Welcome to the Fear and Greed Business Interview. I'm Sean Almer. Nearly nine in ten Australians aged over forty five are worried about running out of money in retirement, and yet only twelve percent of people have spoken to an expert in superannuation and retirement planning. These are some of the headline findings of Aware Super's State of Retirement report, and considering the importance of planning ahead when it comes to SUBER, I'd say it's pretty alarming. Katrina McPhee is the chief of staff at Aware Suber. Kat Welcome to Fear and Greed.

Welcome to the Fear and Greed Business Interview. I'm Sean Almer. Nearly nine in ten Australians aged over forty five are worried about running out of money in retirement, and yet only twelve percent of people have spoken to an expert in superannuation and retirement planning. These are some of the headline findings of Aware Super's State of Retirement report, and considering the importance of planning ahead when it comes to SUBER, I'd say it's pretty alarming. Katrina McPhee is the chief of staff at Aware Suber. Kat Welcome to Fear and Greed.

Thank you, Sean. It's a pleasure to be here.

Thank you, Sean. It's a pleasure to be here.

So did it surprise you how anxious people are about retirement?

So did it surprise you how anxious people are about retirement?

Look at Sean. In some ways yes, and then some ways no. Right. I guess retirement is one of the most significant moments in a person's life. It's a big mark to an end of a really long era of working and possibly family obligations and all sorts of other things going on. And then you have this moment where you have a an epiphany that you have control over your time, and then you think, oh gosh, all right, how do I afford this, What am I going to do? How do I stay firm healthy? And then you combine that with things that are going on in the market right now, whether it be cost of living crisis or housing crisis, and how to help my kids, and then markets and everything else. I'm not surprised, but the number was really high and it's close nine out of ten Australians are really quite concerned or anxious about what retirement means for them.

Look at Sean. In some ways yes, and then some ways no. Right. I guess retirement is one of the most significant moments in a person's life. It's a big mark to an end of a really long era of working and possibly family obligations and all sorts of other things going on. And then you have this moment where you have a an epiphany that you have control over your time, and then you think, oh gosh, all right, how do I afford this, What am I going to do? How do I stay firm healthy? And then you combine that with things that are going on in the market right now, whether it be cost of living crisis or housing crisis, and how to help my kids, and then markets and everything else. I'm not surprised, but the number was really high and it's close nine out of ten Australians are really quite concerned or anxious about what retirement means for them.

And then kind of even pushing further this four oh fear of running out concept it's worsened, is that because of the cost of living crisis.

And then kind of even pushing further this four oh fear of running out concept it's worsened, is that because of the cost of living crisis.

Absolutely sorry, the figure is actually around that sixty seventy percent of feeling anxious or concerned. It's nine out of ten that are feeling really concerned that the money is going to run out, and that is directly related to cost of living. And we're actually seeing people make retirement decisions or unretirement decisions on the basis of real being worried about whether the money is going to last or not.

Absolutely sorry, the figure is actually around that sixty seventy percent of feeling anxious or concerned. It's nine out of ten that are feeling really concerned that the money is going to run out, and that is directly related to cost of living. And we're actually seeing people make retirement decisions or unretirement decisions on the basis of real being worried about whether the money is going to last or not.

Okay, so let's take me through some of the findings from the report, which I have in front of me here. What I thought was in some of those retired people retiring later than I expected. In some cases. What amazed me more than twenty percent are actually returning to work once they've retired.

Okay, so let's take me through some of the findings from the report, which I have in front of me here. What I thought was in some of those retired people retiring later than I expected. In some cases. What amazed me more than twenty percent are actually returning to work once they've retired.

Yeah, no, that was fascinating. And now it's not all doom and gloom in there. There is a large majority that are doing that because they are really worried about whether their money is going to last or not. But there are some who are returning to the workforce more out of that sense of connection and that sense of purpose or contribution, or that rhythm and life that work gave them and they really missed that once they finish, a big part of their sense of identity was wrapped up in their career or their work, or for some they want to try something completely new. We had one fireman who had always wanted to be a briister, always wanted to make great coffee, and went and did that. So there's lots of reasons, but there's no doubt that it's a large proportion of people right now. I just genuinely concerned about how their money is going to last and how to make the most of the system or make the smart choices. But not many are actually coming and talking to their superfund, which is quite curious.

Yeah, no, that was fascinating. And now it's not all doom and gloom in there. There is a large majority that are doing that because they are really worried about whether their money is going to last or not. But there are some who are returning to the workforce more out of that sense of connection and that sense of purpose or contribution, or that rhythm and life that work gave them and they really missed that once they finish, a big part of their sense of identity was wrapped up in their career or their work, or for some they want to try something completely new. We had one fireman who had always wanted to be a briister, always wanted to make great coffee, and went and did that. So there's lots of reasons, but there's no doubt that it's a large proportion of people right now. I just genuinely concerned about how their money is going to last and how to make the most of the system or make the smart choices. But not many are actually coming and talking to their superfund, which is quite curious.

Yeah, so we'll come back to that in a moment. There's a gender gap there too. Women are more likely to be concerned about running out of money.

Yeah, so we'll come back to that in a moment. There's a gender gap there too. Women are more likely to be concerned about running out of money.

Yeah, this is true. So there's a slightly high proportion of women who are really quite concerned about running out of money. I think they actually also start off with a bit of a gender pay gap as well, and then a gender retirement gap, so their balances on average are lower as they approach retirement, and especially women who are on their own are really grappling with OK, how do I make this last? And I'm more reluctant in many cases to go and seek help. I was a financial planner. I specialized in women when I was helping women into that retirement phase, and what I observed during that time is there is actually a deep amount of shame or guilt, so guilt I didn't get onto it sooner, or shame or worry about feeling silly and asking questions that they feel that they should know the answer to, but the truth of it is no one does. And it is about reaching out and getting some help and starting wherever you are and just doing what you can from there.

Yeah, this is true. So there's a slightly high proportion of women who are really quite concerned about running out of money. I think they actually also start off with a bit of a gender pay gap as well, and then a gender retirement gap, so their balances on average are lower as they approach retirement, and especially women who are on their own are really grappling with OK, how do I make this last? And I'm more reluctant in many cases to go and seek help. I was a financial planner. I specialized in women when I was helping women into that retirement phase, and what I observed during that time is there is actually a deep amount of shame or guilt, so guilt I didn't get onto it sooner, or shame or worry about feeling silly and asking questions that they feel that they should know the answer to, but the truth of it is no one does. And it is about reaching out and getting some help and starting wherever you are and just doing what you can from there.

So you're getting very personal in terms of me, because I kind of feel the guilt of not using financial planners enough, not reaching out enough. I'm ten years from retirement, and you do get to a point where it's almost like, especially my job, this is what I do for a living, and I think, why haven't I done more? Like it is actually a real thing. For so baby booms are retiring, we gen x's are kind of we're now primed to talk to someone.

So you're getting very personal in terms of me, because I kind of feel the guilt of not using financial planners enough, not reaching out enough. I'm ten years from retirement, and you do get to a point where it's almost like, especially my job, this is what I do for a living, and I think, why haven't I done more? Like it is actually a real thing. For so baby booms are retiring, we gen x's are kind of we're now primed to talk to someone.

You're in your prime for so many reasons though, your peak career, peak parent, peak life, and this is not something that is taught in schools either, and I think we have to really forgive ourselves. I acknowledge not everybody jumps out of bed with excitement about super I certainly do, my team does not. Many people do know. I know it's a sad state of affairs, but there are people who do. And I think you just need to put to one side what you don't know and engage with help that you can get. And there is so much your super funds can do at no additional cost. So if you're a member of a fund, there's heaps of help that they can give you and ways to explore without sort of feeling guilty and in your own time as well.

You're in your prime for so many reasons though, your peak career, peak parent, peak life, and this is not something that is taught in schools either, and I think we have to really forgive ourselves. I acknowledge not everybody jumps out of bed with excitement about super I certainly do, my team does not. Many people do know. I know it's a sad state of affairs, but there are people who do. And I think you just need to put to one side what you don't know and engage with help that you can get. And there is so much your super funds can do at no additional cost. So if you're a member of a fund, there's heaps of help that they can give you and ways to explore without sort of feeling guilty and in your own time as well.

Okay, let's come back and talk about that in a moment. Stay with me, kat we'll be back in a minute. My guest this morning is Katrina McPhee from Aware super. The report highlights a few gaps in knowledge about super For instance, seventy seven percent of people don't know they can retire with their superfund and continue to grow their savings in retirement. I think that's a really really important one that many people. You don't actually have to stop and find a new provider, and you also don't have to deccumulate necessarily once you've retired.

Okay, let's come back and talk about that in a moment. Stay with me, kat we'll be back in a minute. My guest this morning is Katrina McPhee from Aware super. The report highlights a few gaps in knowledge about super For instance, seventy seven percent of people don't know they can retire with their superfund and continue to grow their savings in retirement. I think that's a really really important one that many people. You don't actually have to stop and find a new provider, and you also don't have to deccumulate necessarily once you've retired.

No, this was a big uh huh for me, and being someone who's in the industry and just so close to it, you don't realize what people people don't know, and this is a really big one. Most people don't know that, and they're so familiar with accumulation. You know, money goes in, it's invested, you choose your investments, off you go, But they don't realize that once you get to retirement you can actually shift in what's into what's called a retirement income account. Every fund has a variation of it, and it's actually an extraordinary tax free account for you where your money stays invested, so it's still working hard for you and still earning, but it's earning at a tax free rate, and that can mean tens of thousands of dollars extra over your retirement years, which is five six years extra of living expenses in retirement.

No, this was a big uh huh for me, and being someone who's in the industry and just so close to it, you don't realize what people people don't know, and this is a really big one. Most people don't know that, and they're so familiar with accumulation. You know, money goes in, it's invested, you choose your investments, off you go, But they don't realize that once you get to retirement you can actually shift in what's into what's called a retirement income account. Every fund has a variation of it, and it's actually an extraordinary tax free account for you where your money stays invested, so it's still working hard for you and still earning, but it's earning at a tax free rate, and that can mean tens of thousands of dollars extra over your retirement years, which is five six years extra of living expenses in retirement.

Where are people getting their information from for this sort of thing or they not getting enough information?

Where are people getting their information from for this sort of thing or they not getting enough information?

I think the truth is they're not getting enough information. I think there is a big we do call it. It's a very technical term. People do have what's called the ocrap moment. They go, I really do need to start doing something about.

I think the truth is they're not getting enough information. I think there is a big we do call it. It's a very technical term. People do have what's called the ocrap moment. They go, I really do need to start doing something about.

This, Oprah. What was the word?

This, Oprah. What was the word?

Oh crap moment?

Oh crap moment?

Oh crap right right, that's a nice way of putting it.

Oh crap right right, that's a nice way of putting it.

The cat go on, and it varies depending on each individual. Some people have it at forty, some people have it at fifty. We've had people have it at sixty and seventy. It depends on where you are at and you think, gosh, I really need to take this seriously. I think the first port of call for so many people is their family and friends, which you can imagine if most people are feeling concerned, and most people don't understand the system that is not always a comforting place to go. But people have experiences and certainly can give you recommendations of where to go and look. They do go and seek external financial advisor help. So I think that's a really great thing, getting expert advice. But often what you want to do is get it, just some help at no additional cost. How can I go and just start exploring this without actually having to fork out money to begin with, Start educating yourself on decisions and things that you can make, and go from there.

The cat go on, and it varies depending on each individual. Some people have it at forty, some people have it at fifty. We've had people have it at sixty and seventy. It depends on where you are at and you think, gosh, I really need to take this seriously. I think the first port of call for so many people is their family and friends, which you can imagine if most people are feeling concerned, and most people don't understand the system that is not always a comforting place to go. But people have experiences and certainly can give you recommendations of where to go and look. They do go and seek external financial advisor help. So I think that's a really great thing, getting expert advice. But often what you want to do is get it, just some help at no additional cost. How can I go and just start exploring this without actually having to fork out money to begin with, Start educating yourself on decisions and things that you can make, and go from there.

And part of what you just said that I took from it, it's never too late to do that either.

And part of what you just said that I took from it, it's never too late to do that either.

Never too late. It is absolutely never too late. There's always choices to be made.

Never too late. It is absolutely never too late. There's always choices to be made.

The idea of managing you super draw down whether you're drawing down the minimum, and I suppose that's fear of running out. If you draw down the minimum, you think, well, at least they need something for a rainy day. But are there many people like there who can afford to draw down much more than the minimum?

The idea of managing you super draw down whether you're drawing down the minimum, and I suppose that's fear of running out. If you draw down the minimum, you think, well, at least they need something for a rainy day. But are there many people like there who can afford to draw down much more than the minimum?

I would say the vast majority of people can draw down far more than they think they can. We're releasing a new so we have an online digital advice tool that gets you up to sixty and really optimizes your sort of retirement outcome. We're about to release another one that is all about optimizing your income. We've noticed so many people actually just taking the minimum because they think that's what the government thinks you need to do, or it's the most conservative stance. But when you factor in investment returns over that time, the tax advantages are the assets you might have, and certainly Sentling can making sure that you get that into the mix. If you're entitled, actually doing the calculations about how much you can take out and comfortably live out to your nineties or late nineties, you can actually enjoy life a little bit more while you have your health and well being, rather than sort of sitting on a giant nest egg that then becomes an inheritance at some point.

I would say the vast majority of people can draw down far more than they think they can. We're releasing a new so we have an online digital advice tool that gets you up to sixty and really optimizes your sort of retirement outcome. We're about to release another one that is all about optimizing your income. We've noticed so many people actually just taking the minimum because they think that's what the government thinks you need to do, or it's the most conservative stance. But when you factor in investment returns over that time, the tax advantages are the assets you might have, and certainly Sentling can making sure that you get that into the mix. If you're entitled, actually doing the calculations about how much you can take out and comfortably live out to your nineties or late nineties, you can actually enjoy life a little bit more while you have your health and well being, rather than sort of sitting on a giant nest egg that then becomes an inheritance at some point.

One of the findings that I thought was interesting, ninety one percent say superannuation is their money. They want to use it for their personal fulfillment. Right. For years, we've always heard about inheritance and people saving for the kids and stuff like that. Now my poor kids are getting nothing, and I have no quiants about that, but I do think that seems to be a shift and maybe that's the introaction of superannuation back in the eighties or something where people from now on will retire with money. But is inheritance as big a thing as it used to be?

One of the findings that I thought was interesting, ninety one percent say superannuation is their money. They want to use it for their personal fulfillment. Right. For years, we've always heard about inheritance and people saving for the kids and stuff like that. Now my poor kids are getting nothing, and I have no quiants about that, but I do think that seems to be a shift and maybe that's the introaction of superannuation back in the eighties or something where people from now on will retire with money. But is inheritance as big a thing as it used to be?

Do you know what the phenomenon actually is. It's actually people wanting to help their kids now rather than later. So we've heard about the bank of Mum and Dad. We've certainly heard of Mum and Dad childcare centers as well. So there's a lot going on in the present and I think that's been driven by the state of housing and the barriers to entry for younger people getting into housing these days. So what we're finding is people are asking questions of right, how do I set myself up for retirement, but how can I help my kids right now versus leaving it to inheritance, or they're thinking of other assets like the family home and things as a form of inheritance. Don't know, don't feel guilty about not leaving the many of your super You're with the majority of Australia.

Do you know what the phenomenon actually is. It's actually people wanting to help their kids now rather than later. So we've heard about the bank of Mum and Dad. We've certainly heard of Mum and Dad childcare centers as well. So there's a lot going on in the present and I think that's been driven by the state of housing and the barriers to entry for younger people getting into housing these days. So what we're finding is people are asking questions of right, how do I set myself up for retirement, but how can I help my kids right now versus leaving it to inheritance, or they're thinking of other assets like the family home and things as a form of inheritance. Don't know, don't feel guilty about not leaving the many of your super You're with the majority of Australia.

There are the numbers like fifty seven percent plan to travel during retirement, et cetera. I like this one, fifty two percent intend to relax more. What are the other forty eight percent.

There are the numbers like fifty seven percent plan to travel during retirement, et cetera. I like this one, fifty two percent intend to relax more. What are the other forty eight percent.

Doing okay, I'm not really sure. Unrelaxing, I think people there's a real general excitement. This is where I got a lot of joy from the report, actually, because when you take away sort of the money concept and you can square that away in your mind and you're feeling a bit more secure about that, there is a real joy about taking control of your time and what you might do. And there's no doubt Australians want to travel. Pickleball made a resurgent, but I found really interesting as a very American spot for the knees, all of those good things.

Doing okay, I'm not really sure. Unrelaxing, I think people there's a real general excitement. This is where I got a lot of joy from the report, actually, because when you take away sort of the money concept and you can square that away in your mind and you're feeling a bit more secure about that, there is a real joy about taking control of your time and what you might do. And there's no doubt Australians want to travel. Pickleball made a resurgent, but I found really interesting as a very American spot for the knees, all of those good things.

So there's a lot.

So there's a lot.

There's a lot of joy that comes with taking control of the time and a lot of it comes down to volunteering and just doing the things you've actually always had on the list, I think, but never had the time to do.

There's a lot of joy that comes with taking control of the time and a lot of it comes down to volunteering and just doing the things you've actually always had on the list, I think, but never had the time to do.

Kat thank you for talking to Fear and Greed.

Kat thank you for talking to Fear and Greed.

Thank you very much for having me.

Thank you very much for having me.

That was Katrina mcpee, chief of staff at Aware Super. This is the Fear and Greed Business Interview. Remember this is general information only, and should always seek professional advice before making investment decisions. Join us every morning for the full episode of Fear and greed. Daily business us for people who make their own decisions. I'm Sean Elmer. I'm enjoy your day.

That was Katrina mcpee, chief of staff at Aware Super. This is the Fear and Greed Business Interview. Remember this is general information only, and should always seek professional advice before making investment decisions. Join us every morning for the full episode of Fear and greed. Daily business us for people who make their own decisions. I'm Sean Elmer. I'm enjoy your day.