many different Centrelink payments. I like to think of it as: if you bundle up all of your financial assets like bank accounts and account-based pensions, you will come up with one number. Now, Centrelink doesn’t actually look at each individual asset you have and assess the earnings for each asset — they bundle them up and apply a blanket “deeming rate” to all the financial assets. This amount is then added to your income to help calculate your entitlement.

To view a more detailed summary of deeming in relation to the Age Pension, you can visit Services Australia’s website here.

Since 2020, deeming rates have been at historically low levels and remained that way for quite some time (due to the COVID-19 pandemic).

From the 20th of September 2025, they will be increasing. There are two main rates — the lower rate, currently 0.25% p.a., will increase to 0.75% p.a., and the upper rate will increase from 2.25% p.a. to 2.75% p.a.

There are different thresholds these apply to depending on your situation. Everyone is impacted differently. If you are income tested, for example, this will likely have an immediate impact. Then there are those who are asset tested — depending on …

Planning for retirement, retiring then managing your finances in retirement isn’t always linear.

What I mean by that is sometimes when retirement is discussed, living expenses are worked out, income is setup and then sometimes people leave it as a set and forget.

That maybe the case for some people but especially in the recent years since 2020 we have seen inflation some years in Australia increase by over 7%. Now if you planned for an increase of let’s say 2-3% year on year. Your original plan is already outdated.

On one side though the general headline inflation might be 7% (which considers multiple different goods and services) but you may feel it more personally than 7%. I.e. your insurance premiums might have gone up by 20% and your weekly food shop by 15% amongst other increases greater than 7%.

It is important to consider how this affects you personally, it isn’t a reason to panic but more just plan ahead, rarely when someone starts out in retirement vs 15 + years in retirement are they spending as much as when they start. So, it may be the case that you can spend more in your early years and then when you are older, you might not be as active with travelling or you may only need one car instead of two if you are a couple. …