What Every Aussie Should Know About Superannuation Today

Hey guys, welcome to this week's Money and Investing show. This week we're looking at what Australians need to know about superannuation.

It's one of those murky areas that people typically don't have enough interest in until it's too late. So take a few minutes now to find out some of the key markers that may just set you up for a retirement that you truly deserve. As always, don't just take notes, make sure you take plenty of action. Hey guys, welcome to this week's Money and Investing show with me, your host, Andrew Baxter, and as always, my off-sider and co-host, Mitchell Laurentiis. Hey B, thank you for having me on the show.

We're going to dive straight into it today. we're going to be talking about superannuation, recent, recent legislative changes, plus many Australians in the dark, a little bit on how to best manage it. It's one of those things. I mean, it's a moving face. Rules seem to change at every which way and when. And so it does make it hard for people to really better dial in and plan for something, which is ultimately, you know, probably the biggest long-term investment that people have.

And, you know, you need rules to work toward that. What I'd say as a preface for this too, obviously, you know, we're having a chat about this right now. So this is what's called a one-to-many conversation that tens of thousands of people watch this. This is not a substitute for getting personalized advice. And I would highly recommend when it comes to your retirement that you actually do talk to an expert advisor that can help you on this.

We'll give you some general things to consider, but you do need to take care of that by speaking one-on-one. That's right. And it's an important conversation to have because the last thing anyone wants is to have a certain lifestyle, get to retirement age, and then have to significantly reduce that. And I think having things like your principal place of residence paid off and have some money in the bank and that kind of thing is all relevant to the conversation.

But let's dive into super right now. So max contributions, employee contributions, how does it work? So yeah, the max contribution in Australia is $30,000 per year as a concessional contribution. So you can put that in effectively each and every year. And that's extra from on your own, right? That's total contribution. Yeah, okay. Total contribution.

So you can top it up yourself if your employer has put their amount in and you choose to put an additional amount in yourself, 30 is your max that you can put in there. And I think, you know, what I say is such a varied feast. I think you've got to go back to the origins of Super, which was brought in by Paul Keating.

And when it was originally set up, the whole process for Super was supposed to be 3% from the employer, 3% from the government, and then 3% from the employee where all three parties were coming to the table to be able to contribute, make sure that people had a retirement with dignity. That seems pretty fair, really. In its essence, and probably one of the great things that we've seen in modern economics in Australia in its, sort of ethos of what it was from achieve. Brilliant, brilliant idea.

But just like everything, when we allow our politicians to get a hold of it, it's turned into an absolute catastrophe because the balance now comes exclusively from the employer and is soon to go to 12%. So we're 11 now in terms of what needs to be put in and what people fail to realize that's on top of salary.

So if you're asking for a pay rise on one side of the coin and the employer's got to stamp up more and more and more to contribute to super, it does make things very, very difficult from an employer perspective to meet superannuation demands. If we went back to how it was supposed to be, I think it will be a far, far better model. Yeah, and everyone wants to pay rise. Think about the cost of living right now. Things are really expensive.

I think Australia is one of the worst cost of living crises in the developed world. So it's unsurprising that people want to be paid more. It is. And so you've just got to look at it against that context too. So if it's changed from three, three and three to now being 11 from the employer. Where's it going to be in a period of time, but it's not just who's putting the money in, it's the rules that keep changing within it, which really cause the problems for people.

And this is where I think attention span starts to wane. You go, look, if they're going to change the rules on this every five minutes, it's all just too hard. I won't bother with it, which is so counterproductive if it were standardized and kept in a format that was common sense and clear for the next 20, 30 years, it would be a far easier asset class for people to understand and really better properly plan.

So, you know, that I appreciate is, yeah, there's a bit to unpack in that statement, but yet you do have the ability to maximize your contributions. And I think given, again, the sort of tinkering that we're seeing in this right now, particularly with some proposed government legislation, people are turned off by what's the point if I'm just going to get smashed with text down the trap. And we've spoken previously about Robin Hood economic policy. It's not a good idea. That's right.

And I think particularly for people of my age, maybe even slightly older, it's something that seems so far away. It's not really something that anyone really considers. If the employer does it on your behalf, it's taken care of, but adding extra and working out the best way forwards is not really something most people think about.

When we talk about recent legislative changes, there's something proposed currently by the Labor government, which was on self-managed super funds. I think it's the balance is over 2 million. Well, what's the story there? Again, we talk about Robin Hood type taxes. If you think the volume of people as a percentage of the voting populace that have got over 2 million in their super or self-managed super, it's not going to be that many.

So if you offside them, there's no negative consequence from a political perspective. You're going to lose a handful of votes. It makes no difference. So you've got a very easily managed group of people where you can go, right, we're just going to slug you. And again, you go back to the ethics of what this is all about. The whole idea of your superannuation, when you're younger, as you rightly say, It's something that seems so far away.

It's not really important. I'll get around to it one day, someday. And there is actually a flexion point in life whereby you then suddenly realize in a lot of people's cases that they haven't really paid any attention to it. The clock's ticked and now it's becoming a reality that they've got a significantly unfunded or underfunded retirement plan and they're playing a game of catch up. And the challenge with time, it's like a coin, it's heads or tails on a coin.

Time is either working for you or it's working against you. And the key thing as an investor is to have time always working for you, never against you. So the earlier you get started, the better.

This notion that, okay, if you've worked hard and you've contributed as much as possible, and in the past there were different limits on what you could put in, you could put much, much more into super, and you've accumulated a retirement nest egg that runs into the millions, you're now the most vilified person on the planet.

How dare you have worked so hard to save all that money to get a provision for your retirement so you could retire with dignity? How dare you? wouldn't that be a good thing so well you would argue that yes but it's a very very easy social button to press and go it's not fair you've got younger people and i just had this this is quite a visceral thing for me because i just had somebody over our social media accounts over the weekend.

Torching me about baby boomers and people that were born in the 50s and they've got all this money and it's not fair it's well okay and so you know it is that they're a really easy soft target self-funded retirees and what have they done wrong other than work hard contribute to They're super played by the rules at the time, and they've accumulated a decent retirement nest egg.

And the other side of the coin, and I'm not sure who gets to nominate who plays God in this particular equation, is that that's too much. They shouldn't have that much in there. Who is the person that makes that decision? Because let's say for argument's sake, you've been a senior executive or a founder of a business, and you've done really well financially.

And paid a lot of tax along the way. probably employed a lot of people on the way done your payroll tax pay as you go for your stuff paid their super you've done everything and throughout that process you've been able to squirrel away you. Superannuation asset. So let's say you're a painter and then you go into business for yourself as a painter and it becomes quite a successful business.

And then you buy a yard that you hold within your self-managed super and you rent it through your company to your super, which provided it's an arm's length transaction and done at commercial rates, you can. You've probably built up this commercial asset that's now worth a few quid. You're moving into retirement. You might go, well, we'd look to sell that or we could continue to rent it to pull the cash flow from it. Someone suddenly

come along and you shouldn't have all that asset. It's not fair. And if you've been used to a certain standard of living through your working years, whereby, you know, let's say you've pulled down, you know, seven, 800 grand a year as a salary where you've been working, who's to determine that when you go into retirement, you shouldn't be able to have that similar sort of income in retirement. You've worked, it's your choice.

But unfortunately, through the world of, I guess, you know, political lenses, it's seen by a very, very great many people that it's not fair that you've got there. So stuff it, let's go tax them. What are they going to do about it anyway? There's only a handful of people there. And if they vote against us in the next election, it matters not. So it's a really soft target to do that. And it's not so much that it's picking on a soft target.

What it does, it makes it very, very hard as financial professionals, where we're giving advice to people on how to provision for their retirement to say, well, based on the current rules. Yeah. In five minutes time, those rules could be totally different. It could be that you bring in more significant capital gains tax, not at the 15% super rate, but at say 30% or even 50% for superannuation assets down the line.

Where does it stop? And you can't expect people to plan for the future when they don't know what that future is going to look like. And look, none of us know what the future is going to look like, but if we've got a set of rules that we can work with. Well, we can kind of get people there and let them retire with dignity. And if they've worked hard, they can reap the rewards in retirement. And who's to say they shouldn't do that? That's right.

I mean, it sounds crazy to me because I would think that if you've done the right thing by looking after yourself down the line and not having to rely on the government, that you should be rewarded for it.

And I thought that was the whole purpose of super being a tax effective vehicle. But if you've got a balance over 2 million, that's not actually the case. It's now 30%, not 15, right? That's what the proposals may be. We haven't seen that go through yet. And look, if we're going to have a level playing field for superannuation, perhaps our politicians should be on the same playing field too, because as I understand, I think they're allowed to contribute, I think it's up to 17.5% of their salary.

Right, okay. Not the amount that we get. Why different for them, not for us? Politicians are very different, aren't they? Yeah. Different set of rules. Yes. So park that to the side for the moment, but it is a very, very difficult situation.

And look, if you're at the other end of the scale, if you're someone that's maybe you're five years into the workforce and you're working in construction, for example, which is a high paying job these days, you know, having your money going into your industry super is a different pathway. And I guess we'll explore the difference between super retail, you know, industry super and self-manage as we go through, but it's something you have to pay attention to.

Let's do that now. Let's go through those three options. So retail super fund, industry super fund, self-managed.

Let's start probably at the most arguably the basic level, which is just an industry superfund. What does that mean? How do you get that? So if you work in a particular industry, CBUS will be an example of that for the construction industry, or if you're in the hospitality host plus, these are superannuation funds that were set up to cater very specifically for people that work in that sector.

And the ethos behind it was that number one they're a not-for-profit number two they're supposed to be being run in the best interest of their members and as a consequence you would expect to see better return actually flow on to to the members so it's something that's a default for many many people and and i've got no issue with that because it's better to have something than nothing and if it means that you're provisioning for your retirement you know

let's say you worked in a nightclub where you're at university as a glassy or something like that At least there's money going into your retirement fund through Host Plus. At some point, it's going to be there. Absolutely. Where it starts to become a little bit more challenging is, is industry super the ideal place for your money? And is it really the altruistic vehicle that the marketing campaigns extol it to be? And the answer is probably no. What are the downsides out of interest?

There's been a lot of press recently, and just do a simple Google search on this, where multiple industry super funds have been shown to be deficient on many, many, many different metrics. For example, we had a data breach and hacking and balances were withdrawn from a couple of big super funds fairly recently. And if that was in the private sector, you would probably lose your financial services license and be in all sorts of trouble.

And so there's a bit of an issue about accountability there perhaps too.

Secondly, things like transferring balances, payout of death nomination benefits and things like this have been incredibly slow within industry super it's not been done at a commercial rate i suppose the counterbalance to that is that oh we're we're not really here to make profit so our service standards are a little bit different from other people but don't forget it's who in whose interest to hold on to that money for as long as possible and then you look at the sort

of tie-ins with unions particularly and this has been very very well publicized with some of the recent sort of dealings with the cfmeu and their tie-in with CBUS and the millions of dollars in union contributions and things like that that have gone on, which is clearly not something that's in the benefit, of the members whose money you're supposed to be managing. So there's quite a lot of sort of controversy sitting on that side of the ledger right now.

And it's probably something that does need exploring, evaluating, revising, and setting a new standard for. Because in its very essence, just like superannuation when it was first put forward by Keating, it's got the potential to be a great thing. But like most things over time, they can deviate from the path that they were set on. So from a very basic level, if it's your first job or you're in that industry, having an industry super seems like a great idea.

However, if you've been working for a period of time, moving into something that gives you a little bit more choice, a little bit more control, kind of makes sense because it's ultimately your retirement that you're looking for. And the performance of industry super, it's okay, but it's not shooting the lights out. No. And I think every year now they publish a list of any industry super fund, which has underperformed the Australian stock market index by a certain amount,

almost like a name and shame. Correct. That's pretty hardcore. It is. That was fairly recent legislation that was brought in to have to do that too. And they're obligated to communicate that with their members. So, hey, look, we're not doing very well. Yeah, we want to read their money, then feel free to do so, which I think is a good thing. And this is an example where legislation is kind of sitting there and pushing for quality reform rather than the quality reduction reform. Yes, agreed.

So moving into that, as your balance starts to grow, looking at other opportunities in the market, and so retail super, they tend to have a different fee structure. You know, if we take, you know, Macquarie would be an example of a provider of that. You know, Macquarie is a commercial business, a very profitable commercial business.

But what you get for your money there perhaps is a lot more choice in terms of the asset mix that you have, which gives you the exposure to things that potentially may generate better performance over the period of time. And noting our previous comment that, you know, time is like a coin. It's got to be working for you. Getting better quality assets earlier that are working for you gives you the ability to really grow that superannuation balance for you.

So you can call upon it later on in life when you need it at the drawdown and transition to retirement phase. So looking in retail super kind of is a first stepping stone.

But really the game changer in my mind is the world of self-managed super funds. And this is one that trying to get an answer publicly, you know, you can Google what's a balance for an SMSF, Self-Managed Superfund, you know, the cost of running an SMSF or Self-Managed Superfund now are much cheaper than what they were a number of years ago. So the sort of flexion point where it becomes cost effective to have an SMSF is much lower.

And typically you might see that around about that $250,000 threshold. And a lot of people will go, oh, well, I don't have that. You might not have it yet. You might be very early in your working career, or there are ways that you can up the amount that you have in superannuation through bring forwards, for example, you can bring up to $300,000 of future contributions forward to today. Combine with your partner? That's the second thing, as I was about to say, is that secondly,

that 250 threshold is you and your partner. Okay. So all of a sudden that makes it far more palatable. And the advantage is that initially, if you look at it and you think, gee, this is just simply a fee bonanza. I've got to get an audit done. I've got my tech stuff I've got to take care of. maybe there's an advisor sitting in there. So yeah, there are a number of fees, but unlike industry super or retail super, where the fee is a percentage of your balance.

So the more you grow your retirement nest egg, the more you have to pay in fees with self-managed super, because the cost of an audit is largely fixed in same way with your tax return with the accountant is largely fixed. There becomes a diminishing cost base because the costs are largely fixed in their nature. Balance grows. Balance grows. Your costs don't go with it. So you become net better off. So it's a real flexion point. And that's a very, very difficult thing to get across to people.

Secondly, of course, you've got to want to have your hands on the controls. And a lot of people would see that as a lot of responsibility, which it is, and feel that, look, it's not for me.

I don't think I want to be burdened with the responsibility of that. But if you get good advice, good education, a good team of people around you. Learning how to take control of the future is an absolute lay down mazar in terms of a decision. Because, you know, the acid test for whether it's a good idea or not, it's really simple. And that's who do you trust most with your money? If it's not you, it shouldn't be somebody else. It's got to be yourself, right?

So learning how to get control of it, even though it may seem like a little bit of heavy lifting, once you've got that in play, bang, you're away. And as far as my understanding is, you can pretty much do anything within a self-managed super as long as it's well documented in a mandate. Is that correct? There are a few things, and as we said at the top, and you're right, you've got to get advice on this.

This is a one-to-many broadcast, but things like having your trust deed very clearly written out, the investment strategy being very, very well documented. If you're trading in the stock market and maybe you do cash on demand. Having a derivatives risk statement, all of those sorts of things are essential documents that kind of sit in there to go alongside it. If you're doing property in super, which many, many people do these days, you can't buy your primary place of residence to live in.

I think that's something that probably should be looked at, but that's a conversation for another time. Great source of tax revenue for the government because, you know, get taxed at the super rate rather than tax-free, which currently primary place of residence is. That's true, right? But, you know, if you're doing property in there, you've got to have like a limited recourse borrowing agreement.

There are a lot of nuances with the documents, which again, And it sounds overwhelming, but when you get professional advice, it's quite easy to step that all through and stay on top of it. So to my mind, I think as people get towards that 250 plus balance, looking at SMSF or self-managed super makes a lot of sense. And you can invest in a broad, broad array of different assets. I was going to say, what constitutes an asset?

I mean, watches, art, wine, do they all count? You can lock them away and when you retire, you get all the benefit from them? Actually, yes. Really? But... They've got to be held for what's called the sole purpose test. So, for example, if we use a piece of art as an example, you've bought yourself a nice bit of art that you think is going to appreciate and value. You can't hang it on the wall in your house or at your office. It's got to be locked away in a vault. So you don't actually get,

you don't get any enjoyment of that asset. Until you retire. Until such times as the asset is sold, it's an investment asset. Okay. All right. And the same with wine? Yeah. You can't drink it and put the empty back in there, put a clean skin back in its place. It doesn't work that way. Damn. The challenge when you start to move into maybe, if we can use the term, exotica from an investment asset perspective like that, is that there is a requirement for your fund to be audited each year. Right.

And so auditing the value of a picture or wine or jewelry or precious metals or pink argyle diamonds, whatever it might be that you put in as an asset, all of which you can, getting the valuations of those becomes a little bit more tricky and anything that's more tricky becomes more expensive. So your cost base for getting that side of things done is the same. Same if you've got an investment property in there, it's got to get valued every year to go as part of the audit.

Whereas at least with stocks and shares, it's pretty easy to run that off. You can see what their value is as at 30 June based on trading statements. But yeah, you can open up the parameters for so, so many things that sit in there. The key thing is what we call that sole purpose test. It can only be for the benefit of the investment of that superannuation fund, not your personal enjoyment. That's a real shame.

Once again, though, get advice with all of this. That hazmat boat you were looking at tucking away in there and using every weekend. Unfortunately, you won't get that one over the line. Okay. So let's do a little bit more of a deep dive now.

So we've got superannuation, which as we can see, can be a really good vehicle for people. What would you say are the primary disadvantages or mistakes, mishaps that a lot of people make with superannuation, AB? One of the big benefits that we haven't talked to is asset protection. It's also a really good vehicle for that. It tends to be one that's kept... Out of the mix. If you had an insolvency, for example, super is kind of seen as being off limits for that.

Different matter for family court action, by the way. So a lot of people think, oh, it's in my super. If you're going through a separation, that does become part of the pool from a family court perspective. But within reason, it does provide a good level of asset protection. So turning to the disadvantages, your question was? Yes. So disadvantages, mistakes and mishaps that people make with super.

Not getting started early enough, not getting enough control, not paying attention to performance and fees are probably some of the obvious ones that sit there. Also not fully utilizing the ability to get it topped up. And again, this is a hard conversation to have with younger people.

If we take yourself as a case study, there are other ways at the moment you can utilize your money where you're possibly going to get more growth that's of more benefit to you, which is exactly that journey that you're on currently. Well, can I offer an anecdotal example on that? We did an episode similar to this probably two or three years ago.

So what I did in my retail super fund is you can actually go in and you can select the kind of risk appetite slash portfolio that you're wanting to have. Conservative, moderate, high growth, high risk. I went in there and chose high growth, high risk being in my twenties. Of course, you're happy to be in for a long period of time and take the punt. You think about what that performance might look like over 50 years,

for example, or 40 years. Let's say you earn an extra 2% per annum on your funds. With time working for you. Over 40 years. How big of a decision that one click took me for five minutes. Well, that's right. You've got to pay attention to it. And if you're able to, you know, just get a couple of percent better performance over time and compound it from a young age, it's blowing the difference. You know, it's hundreds and hundreds of thousands of dollars of difference.

It took me five minutes. Went in, I selected high growth portfolio. That was it, done. So the other side of the coin in terms of mistakes is not choosing an asset mix, it reflects where you are in life. I guess as you get older, the prospect of being in a portfolio that's too aggressively structured for you could equally be a poor decision.

So as you move closer to that finishing line, technically the asset basis that you invest in will start to change into more conservative type assets until that time you get to retirement where it becomes more income focused as opposed to capital growth. So that's So that's a huge one, making sure that asset mix matches where you are in the journey. Also not to be swayed by somebody else. Everyone's got their own risk profile. And so you may well have a whole bundle of time.

And you'll have peers in your age group that are much, much more conservative. And you'll have some that are more aggressive. And trying to match somebody else's appetite for risk generally doesn't work out too well either. Because either if you underclub it, you're going to get bored and it's going to be very tedious and not take the goal. or if it's too aggressive, you're going to have a lot of sleepless nights and be stressed about it.

So it's making sure that the mix of assets or profile, if you will, of the assets you're investing in suits your investing personality. Got you. And don't forget to consolidate too. You mentioned before, if you're at uni, you might have a job here, a job there. You could have potentially different super funds with different amounts. Bring them all together because you want the fees as low as possible. That's right.

If you've got four funds because you worked on a building site, so you've got a CBUS one, you've got a Host Plus one, you're at Glassie and whatever it might be that's in your particular history. If you've got multiple funds, each one of those funds will be paying life insurance for you as part of the default insurance that sits within super. But if something happens to you, you only get one payout. You don't get all four of those policies.

So you're paying for a service you're never really going to use. So taking the time to consolidate, there are plenty of government sites that you can log on to consolidate that starts to give you a bump up in the value of your super if you've got two or three that have now been pulled together. And now it might start to look a little bit more attractive for you to explore some of the other options that are out there. Got you.

So last and final question, AB, as you start to transition to retirement age, what would you suggest as you are getting into the lead up of that and plus drawing out an income from that? I think making sure you max out your contributions as you get older is key. And in a traditional model, whatever that looks like these days, if you're able to get your debt paid off pretty early, you follow what we talk about in our book, The Wealth Playbook.

I mean, this is what this is all about, is getting yourself financially ahead. If you've been able to get your debt paid off earlier and that money you can then start to contribute into your super so you can max out your contribution and get full exposure where you can, it is a good thing to do too. Something to be mindful of as your income goes up is the specter of division 293, which is if you earn over $250,000 a year, your superannuation is taxed

at a higher rate because of the fact that you're a higher income. Oh, I know. It's an exit really tough, doesn't it? It does. It's meant to be a good thing, Super, I thought. And if we go back to our premise of how it started off when it was designed, I'm going to sound almost Trump-esque when I say it was a beautiful thing.

And then all of a sudden, we've got something which is this revolving door of changed rules and changed objectives and changed perspective from it being a good thing, doing, oh, I'm not really that interested or it's not, it could be a bit of a poison chalice. So, you know, as you move into retirement, the change of the asset mix is one thing. Number two is making sure that you're going to be able to project what that income is going to be able to provide from that fund.

And if you're still working, you've got the ability to top up your account as much as you can so that the income is then able to grow. And the challenge is, you know, you want to have some level of savings, but we're moving into a lower interest rate environment where savings after inflation is net net. It's hardly worth bothering.

So if you instead of it putting it into cash we're able to put it into super where it's able to invest and grow a little bit more for you it kind of makes more sense so i'd be inclined to look at making sure number one you max out your contributions where you can to get the most benefit you can also do things like a bring forward whereby you can bring forward i think it's up to i'm pretty sure and again get advice on this up to three hundred thousand dollars.

Of or five years of contributions 150 each so it's 300 for a couple yeah uh of future contributions today so that if you, for example, let's say you sold part of your business off or you've come into a sum of cash, being able to whack it in there and have that asset then growing for you for an extra four or five years kind of makes sense. So that again is something you want to get advice on. So failing to maximize contributions where you can and bring forward rules and

all that sort of stuff is an easy mistake to make. Gotcha. And once again, the premise of our podcast, Money Investing, is to know the game, because once you know the game, life becomes a lot easier. And you're quite right. You have to understand the rules of what you're playing. And it's a very difficult area to fully understand the rules. And I'm sure there's going to be a boffin or two that are watching this going

on. You weren't quite right when you explained that. As I said, this is one to many. Sit down individually to talk to your expert. I'm by no means an expert on this, but I've got plenty of people in our team here that are, that can advise you on this, on the minutiae and the granular nature of what this is about.

But I guess, you know, that last thing as you're moving into retirement, whatever retirement may look for you, is to make sure that you've done some budgets and understand what you actually need to live off versus what you think you need to live off. Because things do change quite considerably. You know, the notion of, you know, car, for example. So let's say you've got a facility where your employer pays for your transport right now.

All of a sudden you've got to buy a car. And it's not just buying the car. There's insurance, there's the on roads, there's pink slips and God knows what else that can go alongside all of that that you then have to contend with, budgeting for things like that. Equally, you may not be commuting to work every day. So that public transport season ticket that you have is maybe something you don't need.

So sitting down and actually going through a very active budget as to what you need versus what you think you need then lets you go to your advisor to say, right, this is what my baseline income requirement is. How do we structure the assets that we have to be able to split up that kind of cash flow. My father's 83 years old. He's been retired since he was 57, still saving because he's very good at budgeting, my old man.

But one of the things that he does do strategically is he's a great thinker when it comes to money. And one of the great things about living in the UK as he does is that being able to travel to lots of different places is very, very easy and it's actually quite cheap. And he'll sit down and work out and go, right, okay, cruise company. They've got a promotional at the moment. I can go and cruise around 25 days around the Mediterranean and it's going to cost me less than

living at home. Wow. Okay. Yeah. And if you think about the UK in the dead of winter, particularly thanks to Keir Starmer's removal of the 300 pounds heating allowance for people that are over 80 years of age. And in a way, that's the same thing as the changes to self-managed super tax. People over 80, from a voting perspective, they're a small group of people that are only going to get smaller by attrition.

So who cares if you abuse them taking away a 300 pound heating allowance from british pensioners if they're over 80 is despicable so more bands it's just on the sums and it's really expensive for heating uh i think he's got gas at his house you know it's pretty expensive to run so yeah i can go and cruise around the med that's all my meals i'm gonna worry about the cold it's safe no one's gonna you know and and off you'll go and come back you know 200 bucks up with a 10.

And maybe a new friend. That's right. But there we go.

So, you know, knowing your budget is an important thing because it gives you a factual baseline from which you can work to then, you know, make your decisions more effectively. And a lot of people, when they go into retirement, have this expectation that their cost of living is going to be X, but it may be much different to that, hopefully significantly lower and you're able to live the life that you deserve.

Got you. Well, I mean, thank you very much. Once again, get advice, understand the game and this stuff will serve you much better off. Too right, 100% true. Cheers.

If there are words or phrases in this podcast that you don't fully understand, or perhaps you're someone that's looking to generate strategies to help build your wealth, make sure you visit wealthplaybook.com.au and grab your copy of our latest bestselling book, which is absolutely jam-packed with strategies, techniques, and most importantly, checklists that will practically give you a guide to create tomorrow's wealth today.