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the new school of super podcast series

Episode 15

Three things to fast-track your super this new financial year

July 2019

Is this financial year the one you'll make sure your super is on the right track to help you achieve your retirement dreams? Sunsuper's Dream Team shares three simple steps to get your super revved up today so you can be ready to ease back in the future.

Intro: Welcome to the New School of Super. A fresh look at money matters, your super and the things that could affect your financial dreams now and in future with Sunsuper's Chief Economist Brian Parker and Head of Advice and Retirement Anne Fuchs.

Anne Fuchs: Hello and thanks for listening. Welcome to the new School of Super, Sunsuper's podcast series, covering investment markets, money matters, your super, and most importantly, making sure you achieve your retirement dreams.

With me today is our Chief Economist, Brian Parker, from Sunsuper. He's an extraordinary man, he knows so much about investments and the like, and how to build investment portfolios, and today we're going to be talking all about getting financially efficient in the new financial year.

For those of our listeners who don't know me, my name is Anne Fuchs and I head up Advice and Retirement, and our team, we're all about making sure our members fulfil their retirement dreams, and I guess I'm incredibly biased because it's not just investment markets that make sure you live your retirement dreams. It's great quality financial advice as well, so, Brian, it's good to see you!

Brian Parker: Great to be here again with you. And as always, before we start quick word from our sponsors, we need to know that we're going to talk about…

Anne Fuchs: Compliance?

Brian Parker: Yes, exactly. We need to let people know that what we're going to talk about today is general information only. Any advice doesn't take into account your personal situation. You should consider your circumstances and think about getting personal advice before acting on anything we talk about today. You could also get a copy of our product disclosure statement from our website or give us a call on 13 11 84.

Anne Fuchs: So Happy New Year to you. I cannot believe we're - it's winter. I don't understand where the year has gone, and I feel like as I age, the year just speeds up. I don't know if you feel the same, Brian.

Brian Parker: I have done for years because I'm older than you.

Anne Fuchs: And it was only your birthday recently and you would be thinking -- are you paying attention to your super Brian?

Brian Parker: I am. I am.

Anne Fuchs: because we are here today to talk about what's really important when you're paying attention to your super and so, are you - you're not one of these, you're not a smoking cardiologist or a plumber with leaking taps?

Brian Parker: No, I'm not. I do actually pay a lot of attention to my super, but I also invest in the same superannuation that our members do. It's important for the job I do that we have to eat our own cooking,

Anne Fuchs: You eat you your own cooking - as do I. And I think for our listeners there is a simplicity to this. There are three key rules. That simplicity that this to get it right. And it's not rocket science. Actually, the heartbeat is just getting off your behind and doing it and taking that first step. And so, what Brian and I wanted to talk about today is, what are those three things so that you can sense, you can feel motivated to do it yourself. So, the first one, you need to look at your super when you superfund emails you your annual statement, open it up. If it's a letter or an email, don't delete it or throw it in the bin with the envelope closed. Open it up.

Brian Parker: I couldn't agree more, and actually, I hear a lot of people say "oh, but I don't want to, it's too much to read", and I always come back and say, tell people "look, it's your money. Read it. It's not their – we don't put it out there for our own amusement". We put it out there because it's important. So always remember, this is your money, and we should really get involved in in actually making sure it's invested properly.

Anne Fuchs: I mean, I think, too, that this might be more so with women than men and that they don't want to open it up because they're quite frankly depressed of what the number that they're going to see on the piece of paper. And so, the sort of the head sticking your head in the sand mentality if I just sort of closed. If I don't open it up, it's not really and it's not there. But in fact, that's actually the wrong approach. Because if you open it up and actually just accept the number for what it is, and then actually put up your hand and say ‘How long? What do I need to do? How long is this going to last in retirement? What more can I do?'

Brian Parker: Absolutely. And the second thing that we want -- a second key message we want to get across is that we need people to actually pay attention, to how the superannuation is invested and also, related to that, to make sure that the way their super is invested is right for them because everybody's different. Everybody has a different appetite for risk. Everyone's at a different phase of life. Everyone has different financial needs and goals. And so, we need to make sure that the way our super's invested is actually right for us. And again, it's not easy to do on your own, but certainly on the Sunsuper website, for example, is a whole heap of tools on a whole heap of things you can use to help make sure that the investment option you have is the right one for you. And I always say to people that may be the best guide. If you think about what kind of investor am I and how, how willing and am I to take risk, I apply what I call the sleeper dye test. If you're doing something with money which is causing you to lose more than about two minutes of sleep at night, then you're taking too much risk.

Anne Fuchs: So sleeping at night can never be overrated.

Brian Parker: Yeah, that's right, and especially when you get into, as you approach retirement and especially as you enter retirement, because one of things we find is that if you're unlucky enough to encounter a major share market downturn, for example, just before you retire or just after you retire, that can do some serious damage to your retirement dreams. And so that's why, for example, if you're invested in Sunsuper's default option the lifecycle strategy, what we do for our members in that strategy is that we very, very gradually reduced their exposure to growth assets such as shares for the ten years leading up to their retirement or ten years leading up to age sixty five. And we do that very gradually because we don't want our members of retirement to be ruined by major stock market downturn just before they go to retire.

Anne Fuchs: No surprises. No one likes surprises when it comes to money.

Brian Parker: Correct.

Anne Fuchs: So I think it's worthwhile pointing out too, that there's a raft of other different investments, aren't there, Brian?

Brian Parker: Well, that's right, and we end up -- we offer twenty investment options. Basically, overwhelmingly, Sunsuper members tend to be invested in the lifecycle approach. That tends to be the default option for most of our members, but we, as I said, we do offer a range of other investment options, and this is really where financial advice becomes so much more important. And I know there's something you're particularly patient about.

Anne Fuchs: Well, certainly we know that our members who have sought advice are much, much better prepared for their retirement. And certainly, I believe you go to work hard every day. This money's getting put away for you. You're…you must do your bit to make sure you're maximising every bit of those retirement savings, so that when you are retired, you get to have get to have the life you deserve. And advice is one of the most powerful enablers towards that. You know, besides the fact that you actually end up with more money there's a - we have proven that through some research the value of advice research, which you can find on the Dream Project website, and there are a number of case studies that show the numbers and the strategies, to prove you wealthier, which is great, but also too there's a whole lot of - to your earlier point Brian, about the sleep at night factor -because we know money causes mental health issues, relationship strains, and just self-esteem issues in their own right; and the research that we undertook was very clear that our members - eighty percent of members had confidence once they had financial advice, they actually could make informed decisions about their money, and they weren't second guessing themselves. And I know, I'm sure there's many people who listen to this podcast that second guess themselves when it comes to money. And it's not a good feeling.

So I think we've got so the lessons today, Brian, if I can recount them; so the first one: open your annual statement.

Brian Parker: Have a look, exactly; open your annual statement. Two: find out how your super is invested and make sure that the way it's invested suits you, make sure that the way it's invested is right for your particular needs.

Anne Fuchs: And lastly, pick up the phone and call us to see whether you could benefit from some high quality, trusted financial advice. I promise you, your future self will be incredibly grateful when you were drinking a beautiful quality of red as opposed to a cheap bottle of red or going on a great holiday, as opposed to one locally that you've gone to for years and it's getting a bit boring, promise me, that's my final words to the listeners, I say that with conviction and Brian, it's been great. I bid you farewell.

Brian Parker: Thank you again and we'll speak again.

Anne Fuchs: Speak again. Thank you, listeners.

Outro: This has been the New School of Super. For information and inspiration to help you plan your future, manager Super, and enjoy your retirement, visit sunsuper.com.au/thedreamproject. Or if you've got a superannuation or investment question, you'd like Brian and Anne to discuss, then get in touch at newschoolofsuper.com for it feature in one of our future New School of Super podcasts.

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