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the new school of super podcast series

Episode 37

How do the super experts take charge of their super?

April 2021

Like you, Sunsuper's Head of Advice and Retirement and National Education Manager are balancing kids, mortgages, extended families, super and retirement plans. Don't miss their tips and personal stories.

Hello, and thanks for tuning into the new school of super. Sunsuper's webinar and podcast series covering investment markets, money matters, superannuation, and most importantly making sure you achieve your retirement dreams. My name is Anne Fuchs, and I'm Head of Advice and Retirement at Sunsuper. And the team and I, work really hard to make sure as many members as possible get great quality financial advice so that they can live their best possible retirement. And part of the best possible financial advice, advice involves education which is why my main man is here today. Joshua van Gestel, our National Education Manager here at Sunsuper. Hello, Josh.

[Joshua] Good, good morning Anne. I loved the ego boost. Your introductions.

[Anne] You deserved it.

[Joshua] Wonderful to see you.

[Anne] The members love seeing you when you're out in the regions, but what's wonderful about this medium is that no matter where our members are, they can watch this webinar and watch you. So we're going to be doing a bit of sort of reminiscing. Soul-searching, thinking deeply about the good decisions and maybe not good decisions we paid with money. Bit of an Oprah style session. Maybe. I don't know. We'll see where we go. Before we do that, Josh, are you going to take the compliance general advice warning?

[Joshua] I certainly am. Thank you Anne. So just a reminder that everything that Anne and I discussing today is of a general advice nature only. And we really encourage you to explore how these circumstance and situations might apply to you. And so to help you in that, please do reach out to us either on 13-11-84 or by visiting our website at "sunsuper.com.au". Seek out some further information or talk to one of our wonderful team.

[Anne] That's beautiful. Look, you know, I said this in a previous episode with Brian about how financial literacy is sort of the foundation of members engaging with their money, there's their superannuation, and it's their money. And, and it's going to be really important at the end of their working life, and an understanding, you know principles about risk and asset allocation, and compounding interest in. I think, education starts at home. And, I'm married to a German, you've got a Dutch name. I'm married to a German fellow and,

[Joshua] Yes.

[Anne] who grew up in Dusseldorf, and Germans love talking about money. And I come from an Irish sort of family that don't like talking about money. And so, I think about the different decisions in my family over the years. And a lot of it stems from his comfort talking about money in detail and my discomfort. And the decisions that we've made ever since. What about you? What are your initial reflections around your family?

[Joshua] Well, they were outside of it. Well, dare I say that the Dutch just like hoarding money, Anne.

[Joshua] I actually don't think that, I don't think the Dutch, like talking about money too much and like yourself, I'm actually half Irish as well. So, so money is certainly something that was very important in our household but not something that was something we discussed on a daily basis. But what I'd love to know Anne, you've touched on a few things. I know you've got a beautiful family, and I know that you've got a beautiful home in Brisbane. But, if I can ask you to reflect on your forties, what are maybe some of the big financial decisions that you've had over the last few years or, or maybe some of the things that have happened in your life that have had big financial consequences?

[Anne] Look, I think at the buying a home, a home where you're taking on some real debt is ultimately, the, the thing that caused me to make some bigger decisions. So when we bought our first home in our thirties, Josh, we went and got financial advice to make sure that we could you know, insurances were in place and all, and and super funds were where they should be. But when you're taking on a bigger debt, we have three children that are now pretty well old teenagers, so we needed to have a bigger home. Looking at things like whether I should have superannuation. So whether I should have insurance inside of super, outside of super, what happens if either Frank or I fall off the perch, so to speak and can, what are the, how do we fund that? Thinking about where is actually the best place to put Frank's, my superannuation? And is it with Sunsuper or not? And if not, why not? And can we afford to put more into Super? Or do we try and pay down our mortgage faster? And then there's this other people's school fees, of which we have three of them. So these, that's just like a montage of all of the things that keep Frank and I in much discussion to the Fuchs' family household in our forties. What about you, Josh?

[Joshua] Anne, you know I, I find it amazing Anne that although I know we're two completely different people, and live two completely different lives. The same issues have permeated through my life with Tash, my wife over the last few years. We very early in my forties, I was blessed with my son. And that was one of the most wonderful things that ever happened to us, but also probably one of the largest financial commitments.

[Anne] Mm-hmm.

[Joshua] we've ever had put on us. But, but I think also in that key area, we've sold a home. We've sold an investment property. We've bought what hopefully will be our forever home. And even at the moment we're going through major renovations that, that there I say to you, things like the colour of the bricks, has been keeping me awake at night thinking about, but,

[Anne] Well, you are, you are an artist.

[Joshua] That's right. But I do think you've, you've struck some of the key things that people do need to think about that, that all of those decisions mean we've had to assess our insurance. All of those decisions have at different times, meant we've had to assess what we're doing with our mortgage, how much we're deciding the pay down, especially in these times where there's really a lot of motivation to be trying to be putting more in our mortgage. But I also think in that period of my forties, Tash, my wife, has gone through or is going through her forties as well. And she's had changing in her career, and that's given us super opportunities as well and not think about the co-contribution or or may making spouse contributions, or even doing spouse splittings. Things that small decisions now in our forties. But I know we're going to have a significant impact for us going into our fifties, and absolutely even to what you set with yourself from Frank that.

[Anne] Mm-hmm.

[Joshua] decisions we make today about our retirement are going to be absolutely huge. And it comes to, comes to that point.

[Anne] Yeah, regret isn't an emotion I particularly enjoy. And I, I do think in the past as a consequence of my sort of, you know, money, money can mean different things for different people. It can mean security, it can be power, it can mean just, you know, enjoyment. It's probably a bit more enjoyment as far as I'm concerned, that there were some lost opportunities. See, what goes through my head was I've always been so militant about putting on suncream from a very young age. So, that when I'm 65, I've got, you know, protected my, my skin. But then, I'm also thinking about that my bank balance at 65 or my superannuation balance, you know, back all I was just thinking vanity really, and this, and so this is the forties really are, and sounds a bit dire but our last shot to really.

[Joshua] Yup. Yup.

[Anne] Change, shifts the dial in terms of what we want to retire on, because once you get to your fifties, it's really hard to, to change the narrative. There's just, it decreases the time you can take advantage of things like compounding interest for example.

[Joshua] Oh, absolutely. And I completely agree. I think about all the stupid things I did in my twenties. I had fun at the time, but I certainly, wasn't thinking more than probably a month ahead. In my thirties, we were just trying to set us ourselves up, that... But, but I think in your forties, there's things that, there are some things that you can do that as you said, take advantage of those last big opportunities. And I think it's really important to now start thinking about what you're doing this for. Retirement is maybe something that your first, that you're finally allowing yourself to have your first thoughts on, like serious thoughts. It's probably the time where you're thinking seriously about how much is in your soup? And what you want to do with it? And so I think there's decisions, and you've already mentioned you and Frank getting financial advice, and financial advice is something that Tash and I've been getting up for, for well over 10 years now. But getting some financial advice in your forties can really set you up on a completely different paths. And you think about the decisions that can help you make around whether it's your insurance, whether it's your investments, whether it's looking at what you should be doing with your super and how I mentioned.

[Anne] Mm-hmm.

[Joshua] that Tash had a change in her career. And that gave us opportunity to add more to Tash's super. While also balancing that with still paying off the mortgage, paying the school fees and everything else. It becomes, I think too often people think they need to be doing one or the other. And I think the forties is actually time, the time where you think about.

[Anne] Yeah.

[Joshua] how you manage all of those.

[Anne] You've got to walk, and walk and chew gum. And I think, look, I've always been the primary breadwinner in our house and, and Frank stayed home and reared the three children, and is now back working again, which is great. But obviously his superannuation is now just starting to grow. So he's in the position that most women are found themselves in, where they're retiring with a mega balance compared to their male counterparts. And this is where again, I'm sitting down as a family unit and deciding what are the best decisions so that there is, there is the family savings are being maximised. And is it, is it deciding to pay down that mortgage faster? I know at Sunsuper, we certainly project, do a projection on member's annual statements and say, look, you know Anne, when you retire you, based on your current balance you'll be retiring with $30,000. And I guess what, you know, Josh, you know, you and I would say to anyone is look at that rate that number and think, can we live on that number? You know, can we live on that when we retire? Do we like that number? And if we don't like that number, we've got to start doing something about it.

[Joshua] So to that point, and can I, and maybe that's a bit leading for this question, but can I ask you, what is that something that people should be doing? We've talked a bit about what we've done, but if, if we think about you looking after our financial advice that we provide to our members, what are the discussions that people really should be having? Either within their family, or the things that they should be reaching out and talking to one of our advisors or their own advisor.

[Anne] Do you know what my honest reflection is around that, that most of our members, to be honest, wait a bit too late. So they get, they're probably, you know, in five years out from retirement and then, they're going to get financial advice, and then there's some pretty hard conversations being heard about. Well, I know, you know I know Bill, you hate your job and your back hurts. So this is the, this is what it looks like. And if that number doesn't look good, we can take more risks, you can sacrifice more of your take home income to put some money in, or you work longer. And so this is why I guess we're talking about this. Because if, if none of those options are palatable in your, in your sixties, then this is why in your forties answering those questions now about what you do with your savings and cashflow, and where it goes really matters.

[Joshua] Yup, yup. Yup. Well, can I also say, say that I think forties is also when you need to make some decisions as you, you even just alluded to those decisions may be get harder the longer you leave them.

[Anne] Yes.

[Joshua] And it's important to think about that, you've been in a Superfund for decades, you've probably built up quite a substantial amount of super that you may not have even really looked at. And your forties is your.. .

[Anne] I wonder if you even know the balance.

[Joshua] to actually look at your super funds and go. Ah, true. But if the forties is probably the chance for you to go, well what's my super fund offer me? What investment choice do I have? Have I even thought about do I have multiple super accounts that are sitting out there that now it's much simpler to clean up, I know when we're in our thirties, that was more difficult. But I think also looking at the member services, like at sunset, but we have a wonderful mobile app. We have financial advice our members can get access to. That in regards to there Sunsuper account is at no additional cost and and we have wonderful investment performance. I know you talked to Brian about.

[Anne] Mm-hmm.

[Joshua] Which are all great benefits for super funds, but to be frank they come to nought If you don't actually engage with it, if you're not making decisions, or not choosing to use those, those member benefits. So I would encourage that in someone's forties, it's rarely the best time to start holding your super fund to account. To start engaging with them. Downloading the app and engaging with your balance. Knowing what it is to your point.

[Anne] Yes.

[Joshua] But also starting to really look at what you're doing with your investments, with seeking out advice and guidance, and with actually seeking out further re-education.

[Anne] And, you know, just to, to call out to recognising that if people have, if we're not, you know, you might have another fund, for a particular reason, and, or you're thinking about insurance inside of super and or outside of super. These are the things we're working with a financial advisor. Who, you know is not associated with Sunsuper. Who's independent of Sunsuper, but we at Sunsuper again as part of our member services, allow members to pay for that financial advise related to their retirement savings and that, that retirement savings plan out of their Sunsuper account to help affordability and accessibility of advice. 'Cause we know that those members that are in their forties, if they're having question, if they're thinking about, where they consolidate into? Where their SG goes? What voluntary contributions go in? Whether they're taking advantage of any low-income contributions from the government. These are things that you can pay for, with an external financial advisor, and Sunsuper can facilitate that. And that makes it really affordable because I know and Josh knows that, you know, you know too that in your forties, there's a lot of, sort of asks on the family budget. So to be able to fund financial advice associated with your retirement savings out of Sunsuper, is I think it right member service as well.

[Joshua] Anne, can I be just, I might finish on the point from my perspective then, as to my own reflection on me seeking financial advice. And I think that there's a number of things that it does. Obviously it sets me up for the future. It gives me a clear idea of where we're heading, but I think the other thing it's done and I've become more aware of this in my forties, as we've accrued debt with, with our home and, and and other things that I've become very aware that financial advice has meant that I know if something happens to me, or that if something had happened to me it's safe, that Tash and Jonah, that my family is okay. I know that the financial advice we've sought has also set them up. And if something happens to me and that, that is very, very important to me that I sort of know the plans are set and and we check in on those for the future, occasionally. That I also know that it means that set us up very well for the present. Should something happen to Tash or myself, that we know that Jonah, that our family is looked after. And that for me is probably one of the strongest messages I could give on a forties for reflection.

[Anne] And look, that's a very pertinent issue. I, you know, sadly, really good friend of mine passed away recently 48, a heart attack with four children. And, and, and, and this is why superannuation with insurance is so so very important in terms of providing cover for people. But I think too, it's a reflection generally about money and that there is a, you know, there's a point there was some studies done and there was some, there's a point where money no longer makes you happy anymore, but money there was a point where money does make you happy because that money gives you a sense of, security to your point earlier, and options, and enjoyment. And so I think again, while I, I think advice is really important is that there's no point saving it all. You know, you can't take it to you. I can't take it, take it with you to the cemetery, so to speak. And, and we all worked really hard. So striking that balance between making some really good decisions for the now, for your family, and for your future self in retirement. It's a balance and it requires choices. And, and that's why I think getting advice and having and educating yourself is all part of that what you need to do in your forties. [Crosstalk 00:18:25] .

[Anne] I'm sorry, can I make one confession? Can I make one confession that we were.. .

[Joshua] Absolutely.

[Anne] going to go to Germany, but couldn't to see Frank's parents. And so we decided, we could have put the money into super, but we blew it on a pizza oven, and it brings that family much joy. So it, you know, there's, there's, you know it's all about choices. It was an informed, considered choice that we decided to build a pizza oven.

[Joshua] That and I even think about the renovations at the moment. So this additional equity that we've got sitting on the home, but my wife realises the value in building me an art studio, that she can kick me out into.

[Anne] Yup.

[Joshua] So yes, choices are important.

[Anne] You only live once.

We'll look it up. Yeah. So what's your final message, I guess to our members, you know, who are in their forties or maybe other members who are listening to this today what's your number one takeaway for them?

[Joshua] My, my number one takeaway would be to absolutely engage with your super. I think, know what your balance is. For a start, know where it's heading. And what that's going to give you? And know how it's invested. I'd I think, as I said earlier, superannuation funds now give you amazing tools to actually have tangibility of your super that way didn't have when we were in our twenties and thirties. So now is a really great opportunity. I would suggest that, that you engage with your super and know where it's heading and start to see whether there's those adjustments that you can make and do need to make that stop. You having to make those hard decisions later in your fifties or into your sixties.

[Anne] Yeah, I think that's, yeah, that's, [Crosstalk 00:20:06] .

[Joshua] Yours?

[Anne] Very practical. Very practical advice for those members who haven't, who aren't getting advice and are starting from scratch, downloading the app, or logging into a member online, and actually just having a play. Well, I can guarantee you peak your curiosity and interest and then that will just build and and great things will come from, for your future self, from that gesture. So, Josh it's, thank you for that little fireside chat about our families and money. It was fun.

[Anne] Anne, can I say, Anne for two people in our forties, I think we're actually looking quite good from a young age.

[Anne] We're fabulous. Just ask us all about it. We'll tell you everything.

[Anne] So look, yeah, we, did I... We, I think we're really privileged with, you know as you, as you rightly point out happiness is everything. And so we encourage all of our members to make the most of life, make the most of your super. Thank you so much for tuning into the New School of Super. We hope this helps you engage with your superannuation with Sunsuper. And as Josh said, call us on 13-11-84. If you ever want to have a chat about your retirement savings. Thanks for listening or watching.

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