Shane: Hello. My name is Shane Hancock, and I am the Head of Member Products, Guidance and Advice at AustralianSuper. And welcome to our podcast, The moments that count. Before we start, it's important to note that the information discussed in this podcast is general only and doesn't take into account your needs or personal objectives. You should assess your own financial situation and needs. 

Today, this podcast is being recorded at our head office on the land of the Wurundjeri people of the Kulin Nation. I and AustralianSuper acknowledges the traditional custodians of country throughout Australia. We pay our respects to elders past and present, and extend that respect to all Aboriginal and Torres Strait Islander people.

Quite often, AustralianSuper members will ask questions that are found through various channels. And mostly those questions are relevant for many members, so we thought it'd be great if we could share some of those questions and answers through this podcast. 

To help answer these questions, I will invite a guest expert to join me on the podcast. And today I'm welcoming back Helen Harrison, who's previously been one of our superstar experts to talk about a really relevant topic, which is retirement, but more importantly, unplanned retirement. Helen has been a Financial Adviser for twelve years. Helen provides advice under the license of Industry Fund Services. Welcome to the podcast.

Helen: Thank you, Shane, great to be back.

Shane: So, Helen, when people think about retirement, in a lot of cases they're thinking about a particular age when they might be able to retire. But a lot of people and a lot of our members retire unplanned. What are some of the reasons why someone might need to retire earlier than they originally planned?

Helen: Yeah, that's unfortunately true, Shane. Most people want to retire around the age of 65, but recent data from the ABS shows that that's more likely to be around the age of 56. Some of the reasons why people may need to retire earlier than planned - illness, around 13% of people retire early due to sickness or injury, family responsibilities, so it may not be them that is sick or injured, but they might be caring for a loved one. 

Retrenchment often as people get older and they've retrenched, finding work again becomes more difficult or just burnout. Some people have just had enough of work and just want to take control of their retirement.

Shane: So, as a financial planner, there'd be multiple different situations that someone would come to you for advice. But if someone's facing unexpected retirement, what are some of the things they could do?

Helen: The first thing I would suggest that they do is really get an understanding of where their money goes, whether that's doing a budget, keeping track of their spending. There is a great tool available on the Australian government's MoneySmart website that could help. But it's really important that you understand what your fixed costs are, such as rent or mortgage repayments, food, regular bills. 

Understanding what your fixed costs are is really important moving forwards and also understanding what your variable costs are or what are the things that you may be able to cut down on. Good things that you could do would be looking at trying to reduce your power bills, phone providers, things like that, where you can compare different providers to see if you're getting a good deal. 

More drastic measures could be something like downsizing your home. If you've got debt, it's really a good idea to reach out to your provider to try and work out some kind of payment plans. A financial adviser or a financial counsellor might be able to help. Or you could even contact the National Debt Helpline, who could help you work out a plan on either freezing repayments or reducing these and putting some kind of payment plan into action.

If you've had to stop work due to sickness or injury, you may have some insurance either through your super fund or held outside of your super. So it's really important to give them a call and understand if you're eligible to make a claim. And the last thing you can do is really understand when you can access your super. So, most people have to wait ‘til their preservation age, which is between 55 and 60, before they can access their super.

So, understanding when you're able to access your super and also understanding what your qualifying age for the Age Pension is, which for most people is about 67, to understand what options are available for you in terms of generating some kind of income.

Shane: Thanks, Helen. I think there's a lot of good tips there, particularly the reference you made for people who may be finishing work due to ill health and the importance of insurance, and understanding what insurance you may have available to you.

So, you just touched on at the end there around someone being able to access their superannuation, possibly whether it be through unplanned retirement or retirement. So we use the term a preservation age, so the age in which a person can, in effect, have access to take their money out. If someone does have access to their superannuation, what are some options for them?

Helen: The first thing I would suggest that they do is go to our website and have a look at our super projection calculator. You can put in your current details, so your age, your current super balance, if you've got a partner, you can put their details in, you can put in what you're hoping to spend in retirement. And it will show you how long we expect your money to last based on your current situation. 

So, Shane, if you have met your preservation age, you could consider starting an account based pension or opening one of our choice income accounts. Effectively, this turns your money into an income stream during your retirement, but it still stays invested in the markets, where it could continue to grow. 

You've got a flexibility to also take lump sums out on an ad hoc basis if you need to for any unforeseen expenses. If you're forced to cut down your working hours, but not retire fully, you could consider a Transition to Retirement Income account, where you also will receive regular payments and can top up your take-home pay. Again, this is still invested in the markets where it could continue to grow.

Shane: Great. Thanks, Helen. Outside of superannuation, there's obviously a range of different government benefits that someone could access. So, obviously if they've reached the age of access to the Age Pension, but there may be some other forms of government assistance that someone could seek.

Helen: Absolutely. So if you've been forced to stop work due to illness or injury, you may be eligible for a disability support pension. You could apply to Centrelink to see if this is available. And if you are, or if somebody that you're caring for is sick or injured, you may also be eligible for a carer's payment or a carer's allowance. 

If, however, you have reached the Age Pension age, then you most likely will be eligible for an Age Pension. You just have to apply to Centrelink and give them all the information about your income and assets and then they will make an assessment of your eligibility.

Shane: So, Helen, if someone did access this superannuation earlier than they had planned, through early retirement, as you just discussed, but then in the future, for some reason, down the track, they were entering the workforce and then earning superannuation, can they contribute to superannuation again? What can they actually do?

Helen: Yeah, absolutely. You can now contribute into your super account without having to meet a work test until you turn 75. If you don't have an existing accumulation account, you can very easily open one of those online. And absolutely, if you change your mind and want to go back to work later on, that's absolutely fine and you can still continue with your income stream.

Shane: So, that's great. So, I think for some people, they might think, once I've made the decision to access my super, that's it. In the future, for whatever reason, whether it be through a new role or other areas of income, there are different ways in which you continue to grow and contribute to your superannuation. 

Now, obviously being forced into early retirement can be quite overwhelming for whatever reason it may be. Can you give our listeners some tips or ideas on where they might turn for help and support?

Helen: Yeah, absolutely. As we discussed, if you have to stop work due to sickness or injury of yourself or somebody else, definitely going to Centrelink and seeing what they can help you with is the first port of call. There are also some really great community organisations or centres where you can get some free financial counselling.

Often, if you've got some debt, they can help you with debt repayments or help you with a budget just so that you've got a more clearer idea of your current financial position. If you're struggling from a mental health point of view, there are lots of free online or over-the-phone services that can help you better understand your mental health. And also a visit to your GP to potentially look at some kind of mental health plan might also be beneficial for you.

You should also contact your super fund, most super funds, offer simple over the phone advice, or you can seek comprehensive financial advice if you feel that your situation is more complicated and speak to a financial planner.

Shane: Great. Thanks, Helen. So, as we said, people retiring earlier than they planned can be a really difficult and overwhelming situation, but it is quite common, and so, particularly your super fund is there for you for your retirement needs. So, by all means, always reach out to your super fund and if it's in the case of AustralianSuper, we can help point you in the right direction of other areas of help and assistance. 

So, Helen, as a financial planner, I'm sure you have clients that come and see you, who have been forced into early retirement. Can you give us an example where that has happened and where the member or the client has possibly been shocked in that outcome, but then through working with you, how that might have set them on the right path?

Helen: Yeah, I have seen people who predominantly have been retrenched earlier than they would have liked to have stop work. A gentleman that comes to mind was forced to stop work around the age 58. Initially, he was very shocked. As he'd intended on working until 65. However, having a look at his finances and looking at the finances of his partner and combining their situations together, we realized that the situation wasn't quite as bad as they had anticipated. 

And we were actually able to start an income stream and get a regular income that wasn't actually much different to their current living expenses. In the follow-up, he was quite happy now in retirement and realized that, you know, making this decision that was forced upon him wasn't actually too bad and they were really enjoying the time that they were getting to spend together and travelling around Australia.

Shane: Thanks, Helen. That's great. It actually does demonstrate the importance of seeking help and support in these sort of situations. It is actually quite common that we hear from some of the members we talk to on this podcast is that even when they had a planned retirement they weren't sure what they were going to do and the common theme is they actually didn't know how they had time to work. So, Helen, thank you for joining us today and we'll get you back very shortly.

Helen: Thanks, Shane.

Shane: Thank you for joining us today. If you're an AustralianSuper member and you would like to join us to share your story or have a question or topic you would like us to cover, then click the link in our show notes to get in touch. If you've enjoyed this podcast, subscribe and share with your friends and family. See you next time.