Talk Investing Podcast
The Talk Investing Podcast & Blog discusses investment advice from our previous podcasts and radio shows by Remo Greco & Marco Mellado. Learn all things around retirement and investing.
Talk Investing Podcast
Retire With Confidence
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$700,000 to retire comfortably as a couple? For plenty of Australians that number sounds either reassuring or impossible, and the truth depends on the assumptions hiding underneath it. We break down the ASFA Retirement Standard and translate it into the everyday costs retirees actually face, from groceries and utilities to cars, holidays, and the difference between a modest retirement and a comfortable one.
We also tackle the question people ask when they’re over work: what if I want to retire at 60, not 67? We talk through the “gap years” before the Age Pension kicks in, and the practical ways to fund them, including easing into retirement, using a transition to retirement pension, or drawing on super earlier with a clear plan. Along the way we cover the boring-but-critical foundations like clearing debt, creating surplus cash flow, and building two buckets of wealth inside and outside superannuation.
Listener questions take us into the details that can save you real money: tax-deductible concessional contributions, what’s actually refundable for low-income earners, and whether it makes sense to live off cash first and preserve super. We also dig into the big emotional one: property and retirement planning, including when holding an investment property helps, when selling and contributing to super might improve long-term income, and why SMSF property borrowing can be complicated with small balances.
If you found this useful, subscribe, share it with someone planning retirement, and leave us a review so more Australians can find the show. What’s the one decision you’re stuck on right now: your retirement age, your super balance, or your property plan?
DISCLAIMER: This podcast contains general financial information only. That means the information does not take into account your objectives, financial situation, or needs. Because of that, you should consider if the information is appropriate to you and your needs, before acting on it. If you’re confused about what that means or what your needs are, you should always consult a licensed and trusted financial planner. Unfortunately, we cannot guarantee the accuracy of the information in this podcast, including any financial, taxation, and/or legal information. Remember, past performance is not a reliable indicator of future performance. The Rask Group is NOT a qualified tax accountant, financial (tax) adviser, or financial adviser. Access The Rask Group's Financial Services Guide (FSG): https://www.rask.com.au/fsg
Welcome And Today’s Big Question
SPEAKER_00The Talk Investing Podcast and blog discusses investment advice from our previous podcasts and radio shows by Remo Greco and Marco Melado. Learn all things around retirement and investing.
SPEAKER_03On the money. Eight past ten. We're doing on the money right now. And last time Marco Millardo, our superannuation specialist, was in. We asked the question, How much do I need to retire? We are going to do part two of that. And we are taking your questions 1-300-222-774. Anything we share here is general in nature, doesn't take into account your personal circumstances, financial situations, or needs. Hello, Marco. G'day, Lisa. Nice to be back.
Christmas Lunch Shockers From Callers
SPEAKER_03Christmas lunch, do you host or are you a guest?
SPEAKER_02Hosting twice this year. One for my side and then one for my wife's side. So it's sort of back to back.
SPEAKER_03And are you usually hosting or is this new?
SPEAKER_02No, we rotate. So that gives everybody a break. But this is a big one. This is two in four days.
SPEAKER_03That's a lot.
SPEAKER_02It's uh it's a bit.
SPEAKER_03And do you have any particular things that you do in terms of requirements for your guests?
SPEAKER_02Uh I think everybody just enjoys a big meal. So we make sure we do a really big barbecue. We're not really traditionalists, we haven't got the turkey or the ham, but we do a really good spread of seafood and some barbecue, and everyone's pretty happy.
SPEAKER_03Do guests need to bring anything?
SPEAKER_02Yes, everybody is assigned something from my wife, so it's all very well set out.
SPEAKER_03I have a feeling that's a good thing assigning. And anything that's ever shocked or surprised you in terms of what people have rolled out.
SPEAKER_02No, I was thinking about this. No, everyone's been pretty good. There's the salads and the desserts and the you know, sometimes the uh the entrees. It's pretty good. I think everyone's been pretty spot on.
SPEAKER_03But this has not happened to everyone, including Marilyn. Hello, Marilyn.
SPEAKER_06Good morning.
SPEAKER_03So what has happened that has shocked and surprised everyone at Christmas lunch?
SPEAKER_06Well, it wasn't actually my family, but a family that I knew had a mother-in-law who really didn't ever make any contribution to the Christmas lunch. But one year she said, Oh, I'll bring a chicken. And they all nearly died of shock. But didn't actually rely on her for the food, which was very fortunate because she walked in with a frozen chicken. What? A frozen chicken?
SPEAKER_03Wow. You know, like I'm pretty slack when it comes to cooking, but I haven't actually ever brought a frozen chicken along. Marilyn, that is fantastic. And you are in the running for the double pass to the Melbourne Recital Centre, which I will say now, I have performed at the Melbourne Recital Center with the 774 band. We do that on Friday, so we can say that from now on. Thank you, Marilyn. All right, Roz, it's your turn now. We're talking about Christmas lunch, and when a guest has brought something shocking or surprising, Roz. Hello.
SPEAKER_04Thank you. Hi, Lisa. Thank you.
SPEAKER_03Yeah, pleasure, Roz. Uh, far away.
SPEAKER_04How's this? How's this? We had some very well-healed guests and they didn't want to participate, so everyone was asked to bring something and they brought very low, low, low priced bread. That was their process.
SPEAKER_03Roz, was it dis was it discounted bread? Like, did it have the sticker on there?
SPEAKER_04Well, almost. And you know what else? A family member bought a very bad temper. And I had to ask one of my guests to save me. And she's 5'4, and I'm 5'11. So she would appear all of a sudden.
SPEAKER_03Like an angel, a very short, beautiful angel to save you, Roz, uh, bringing not only cheap bread, but a bad attitude as well. Can you top that? We'd love to give you a double pass. You're in the running, Roz, uh, to the Melbourne Recital Centre, uh a fantastic concert there. As a um producer Chris, we'll announce it at the end of
Modest Versus Comfortable Retirement Budgets
SPEAKER_03the show. All right, Marco, let's get cracking now on superannuation. So, how much do we need to retire? Do you want to recap for us?
SPEAKER_02Okay, let's do uh a bit of a summary. So the a group called ASFA, the Association of Superfunds of Australia, does some modelling for us. So we're pretty lucky, not for not for us in particular, but on their website for everybody to access. So the common questions around retirement are always generally, how much do I need? So what sort of savings do I need to have by the time I retire, and therefore how much can I spend? So they're taking, trying to take some of the guesswork out here. And so they do pretty detailed budgets of what they think retirees normally would spend in a, you know, what that what they consider a pretty normal retirement, and they break it up into two categories, one being called modest, which is really not that far above the age pension, so it's very modest, I would say. And then comfortable, which should give you a pretty good lifestyle. And so they're saying if we're a couple and we want to live a pretty comfortable retirement, you're going to spend about $75,000 a year after tax in your hands. If we're single, we're going to spend about $53,000 a year. If we're only going to what we think achieve is a modest retirement, so that's a little bit above age pension, those numbers drop pretty significantly. So if you're a couple, we're down to about $50,000, so that's $25,000 less. If we're single, we're down to about $35,000. Again, so that's almost $20,000 less. What makes all of that up? It's pretty similar in terms of the budgets. You just have a bit more for everything. So you have a bit more for groceries, you have a bit more for mobile phone, internet, car, uh, the holidays a little bit. Holiday fancy. The modest has a domestic holiday built in. Comfortable does as well, but you've just got a bit more for it. The big difference is there are no overseas holidays. They uh assign to the modest retirement, and they assign one overseas holiday to the comfortable lifestyle, which is about every six or seven years. So that's the real big difference that I could see. Everything else is really pretty similar. You're just able to buy a higher standard of it, if you like, or a
The $700k Benchmark Explained
SPEAKER_02higher quality.
unknownTrevor Burrus, Jr.
SPEAKER_03And so how much do we actually need to have a on retirement?
SPEAKER_02Yes, so this number's probably a little bit lower than a lot of people think. Uh and so for a couple, we're making some assumptions here. So we're assuming we retire at 67, we're a homeowner. They've done separate numbers for renters, uh, and all of our money is is exhausted or is gone by about age 92. So they're saying what you need is $700,000 combined as a couple. Now most people would say that seems a bit low. I thought it would have been a bit more than that. But we've got to remember that money is earning every year. So you're not just starting at $700,000 and dwindling it away each year as you draw your pension. You are in fact earning some investment income on that or some capital on that. And that's set at six percent per annum in their assumption. So $700,000 for a couple, for a single person, it's about six hundred thousand dollars, so it's about $100,000 less. If we go and look at the modest numbers, they're saying Anna need about $100,000 because the age pension will cover most of what you need.
SPEAKER_03Yes.
SPEAKER_02And then you're just drawing very small amounts every year from that hundred to top up.
SPEAKER_03Okay, let's
Retiring At 60 And Bridging Years
SPEAKER_03go to your questions now. $1-300-27274 is the phone number or 0437-774-774 is the text line. We are talking how much do I need to retire? I'm going with this one, Marco. Hi guys. If you need $700,000 to retire comfortably at 67, how much do you need to retire? At 60 years old for a couple, no mortgage.
SPEAKER_02Okay, good question. So to get that answer, we'd need to do a bit of modeling, but we can give you an idea about how to think about it. So that's an extra seven years you need to fund. And each year, ASP was telling us you're likely to spend about $75,000. So $75,000 times seven years, let's call that about half a million dollars, about five hundred thousand. But of course that five hundred is earning some income and some return during those five years, so you probably don't need all of that. This is a very, very long guess, but I would say probably an extra three hundred thousand or so would see you uh through that period pretty well.
SPEAKER_03All right. Uh Susan in Mount Wallace is saying the singles the singles figure is above the minimum wage. Many people can't spend that much before retirement. Um sorry, what does she mean by that? Uh I'm not sure. Oh okay. Yep. Uh Susan, sorry, further and better particulars. I didn't quite get that point. Uh good morning, writes this texture. I've been advised by my accountant. If I make a lump sum payment into my super, say fifteen thousand dollars in this financial year, I will then receive a better return at tax time. I'm working full-time and have two hundred and forty thousand dollars in super. I'm 60 years old.
SPEAKER_02Ah, so this sounds like your accountants suggesting you make a tax-deductible contribution, or they're called concessional contributions. So if you contribute that $15,000, you can claim a tax deduction for that. So what that means is you pay less personal income tax. So that's kind of where you get your return at tax time. You just pay less tax.
SPEAKER_03It is 18 past ten on ABC Radio. You're with Lisa Leong and super specialist Marco Millardo. We're inviting your questions. We're talking about how much do I need to retire? And we will continue the conversation after this.
SPEAKER_01And this could get on. Wednesday, join ABC Sport for the third ashes test between Australia and England. Hear every ball of the cricket all summer long. The Ashes. On 774 ABC Radio Melbourne.
Funding The Gap With Super Strategies
SPEAKER_01On the money.
SPEAKER_0318 past ten. We're talking about how much do I need to retire with Marco Millado, a superannuation specialist. And we're taking your questions. 1-300-22-774-04-37-774-774. Marco, any strategies for someone who would like to retire at age 60 by claiming their super but unable to claim a pension until 67?
SPEAKER_02Ah, so this is about funding the gap. So age pension eligibility is now age 67, but you can start to access your super from age 60. Now you do need to meet some kind of condition to access it, like either retirement, for example, uh or or ceasing a job, not necessarily retiring, but ceasing a job, or commencing what's called a transition to retirement pension. So there's a few things you can do. A, you can gradually retire. You don't have to, you know, formally retire all at once. Perhaps there's an option with your employer if you're self-employed to just reduce days of work, reduce hours of work. And so that means if you've still got income coming in until you wait for the age pension to kick in. You can do a transition to retirement pension, which is using your super as an income stream and starting to draw some money from that. Again, that will let you slow down work-wise, because what you lose in income and salary you'll replace via the the super pension. Or if you actually just want to completely stop, then you do have to access your super and tap it for whatever's required until we get to 67, and then you can you can have those two income streams coming, which is super and age pension.
SPEAKER_03And Marco, if we are sort of doing the sum, so we've decided we'd like a comfortable lifestyle, um, we think, okay, so we've need 700,000, say, in at retirement age, then what are we doing now?
SPEAKER_02Oh, well, okay. So we're doing things like making sure we're clearing debt appropriately well before retirement. So debt's just an impediment at retirement. It's just money that's going out to make repayments that isn't doing anything for you. So we want to clear debt. We want to have savings capacity, so it doesn't happen unless we have some savings capacity, and that is surplus cash flow. So we want to be directing as much as we can to super using the limits. If we're maximizing that limit and we've still got some surplus cash flow, we want to be doing an investment outside of super as well. So we're growing two pools or two buckets of investments there. And if we can do that from an early enough age, we've got a pretty good shot at those savings with investment returns, getting us a pretty nice lump sum by the time we want to start uh the retirement process.
SPEAKER_03Karen has called through on 1-300-272-774 with a question for Marco Mulato, our super specialist. Hello, Karen.
SPEAKER_05Hi, Lisa and Marco.
SPEAKER_03I like your programme. Listen to you every week. Thanks, Karen, and a Merry Christmas to you, by the way.
SPEAKER_05Merry Christmas to you to you both as well. Thank you. Uh my question is um I'm 67 and I've got cash in the bank. Can I um use that cash first before taking the super? Do you have to take the super if you retire at 67?
SPEAKER_02No, you don't actually. So your super can stay there in its form for as long as you like. There's no it used to be there used to be this called compulsory cashing, right? Where you had to use your super at a certain age. That's no longer in place. So your super can remain just as it is for as long as you like. And so it it's a very common thing if you have cash outside of super to actually use that first and then go to your super fund because it just preserves your balance.
SPEAKER_05I thought you in the past you had to use it, didn't you? It was in the past.
SPEAKER_02It was many, many years ago, it's probably a decade ago or longer now, and it was called compulsory cashing. At sixty-five you had to start to do something with it. That's now gone. And so you can, for want of a bit of a term, just leave it there, right?
SPEAKER_05And so that's good, because I've got shares as well. Because my plan is to live on the the cash and the shares, and when I need the super, then I would just get so much out per monthly.
SPEAKER_02So there's no Yeah, so that's not a bad strategy, and people do that. The other thing you can think about is contributing those shares and that cash into your super fund.
SPEAKER_05Right, okay.
SPEAKER_02So that's worth thinking about. You need to think uh you need to go through what capital gains tax you might have to uh navigate. But often getting as much as you can into super is a great strategy because once you then retire and commence a pension, that superfund you have becomes a tax-free environment. And so all of your earnings, all of your capital gains, all of the interest, all of the dividends are just tax-free for life. So it pays to get as much in as possible.
SPEAKER_05Yeah, no, that's good to know. I already put money in um super after um tax per per year.
SPEAKER_02So that's good. So the limits are pretty big, so you might be able to do a bit more. Um or in some cases the shares that you have can be transferred what's called in-species, so you don't have to sell them, get the cash, put the cash in. You can actually transfer shares directly into your fund if you have the right type of super fund. That can help.
SPEAKER_05But you still got capital gains.
SPEAKER_02Still got capital gains, but it just avoids sale, brokerage, being out of the market, buying at different prices, etcetera.
SPEAKER_03Thank you, Karen, for your call on 1 300 272 774.
Tax, Low Income Refunds And Limits
SPEAKER_03Uh, Maddie has got a question for you. So on the text line, I understand that super funds impose up to 15% on earnings on monies in accumulation stage. This is taken out by the fund and paid to the government and does not appear on statements. I asked my industry fund how much they've taken out from my money and could I get back from the government as I am a low-income earner and don't pay income tax. The call center person had no idea what I was talking about. I'm unable to get clarity. Marco, can I get my 15% tax back?
SPEAKER_02Yes, okay. So there the there's a lot in there. So yes, the caller is absolutely correct. The earnings on super when you're saving are 15%. That's a pretty low tax rate, right? So, you know, for every hundred dollars, there's fifteen dollars, every hundred dollars earned, there's fifteen dollars that goes out in tax to the ATO. There is an ability for low-income earners who earn $37,000 or less to get a refund of that contributions tax. And uh I think it happens automatically, but I would check with your accountant when you lodge a return if you lodge a return. Uh but if it's automatic, it's already happening. So your tax return is being adjusted. So it's essentially the government saying to you, you're a low income earner. It's probably not fair that your contribution gets taxed at 15% if you're on a zero tax rate. So we're going to just refund that contributions tax. Now that is for contributions, not earnings. So here we're talking about earnings. There's no way to get that earnings tax back. If that makes sense. So we're separating earnings and contributions here. So the contributions you might make, yes, there's an ability to get that. And they're both fifteen percent tax rates, which makes it confusing. But if we contribute some money and we're a low-income earner and that fund takes out the 15% contributions tax, you can claim that back.
SPEAKER_03Trevor Burrus, Jr.: And should it be on some statement somewhere, Marco? Or no? No, it won't be on a statement.
SPEAKER_02It's all just washed up in your tax return and just happens automatically.
SPEAKER_03So it's even a question for your accountant if you use one.
SPEAKER_02Trevor Burrus, Jr.: Now that's uh you if you use one. Now that's contributions, but we're talking about earnings here, so I just want to make that point. So you can on contributions as a low-income earner, and that's maybe what the call is talking about. Not on earnings inside your superfund, which is called earnings tax. Nobody can claim that back.
SPEAKER_03There's a comment here from Watto and Gisbin. Need to keep in mind the numbers that you were talking about, you know, the comfortable retirement ASFA numbers, is it's an industry body, no objective being to keep you with them, uh provid that with no what? With profits? Okay. Trade your own path.
SPEAKER_02Trevor Burrus, Jr.: All right, let's clear this up. So that's this is actually not an industry uh super fund-related body. This is an independent body, not for profit, that's been established for the whole superannuation industry. So there's no link to any particular type of fund. It's a good body that does really credible, legitimate work.
SPEAKER_03And the they have where did they get their data from, I guess, to figure out this comfortable lifestyle, modest lifestyle they've got. Okay. And hi Lisa Ramarco, I'm 68. I have $500,000 in super. I'm single, but I only have $70,000 in the bank, and I have an investment property worth $280,000. I still work part-time. What are your thoughts about retiring at $70,000, selling the investment property? I've also just transferred a property worth about $500,000 to a family member. I presume no pension for me.
SPEAKER_02Yeah, so unlikely to qualify for age pension on that because we have too much in assets as a single person. Uh selling the property, so I think I think there's enough assets there. You know, I don't know how much you want to spend in retirement, but there's a there's a bit there, so there's probably $850,000 you can use. So that's above ASFA's estimate for a couple. You're single. So I think you should do pr do pretty well. Should you sell the investment property? That's really a decision you have to make around is the property any good? Is it going to grow in value at the at an appropriate rate? Can you increase the rent appropriately? Like is it just a good investment? If it is, you'd probably keep it. If you don't think it's got the uh the legs to keep going, you could sell it and then make a nice contribution into your super fund, get that bigger, and have a nice big tax-free pool of investments.
SPEAKER_03Thank
Property Plans And SMSF Reality Checks
SPEAKER_03you. And this one, okay, so I'm an electrician, writes this texter, thirty years old. I've just over seventy thousand dollars. Is that in super? I presume that's in super. And and from a farming family. I'd like to transition to the farm eventually. Would this be a viable amount to invest uh in a self-managed fund for farm property, especially since they have a heart condition, unlikely to live past sixty?
SPEAKER_02Uh okay, so that is uh covering a lot of different areas. So we'd need to know a bit more, but if we're looking at $70,000 perhaps going into a self-managed fund to buy some farming property, we're gonna need a pretty big loan. Because $70,000 isn't gonna get as much. So you'd have to look at what's called a uh a limited recourse borrowing arrangement in a self managed super fund. They get very complicated and you've got to make sure you get good advice here. But often with such a small deposit, we might struggle to get a lender to lend you enough to get the property. So it might be a bit tough.
SPEAKER_03All right. Uh Tamara has called in. Hello, Tamara.
SPEAKER_07Oh hi, thanks for taking my call to both of you. Um I'm in Carlton North. I've got had a sort of a mixed financial history. Um I think I'm doing quite well, but it's it's not perfect. I had some um uh financial abuse and lost a lot of money in my 30s. I'm 56 now. I've had a drop in income due to an injury, and I'm wondering what to do with the things I've got. I've got I've got my own home, so that's great. I've only got about $150,000 in super at age 56, but I do have a property in there that's worth maybe $400,000. Um, and the other thing I've got is an investment property that I will hopefully pay off by the time I retire. That is going to be that'll be worth about $500,000. And because I don't have much cash in super, I'm wondering, do I hold that investment property and try and use it as an income stream? Or do I sell it and put it into something else that I can draw down? Because I don't think there's any way I can get that much money into my super. It'll be taxed a great deal. I think over and above the 30,000 I could put in and get a tax benefit. So I'm just wondering whether I live off that as a private income stream because I don't think I can advantageously sell it and put it in my super fund or transfer it to my super fund.
SPEAKER_02Uh okay, so there's a there's a bit in there as well. So I would be thinking about that property and what the net rental would be to you. So you probably have to do some sums here. But the important thing if we're thinking of keeping or trying to assess whether to keep this property in retirement is understanding what the net benefit is to you. So you know the rent comes in, you then need to subtract all of the holding costs and perhaps perhaps any tax if you're going to be in a taxable position, but in retirement unlikely. And then and then you'll understand what the net rent is to you. And you say, right, is that with whatever else I have going to be enough for me? It's often not because properties just have a lot of holding costs.
SPEAKER_07So it won't be, yeah.
SPEAKER_02So what we see a lot of is properties being sold. You'll need to do a capital gains tax calculation to understand what that will be. But properties being sold and then those proceeds contributed into super to bulk up the super fund. And then we know that the super fund can invest in a whole range of things. It doesn't need to be one property, it can be a whole range of assets that will lift the income.
SPEAKER_07Right. I mean if I yeah, if I I would think that true, but if I do sell it and then I'm paying capital gains and then again I'm paying um tax as con when I contribute it to the fund, isn't that going to eat away terribly at whatever I get from the sale?
SPEAKER_02So the capital gains tax will, that's why it's important to do that calculation, because you wanna you wanna sort of make that back, right? So it's a it's a cost of the transaction. But the benefit is the money is then in your superfund for the next thirty years plus in an environment where it's not being taxed in retirement. So you probably make that back fairly quickly. Money going into the superfund as a contribution, that won't be taxed. That's called an after-tax contribution. So the only contribution that's taxed is the one that has that $30,000 limit. Now, you may use that to your advantage because if you have a large capital gain, you might want to contribute the whole $30,000 because it's a tax deduction to you. So it will reduce the amount of tax you pay, and then the rest of the proceeds would go in as what we call a non-concessional contribution, and there's no tax on that at all. That just goes in as cash. And so that's gonna bulk up your nest egg. It's gonna be in a better environment instead of your name, it'll be in a super fund's name. It'll be tax-free in retirement, and you won't have you know just this rental inst in in income stream coming in. You'll have a portfolio of assets that's gonna lift the amount of income you can get out of that superfund. It'll put you in a better position.
Wrap Up And What Comes Next
SPEAKER_03All right. Thank you, Tamara, again, for your questions. Thank you, everyone, for calling in today. Marco, we got some tricky ones, didn't we?
SPEAKER_02Yeah, I think the list is still pretty long.
SPEAKER_03So I think we're gonna have to go 2026. It continues, yeah.
SPEAKER_02Love to do it, Lisa.
SPEAKER_03Well, have a great summer break, Marco. You've been absolutely brilliant this year. We all love you very much. Love it, Mr. Thank you for bringing your super brain to those super questions. All right, that's Marco Millado. He'll be back with you, don't worry, with superannuation next year when we return and do on the money.
