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
You Can Still Invest For Growth After You Retire
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A dentist offering “interest-free” payments sounds like a win, until the deal includes a caveat on your home. We unpack a real listener question about funding a major dental bill while living on a retirement income stream, and why the safest choice is not always the one that chases the best return in super. Along the way, we talk about short time horizons, market falls, and how quickly a clever plan can unravel when investments do what they do.
We also clear up some of the most common superannuation rules Australians trip over: when super withdrawals become tax-free after 60, what happens when you start a super pension income stream, and why the 0% tax rate in pension phase is one of the biggest benefits of retiring with super. We explain Transition to Retirement (TTR) pensions in plain language, covering what they are designed for and why they are usually more about cash flow than tax tricks.
Then we get into the investing side, including ethical investing inside super and the practical limits of fund disclosure, plus a lively debate on why some super funds automatically shift members into conservative or balanced options as they near retirement. Sequencing risk matters, but so does growth when retirement can run for 25 to 30 years. We discuss more flexible approaches like bucketing, beneficiary tax on super death benefits, missing employer contributions, and what to consider with downsizer contributions.
If you want clearer retirement planning, smarter super decisions, and fewer nasty surprises, press play. Subscribe, share this with a mate who’s approaching retirement, and leave us a review with the one super question you want answered next.
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 Retirement Basics
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_02On the ABC Listen app, your smart speaker.
SPEAKER_04And on your radio. 774 ABC Radio Melbourne and Victoria with Alex Pert.
SPEAKER_05On the money. When it comes to planning for our retirement, knowing the ins and outs around managing our super and maximising return can be daunting. We often ask ourselves, will I have enough? And what can I do now to ensure that I do? Now remember, anything we share here today is general in nature and doesn't take into account your personal circumstances, financial situation, or needs. Nice to be with you. Good to meet you. So what should people be thinking about, regardless of where you are? Perhaps you're about to retire or perhaps you're at the beginning of your career. What are some general things right with the kickoff that we should be thinking about?
SPEAKER_01Sure. So there's there's a bit in that, but I think the the uh the mind automatically goes to superannuation because that's the you know, that's the sort of legislated retirement nest egg that we all want to build, and and that's a that's a key focus, and we should definitely be thinking about that and all of the rules and regs and how to build that nest egg. But I think there's some other things that are pretty important, like just starting to educate yourself a bit about the tax rules, the uh investment environment, the superannuation rules, obviously, starting really early to plan about this. So let's not leave it to where 60 or 65 to then start thinking about things. Think about your non-superannuation position as well. What sort of debt do we have? Do we have insurances in place, like life insurances we need to consider? Start thinking about what retirement will look like. So what about what are we what are our spending habits going to be? Are we gonna travel? Do we have any large expenses we need to cater for? So there's a bit to to start to get your head around, and that's why I think we need to do it early and then refine as we get closer. And you know, education's a big part of it. I think you really need to have a bit of know-how around what you're doing. And if if that's not something that you feel confident about, then that's the time you start to think about engaging a a good advisor for you.
SPEAKER_05We have a caller waiting on the line for you, Marco.
Start Early With Super And Tax
SPEAKER_05We have Amy. Uh Amy, you have a question for Marco?
SPEAKER_07Yes. I am living off a retirement income stream, but I have a fifty thousand dollar dental requirement. And the dentist has said to me that they can I can pay 50% up front and 50% interest free over three years. And I just want uh they would put a caveat on my house. I own my house. I can pay afford to pay the $50,000. But I'm thinking, is it better for me to keep that $25,000 in my super because the interest at the moment is so good as well? Or and just pay off over the three years or less? Or or is it better to have that caveat put on my house? What are the implications of having that twent caveat to the value of $25,000 over my house?
SPEAKER_01Uh okay, so there's a there's a bit in that. That's an that's an unusual request, I must say, from a dental practitioner, but I guess uh in the hopes of being able to help you pay for that. So the impact of a caveat on your house is essentially if that if that money that you owe the dentist isn't repaid, then they do have a charge or a right over your home. So it's a pretty serious uh you know financial arrangement that they want you to enter.
SPEAKER_07I think if you I do own my own home and I can afford to pay that twenty-five at any time.
SPEAKER_01I I would be leaning towards uh if you have the means and the ability to actually just paying that amount and not having a caveat on your house at all, because the other side of the coin is whilst returns in superfunds uh for the last couple of years have been really strong, that's not to say they're going to continue. So you might want to maintain this money in the superfund in the hopes of strong returns and a market decline comes along and all of a sudden the balance declines and you may have been better off paying that amount to the dentist in the first place. So that that's the sort of line of thinking I would be taking, Amy.
SPEAKER_07Okay, then
Paying Big Bills In Retirement
SPEAKER_07great. Thanks a lot, Marco.
SPEAKER_05You're welcome. Marco, I have a text here uh from Jane. Uh can you please ask Mark Marco if the super you take as a pension is taxable if you are over sixty?
SPEAKER_01Uh Jane, so that's actually tax-free. So when you start a pension or an income stream, if you're over sixty, the rules are pretty simple. You just get you get that in your hands tax-free, and also the portfolio that's in your pension, so all of the investments, they also become tax-free inside the pension. So they can earn dividends and capital gains and nothing will ever be taxed. That's the that's the really big benefit of super in retirement, is you just have this beautiful zero tax rate.
SPEAKER_05Another text here, uh Marco. Can you please explain a transition to retirement accounts in layman's terms?
SPEAKER_01Uh sure. So, transition to retirement account, they they uh they changed the rules some time ago now to allow you to begin to access your super while you were still working. And as the as the sort of term alludes to, it it's supposed to allow you to transition into retirement, which means you may not want to cease work entirely, you may want to slow down and go perhaps to four days or three days or two days over time, but you'll lose all that income, of course, if you're going from full-time to part-time. So there's an ability to access what's called a transition to retirement pension, which allows you to start drawing some money from your superfund while you're still working. So you're not retired, but you've met a particular condition of release that allows you to start to draw some money out just to complement and top up the income you're still receiving from work. So there's no real tax advantage. It's more of a cash flow advantage. So you can start to taper down your work hours and start to tap your super until you actually decide you want to retire.
SPEAKER_05Marco, we have Gary on the line with a question. Gary, are you there?
SPEAKER_08Yes.
SPEAKER_05Gary, what's your question for Marco?
SPEAKER_08Uh good morning, Marco and Alex. Good morning. Two questions regarding super accumulation funds. The first question is, is there an upper age limit which you can or cannot hold funds in a accumulation account?
SPEAKER_01Uh no, there isn't. You can hold money in a cum for as long as you like.
SPEAKER_08Okay. And the second question is, um and regarding uh assuming you reach the age of sixty uh and your preservation age and you have retired, do partial or full lump sum withdrawals from accumulation fund uh do they form part of your accessible income for annual income tax uh reporting?
SPEAKER_01No, not if you're over sixty.
SPEAKER_08No, don't.
SPEAKER_01Yes, as long as you're over sixty, then whether it's coming from accumulation or pension, it doesn't matter. The fact is you're over sixty, it's tax-free, you won't you won't even need to uh uh include it in your tax return. Okay, that's great. Thanks very much. Thanks, Gary.
SPEAKER_05Thanks, Gary. Marco, I'm interested to know when we're thinking about how our superfund invests, if we're thinking about ethical investments, how do we how do we look into that and sort of sort of get a rundown of of what the investment portfolio looks like?
SPEAKER_01Yeah, very topical. I mean, in today's world, I think everyone has uh definitely at least an ethical slant. So the first place to start is uh I would go to the fund's website and go to their investment pages, their investment tabs, and they'll have a range of material there around what their funds invest in. So that'll give you an idea of the types of assets that they own. To get any more detail, you probably really have to start going to the fund directly and asking for, you know, pretty reasonable investment descriptions of what they have. They may or may not provide them in the detail that you want. It can be a bit difficult sometimes. The the big problem is large funds will often use investment managers, and so the investment managers are not really in the habit of disclosing all of their holdings. They might only disclose their top ten holdings. They may look okay, but you you you might find that holding number 49 is a fossil fuel company or a tobacco company or something like that. So it can be a bit difficult. You need to do a bit of digging. Uh even often their ethical options aren't exactly that ethical because there are certain investments in there you wouldn't really categorize as ethical, but they do on on a different basis with a different definition. So it's not the easiest thing, but I would start with the website and then go direct to the fund.
SPEAKER_05We've got Mark on the line. Mark, you've got a question for Marco.
SPEAKER_02Yeah, um I haven't been out of the I got ten thousand dollars in the superannuation. Which I haven't been out of the work for thirty years. Mm-hmm. And I finally got a disability pension. Mm-hmm. Can I get a pension, a superannuation out?
SPEAKER_01Yeah, I would go direct to the fund, explain the circumstances, and they'll they'll give you a bit like an early access form or a uh
Tax-Free Super After Sixty
SPEAKER_01uh an ability to, I guess, apply to have access to that money. So there has to be grounds for it. So I, you know, incapacity illness might be one of them. So you might well be entitled on those grounds, compassionate grounds, or financial hardship, perhaps. There are certain rules you need to meet. Um they don't have a lot of discretion, I think. The rules are pretty tight, but you you should be calling your super fund, explaining your situation, letting them know you want to access that $10,000, and can they help you? And they should be able to help you. Thank you. Okay, good luck.
SPEAKER_05We've got a text here from Chrissy. Uh I have two superannuation funds that I have tried to combine. One is a Commonwealth Public Sector Superfund under Defined Benefits, and means I can't combine them. I'm a little confused by this as I'm now having to pay two lots of annual fees for two different funds. What do you suggest from Clarissa?
SPEAKER_01So, Clarissa, this is pretty common. So the defined benefit scheme uh it's quite different to the super funds that most people know, which are called accumulation funds. Defined benefits are really older style funds, they still exist today, some of them, where you're not necessarily contributing yourself. So the employer or the state or federal government might be contributing for you on a whole of member basis or whole of fund basis, and your balance is essentially worked out via a formula. So it's not like the super funds we mostly see today where you're making contributions, the money gets invested, and that determines your balance. It's a bit different. So they can't be rolled into another fund, if you like, for example. So that's where you're finding the difficulty. Um are you paying two lots of fees? Yes, you may be paying two lots of fees for both funds, but I would suggest if the entire balance was in one fund and you're only paying that one lot of fees, it would probably be close to equaling what the two lots are anyway. So I wouldn't be too concerned with the two lots of fees. Um I think you just need to look at the other fund that you do have uh an ability to do something with and determine whether that's in the right super fund or not, because the defined benefit funds a bit stuck. But they're very good funds. So I would look at the other one and try and analyse that one.
SPEAKER_05We've got Glenn on the line. Glenn, are you there with your question?
SPEAKER_12Yes. Um I am currently doing um voluntary work for the doll to receive uh employment benefits. And I have uh six hundred thousand in super. Um when I I turned 65 in December, so I've got two years to wait for the pension after that. Um can I withdraw some of my super um now?
SPEAKER_01Now, yeah. Yeah, so um yes. So you've met a condition of release being sixty-five. So turning age sixty-five, it's a pretty simple rule. The the day you turn sixty-five, you have access to all of your super. So you need to start thinking about what you're going to do with that. So if you do need to start accessing it, you need to think about whether you want to access it as lump sums or whether you want to start what's called a superannuation pension, which gives you some great tax benefits, you can set up a monthly income payment to yourself. You then need to think about how you want it invested, which super fund is the right fund, which is going to give you enough investment capability to do what you want it to do.
unknownYep.
SPEAKER_01And then you need to think about how it's going to last. It needs to last a long time. Hopefully you live a long time, so it needs to be invested the right way. So if it's something that you uh find a bit daunting, then I would look to find an advisor you can work with that can help you structure all of that really well. I know my accountant very well, so accountant might not be able to advise you because they don't they might may not have the license to do the investment and financial advice bit, but you can start there and and see if they may know an advisor that may suit you.
SPEAKER_12Very good. All right, thanks for that.
SPEAKER_05Okay, pleasure. Thank you, Glenn. We've got Grant on the line. Grant, are you there with your question?
SPEAKER_12Yeah, hi guys. How are you? Good morning, how are you? Yeah, very good. Um beneficiaries of
Transition To Retirement Explained
SPEAKER_12a super fund, are they subject to pay tax on receiving the monies?
SPEAKER_01Uh well, yeah, it depends. So uh if it's your spouse, which is a common beneficiary, uh generally not. Be your sons. Are they adults over eighteen? Yeah. Yeah, so there likely is going to be some tax. And so what you would look at gets a bit technical, but you'd look at your balance, and then your your balance is made up of two components. One's called a tax-free component. That'll go to your son's tax-free. The other bit is called a taxable component. So that amount is generally going to be taxed at either fifteen or seventeen percent, depending on how they get it. So whether it's direct to them or whether it's via your estate. So i it you know, is there a way around it? There's a couple of things you can do. You can do what's called recontribution strategies, which means you're draw you're drawing out an amount and then putting it back in, because when it goes back in, it goes in as a tax-free component. Okay. Or uh, you know, some people are trying to be very clever around timing their deaths. And, you know, if they're very ill, they might withdraw just withdraw their whole balance and put it in the bank account. And then when that goes to the kids, that you know doesn't attract any tax at all. Yeah.
SPEAKER_05Okay. All right. Pretty straightforward. Yeah. Thank you, Gran. Have a great day. And we have Peter on the line. Peter, your question?
SPEAKER_11Uh G'day there. I'm wondering why advisors and super funds tend to steer people into conservative or balanced levels of investment as they approach 60. For example, my sister's super fund automatically moved her money into balanced level of investment, sent her a letter to that effect, but didn't ask her to do that. Um she's not okay so much with it. You know, she got me to go through all paperwork, and I thought it was rather odd because most people are going to make eighty eighty-three. I think the average age for a male, women a couple of years more. That means their money is tied up, not getting the best investment for most of their remaining life. Now, I understand if you'd said, okay, let's leave five years worth or a quarter of 20 years in a balanced fund, but the rest should be trying to make the match for you. You've got the time frame. I know the market tends to work in they talk like six or seven year waves, and I think people miss out a lot of growth if they just had their money in a balanced fund or less, something very conservative for that period of time.
SPEAKER_01Yeah, I mean, I I must say I like the way you're thinking. So this is pretty new from Superfunds where they they're they're they're looking at these sort of life cycle type strategies where what they're what they're really saying is they're a bit worried about a big decline in the market just before you retire. And so that's called sequencing risk, because you then start with a much lower balance having to start to pay you out your your pension income. So that's a pretty that's a real, pretty serious problem. The downside of that, of course, is you're right, is your portfolio is a lot more conservative and it's just not going to generate if you leave it in that option, it's not gonna generate the returns you may need over the next 25 or 30 years of your retirement. So look, I think there would be a way to essentially say to your superfund, I don't want to be in that option, or please don't automatically switch options for me, I want to have that choice. But then you have to be a bit of a savvy, engaged member to do that. So um advisors, I don't think, really do that. I think it's a super fund thing. Advisors do it a bit differently. We use a bucketing strategy, which is a bit like what you're talking about, where we might allocate two or three years worth of income to a particular investment, a conservative investment, and then layer out the rest of the investments so we're not diluting return too much. But I think you're right, superfunds are doing this a bit more regularly. You have to be an active engaged member to pick that up, like I think your sister was, and then really decide whether or not that's right for you. And you may need to seek advice to work that out.
SPEAKER_11So you wouldn't think that the average person's capable of saying, look, I want to leave fifty percent or seventy percent of my own.
SPEAKER_01I'm I'm not sure that they have in that in something. Well, I think from what we've seen, I mean you certainly sound savvy, but I think the the average person probably doesn't have the know-how, the education to be able to make those calls, those decisions. So I think the super fun, trying to do the right thing is making those decisions for them, they may just not be right. And so i
Ethical Investing Inside Super
SPEAKER_01you know, this comes back to the education point. If you're not going to educate yourself on investments and how to structure investments for a 30-year retirement, it's probably when you need to get some help.
SPEAKER_11Alrighty. I'll put it out there to people on the airways for the moment, anyway, to consider. I'll um thanks for the programme.
SPEAKER_05Good call. Thanks, Peter. Thank you, Peter. Calls and questions are coming in. We've got Peter on the line. Peter, are you there with your question?
SPEAKER_06Yes, I am. Thank you for your time. Just a quick one. My son has um recently 12 months ago joined a uh superannuation scheme in an emergency services fund. Now he uh was in the class, he um signed up. Uh the guys obviously came out there touting, saying how important it was. So that was great. He signed up. Now we were just talking about how good super is for your future life, nested, and he happened to check on it, and there's zero contribution. So he uh rang them up and basically said, Look, what's going on? They said we can't find any tapework. So we're just wondering, for example, if he does lodge some sort of complaint or he has some uh claim, let's say, for example, he's contributed in 12 months, he would have put in, say, five grand. Is he able to be allowed to make a contribution of the five grand that he's missed on and hit the ground running with uh and keep moving forward? Or because we can't get an explanation yet. It only we only found out last week. So we're just wondering whether they will allow it to uh happen or what sort of uh recourse has he got?
SPEAKER_01Yeah, so I mean that's really on the employer. So whoever his employees needed to have paid super at least quarterly during his period, if that's what the employment contract stated. So you probably need to go back to the employment contract. But if it's if it's clearly stating he's eligible for super uh at the 11.5% rate, then over twelve months there should have been four lots of contributions at least. So your first port of call is going back to the employer saying, right, well, we was he entitled super, it hasn't been paid, and then the employer has to actually make up those amounts, possibly with some interest. And so your son really shouldn't have to be making it up himself. That is the employer's role.
SPEAKER_06Yeah, I I don't think uh it's the employer's role, it's the superannuation scheme itself that he's contacted, and he's just saying that there is no money. So again, it's a no-brainer the fact that he's full-time employed now and for the the twelve months that he's been with them, but uh there is no money um certainly from his uh his income going in there to his contribution.
SPEAKER_01So th that's right, but it's not it's not it's not the superfund's obligation to make the contributions, they're just receiving it. So it's the employer's obligation to make the contributions. The super funds are like a bank account, they're receiving it. So it's all The employer. You've got to go back to the employer and sort it out with them.
SPEAKER_06Right. Thank you very much for that. Appreciate it. You're welcome.
SPEAKER_05Thank you, Peter. We have Joy on the line. Joy, you have a question for Marco.
SPEAKER_09Yes, can I start a new superannuation fund if I downsize my house next year and have $300,000, which the government allows to go into super.
SPEAKER_01How old are you, Joy?
SPEAKER_09Eighty-six.
SPEAKER_01So you can do it, whether it's a good idea or not. No, you can open a new one to do it. So there's no there's no upper age limit to that downsizer contribution. The question is though, whether you should do it. So I think you need to think about the considerations around whether it's actually worthwhile for you to do it. So normally we would do that because we want to save some tax. You may as an individual not be a taxpayer anyway. I don't know what your earnings might be. Do you have other investments?
SPEAKER_09No, I don't pay any tax.
SPEAKER_01So you may well not actually get a huge benefit by doing that, because if you had the money in your own name and even invested it in your own name, it's unlikely you would pay tax on any of the earnings anyway.
SPEAKER_09Well, I'm talking about one and a half million each for my husband and I, and we have to put the money
Early Access And Defined Benefits
SPEAKER_09somewhere safe.
SPEAKER_01Yeah, so the ability to get money into super at your ages will be limited to that three hundred thousand each. So you could get six hundred in the rest, uh won't be able to go into super at your ages, and so the rest will need to be invested in a way that's going to meet what you need in terms of income, stability, uh, peace of mind. So you probably need to start designing a bit of an investment plan.
SPEAKER_09So you don't recommend putting it into super?
SPEAKER_01Not sure, I don't know enough about your circumstances, Joy. I'd have to know a lot more to determine whether that was the right move or not for you.
SPEAKER_09Well, I'll only have one and a half million, that will be my t and fifty thousand in shares.
SPEAKER_01And will and so where will you live? Once is it once you've downsized?
SPEAKER_09My husband's living alone in the family home, and he wants to go to an a retirement village.
SPEAKER_01Right, okay. So there'll be a cost for the retirement village to buy a unit there, I imagine. Are you saying after that there'll be one and a half million left over?
SPEAKER_09No, there won't. Uh there will be for me, but not for him.
SPEAKER_01Okay. You uh I gotta I've got to say to you, Joy, you need to sit down with an advisor. That there's a there's a lot more going on here than just a simple should I put it into super or not. You've got a lot of moving parts. I would sit down with an advisor who can work through the different options and then put together a really nice investment plan that's gonna meet your objectives.
SPEAKER_05All right, thank you very much, you're welcome. Good luck, Joy. Joy, all the very best. David, you have a question for Marco.
SPEAKER_10Hi, um hi Marco. Good, David. Uh go going back to an earlier comment about um some uh uh a guy's wife had her her super put into a conservative um setting.
SPEAKER_01Oh, yes, his sister.
SPEAKER_10Yep. My wife, about five years ago when we both retired, we balanced our supers, so they were roughly the same amount. And my wife followed the the super advice of conservative balanced. I went one level higher, and five years I'm a hundred thousand dollars better off than she is.
SPEAKER_01Yes.
SPEAKER_10Okay, so I g I g I guess the message is be careful about you've got a quite a long time to live, and as the guy said you've got twenty or thirty years of living, you need to get some money in. So a hundred thousand. So I agree.
SPEAKER_01I I think I think that's a good call. It it it it was it was probably five years of a good period in markets though. There are periods of five years sometimes where markets aren't. So I think what you're saying. I think I think the message is uh and I agree with this, you don't get too conservative at the point of retirement because there's still a very long time horizon of investing to go. Possibly into your nineties these days. So that's a really long period. You don't want to get too conservative. I think you're absolutely right.
SPEAKER_10Yep. So anyway, that was just my comment.
SPEAKER_01Good comment.
SPEAKER_10Great comment. Thank you, David.
SPEAKER_05Thank you so much, and thank you all for your calls and texts. Marco, it was a pleasure to meet you. Thanks so much. Pleasure, Alex. See you next time. We'll see you again.
