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Speaker 1: Hello, and welcome to The Australian's Money Positive podcast. I'm

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Speaker 1: James Kirkby. Welcome aboard everybody. We hear so often in

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Speaker 1: investment circus this question how much should you have in super?

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Speaker 1: But you know another question that's almost as relevant. It's

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Speaker 1: certainly relevant for the majority of Australians because you probably

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Speaker 1: know the majority of Australians have access to a full

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Speaker 1: or part pension. So a better question sometimes is what

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Speaker 1: is the optimal amount I should have in super so

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Speaker 1: that I can access the government pension because thirty thousand

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Speaker 1: a year income stream is nothing to sniff at government guaranteed. Now,

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Speaker 1: inside financial advice, this is called the retirement sweet spot,

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Speaker 1: and whether you intend to access this or not, you

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Speaker 1: should know what it is so that you can optimize

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Speaker 1: your own SUPER accordingly. My guest today is Hugh Robertson.

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Speaker 1: He's a Baron's Top hundred financial advisor. He's at Center

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Speaker 1: of Financial Services and he has been a regular on

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Speaker 1: the show.

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Speaker 2: How are you, Hugh, I'm really good, James, So I'm

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Speaker 2: excited about today's topic.

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Speaker 3: It's right now sweet spot, so it's a good day.

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Speaker 1: Well, I'm glad it is because I thought I knew

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Speaker 1: an awful lot about this area. I'm still amazed at

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Speaker 1: the majority of people, that is, the majority of people

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Speaker 1: over in their sixties and onwards who are of that

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Speaker 1: age have access to a pension or a part pension.

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Speaker 1: So this sweet spot is where there's an argument to

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Speaker 1: say instead of certainly an argument to say, unless you

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Speaker 1: have plenty in super and you don't care about the pension,

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Speaker 1: then most people and a lot of listeners on this show,

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Speaker 1: we'll want to know what is the amount I should

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Speaker 1: aim for. At the same time, I can get that

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Speaker 1: government pension because I'm entitled to it because I've worked

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Speaker 1: all my life, and that's fair enough. So let's talk

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Speaker 1: about that. Maybe we'll just make it simple for everybody.

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Speaker 1: We'll talk about couples, okay, because that's a sort of

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Speaker 1: very much a key sort of unit in this area. Now, what,

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Speaker 1: very broadly, what is the if I'm thinking and I'm

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Speaker 1: in a couple, I'm thinking, we're doing this, we're saving,

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Speaker 1: we're trying to build up our super. But I don't

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Speaker 1: want to be at that point where I've got a

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Speaker 1: good bit of super, but I completely missed the pension.

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Speaker 1: But I don't have so much in super that I

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Speaker 1: can have a yacht on Sydney Harbor. So what's the

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Speaker 1: what is the sweet spot?

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Speaker 2: What?

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Speaker 1: Very roughly you and I know it's not easy, but

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Speaker 1: let's just have a go at it. What is what's

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Speaker 1: the dollar range here that we're talking about.

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Speaker 2: This is a great question and something I'd love all

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Speaker 2: the listeners to really understand because it's the number we

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Speaker 2: would say is between that sort of six to eight

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Speaker 2: hundred thousand, and it's the strategies that come with that

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Speaker 2: before the age of sixty seven when we're all eligible

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Speaker 2: for age pension, that we've really got to enable in

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Speaker 2: terms of what we can do with concessional contributions, catch

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Speaker 2: up contributions, quite possibly bring forward contributions. So it really

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Speaker 2: goes head in hand with what we can do with superannuation,

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Speaker 2: what we can do with gifting. So that would be

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Speaker 2: our sweet spot. For a homeowner couple, we've got to

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Speaker 2: probably make that distinction as well, that we're assuming that

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Speaker 2: they're homeowners. Then you are looking at that six to

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Speaker 2: eight hundred thousand.

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Speaker 1: Okay, okay, So first of all, folks, you've heard you've

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Speaker 1: heard it here. For us, the sweet spot is six

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Speaker 1: hundred sweet hundred thousand. That's our current numbers. Okay, all

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Speaker 1: sorts of provisers around that, but that's broady arranged for

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Speaker 1: the sweet spot. Now if that's a sweet spot here.

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Speaker 1: The other question I want to try and get sort

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Speaker 1: of on the table simply for this show, is there's

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Speaker 1: probably a patch then where, like everything else, when you

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Speaker 1: have social welfare or you have government incentives of any description,

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Speaker 1: including the age pension, there's probably a band that you

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Speaker 1: don't really want to begin where you just missed the pension,

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Speaker 1: but you don't have you don't have blue Sky, right,

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Speaker 1: you don't have so much in super that you don't

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Speaker 1: care what the pension is. What would that band be?

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Speaker 1: What would be the danger zone there or the trouble zone?

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Speaker 2: The danger of the trouble zone is really around that

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Speaker 2: nine to seventy five thousand up until the up until

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Speaker 2: about a million fifty The age pension for a couple

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Speaker 2: runs out at one million fifty nine thousand currently, So

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Speaker 2: if you're getting up around that limit, that's a worrying

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Speaker 2: time because you don't for the majority of listeners out

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Speaker 2: there we've ever had to go through an age pension

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Speaker 2: application process, you wouldn't want to have to rego through

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Speaker 2: that because that would bring up PTSD.

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Speaker 3: For a lot of people. That's quite yes, quite a process.

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Speaker 1: When you get a full pension, it's an income stream, right,

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Speaker 1: I mean, how much do you think you'd a person

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Speaker 1: to get that amount a couple annually that they getting

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Speaker 1: the pension that income stream? How much do you reckon broadly?

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Speaker 1: Somebody would have to have invested to get that.

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Speaker 2: Yeah, so when we look at for that, you're a

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Speaker 2: couple would get forty five thousand if they qualified for.

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Speaker 3: A full age pension. Even if you've got.

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Speaker 2: Just do easy maps and say well, if I got

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Speaker 2: four and a half percent on my money in a

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Speaker 2: term deposit, that's forty five a year, I've got to

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Speaker 2: have a million dollars.

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Speaker 3: So for a full age pensioner to get their.

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Speaker 2: Forty five thousand, it's the same as someone having a

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Speaker 2: million dollars. So that that's where you say, people say, well,

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Speaker 2: why am I working so so bloody hard to put

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Speaker 2: all my money away if I could get the same amount?

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Speaker 2: And that we could touch on that later because there's

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Speaker 2: every chance that the rules changed significantly over the next decade.

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Speaker 1: They're not going to they're not going to get more generous. Okay,

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Speaker 1: but that's the point. That's such a good point. You

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Speaker 1: know that you needed to have that money to get

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Speaker 1: that income, you'd want to have about a million saved.

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Speaker 1: Put simply, it's worth a million dollars. So it's worth

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Speaker 1: thinking about and listeners. You can make your own mind

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Speaker 1: up whether you want to play this game or don't

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Speaker 1: play this game, or you aspire to say I don't

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Speaker 1: care what the pension is because I'm going to pass

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Speaker 1: those levels. But as I say, look at the numbers,

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Speaker 1: the majority of Australians have access to full pensions. So

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Speaker 1: it's extraordinary how it works. So, just in terms of

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Speaker 1: before we go into what might happen to it, you

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Speaker 1: that are people aware of it outside of financial advice circles,

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Speaker 1: That do people design their super strategies around it?

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Speaker 2: No, at this stage no, I feel there's been so

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Speaker 2: much regulatory change and legislative change with the superhneration system,

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Speaker 2: with the age pension system that people haven't really factored

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Speaker 2: that into the strategy. You've extended the age to sixty

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Speaker 2: seven for both males and females to access it now,

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Speaker 2: so really you've got to start thinking about it at

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Speaker 2: age sixty two around.

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Speaker 3: You know, because you could.

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Speaker 2: Utilize quite possibly you could utilize gifting strategies to your kids.

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Speaker 2: Why would you want to do that? Well, number one,

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Speaker 2: it might help them into the housing market right now.

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Speaker 2: Number two, it might be able to maximize your age

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Speaker 2: pension entitlements. But if you did it within five years,

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Speaker 2: it's going to count towards your assets and might impact

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Speaker 2: your eligibility for a pension.

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Speaker 1: Well, they tracked back five.

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Speaker 2: Years, five years, So you've got to be very intentional

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Speaker 2: with what you do. And that's probably our challenge to

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Speaker 2: clients is all our financial plans need to have that

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Speaker 2: element of intentionality with them.

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Speaker 3: Let's not become successful by accident. Let's do it on purpose.

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Speaker 1: So you can't turn around as sixty for and say

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Speaker 1: I know what I'll do, I'll double the size of

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Speaker 1: my home and get back in onto the pensions too late,

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Speaker 1: is it.

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Speaker 3: Well, no, we could do that.

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Speaker 2: We could definitely do that, because the home is going

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Speaker 2: to be an exempt asset under undercurrent rules that may change.

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Speaker 2: Have got to be careful and definitely that's a strategy

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Speaker 2: that some people have thought is I'll just put more

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Speaker 2: money into a house. The challenge there now is the inflation,

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Speaker 2: the inflated price of renovations or new houses. Plush your

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Speaker 2: stamp duty plus your agent fees selling means that you've

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Speaker 2: probably to do that.

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Speaker 3: You've probably given up a couple one hundred thousand dollars.

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Speaker 2: And the reason why you want to still maintain that

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Speaker 2: you do have a balance throughout your tirement is also

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Speaker 2: for age care down the road.

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Speaker 3: So you don't want to you don't want to leave

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Speaker 3: yourself with nothing.

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Speaker 2: You kind of want to be able to live off

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Speaker 2: the income, maximize the age pension where you can, but

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Speaker 2: still have enough that if one spouse needs to go

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Speaker 2: into age care, you can. The dilemma baby boomers are

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Speaker 2: going to have around that is that there's probably more.

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Speaker 2: I went through it with my mum recently and there's more.

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Speaker 2: There's more people wanting beds that there are beds available.

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Speaker 1: I know, yes, almost entirely separate. Sure we could do

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Speaker 1: on that and I should seem to do it in

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Speaker 1: the future. Just on just still on this issue about

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Speaker 1: you said gifting so one way obviously, and none of

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Speaker 1: these are productive and you can understand why they are.

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Speaker 1: Under a few folks, and we'll talk about that in

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Speaker 1: the next segment, tell us about the gifting. What can

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Speaker 1: you do to get back into the sweet spot?

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Speaker 3: Yep, to the sweet spot. Really great question.

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Speaker 2: So ideally we can give five years before our entitlement,

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Speaker 2: you know, but again do it.

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Speaker 3: Don't play defense just for defense sake, you give gifts

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Speaker 3: to it.

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Speaker 2: If you had a younger spouse, you could try and

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Speaker 2: maximize their superannuation instead of yours. Then when you are

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Speaker 2: of age pension age, your superannuation will be accessible, but

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Speaker 2: there's wouldn't be.

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Speaker 3: So you can be really clever around that.

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Speaker 2: You could also something that's probably a little bit future planning,

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Speaker 2: but when you are looking at what to do is

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Speaker 2: how you're going to leave your estate, not necessarily to

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Speaker 2: your spouse, because then as a single age pensioner, if

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Speaker 2: you left all your money to them, they might then

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Speaker 2: lose out on the age pension. And you could do

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Speaker 2: the renovations around the house. You could spend the money

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Speaker 2: on the holidays and the things that you want. And

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Speaker 2: that's probably our ideal goal with clients is well they've

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Speaker 2: got the health, fit and the ability and the want.

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Speaker 3: To travel and do all those experiences, do.

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Speaker 2: Them while you can, and knowing that if I'll give

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Speaker 2: a quick case day, like if you had eight hundred

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Speaker 2: thousand in retirement, and say that's a couple homeowners and

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Speaker 2: they're accessible. Typically as an advice, we'd say draw down

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Speaker 2: about five percent of the balance a year, so that

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Speaker 2: would be forty thousand a year from there. We're assuming

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Speaker 2: that it's a superannuation income stream from there, and their

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Speaker 2: age pensioning titlement would be about twenty thousand, one eight

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Speaker 2: nine a year, So that total would give that person

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Speaker 2: with a couple with eight hundred thousand, they would get

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Speaker 2: sixty thousand.

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Speaker 3: One eight nine a year. If though that person spent.

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Speaker 2: One hundred thousand on the holidays and these great experiences

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Speaker 2: and memories for life, we would then still say, okay,

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Speaker 2: now you've only got seven hundred thousand, so draw five

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Speaker 2: percent of that a year. So they're taking thirty five

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Speaker 2: thousand out of there. But here's the kicker, Jameson and

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Speaker 2: something that always amazes me, they would now get close

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Speaker 2: to twenty eight thousand year age pension in titlement as

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Speaker 2: a couple. So instead of the sixty one to eight nine,

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Speaker 2: the one hundred and nine that the couple got with

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Speaker 2: eight hundred k, the couple with seven hundred k actually

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Speaker 2: gets close to sixty three thousand dollars a year, so

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Speaker 2: they get more cash flow even though they've got less capital.

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Speaker 2: So this is why we're talking about wesson speak throt.

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Speaker 1: Maybe it just really spelled us out. They spent one

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Speaker 1: hundred thousand having a good time and they get more

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Speaker 1: income because they did that. Hey, we're going to take

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Speaker 1: a break here because folks, you're going to have to

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Speaker 1: digest that. And it also does give us something of

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Speaker 1: a entree to the issue of whether this is all

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Speaker 1: making sense and whether it should be reviewed. Okay, back

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Speaker 1: in a moment. Hello, Welcome back to The Australian's Money

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Speaker 1: Puzzle podcast. I'm James Kirby talking to Hugh Robertson of

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Speaker 1: Centaur Financial Services and we're talking about the retirement sweet spot.

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Speaker 3: Now, if you.

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Speaker 1: Could actually believe what Hugh was just telling you in

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Speaker 1: the first segment about how there are situations where having

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Speaker 1: less money is better in terms of your retirement income,

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Speaker 1: that's part one. That's all about the pension assets test.

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Speaker 1: Now overriding all this, we have this month what they

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Speaker 1: call the productivity somewhat but which really should have been

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Speaker 1: called the tax summat and that's coming up pretty soon.

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Speaker 1: That's Jim Chalmer's big It may be more than just

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Speaker 1: talkfest in camera, but if you look at it closely,

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Speaker 1: the submissions that are being met to this are all

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Speaker 1: about tax, and I would take a sweep and say

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Speaker 1: virtually half those submissions are about wealth tax and introducing

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Speaker 1: elements of wealth tax, which can certainly be justified on

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Speaker 1: the basis that the system is very much tilted in

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Speaker 1: favor of older Australians and against younger Australians in accumulation phase,

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Speaker 1: particularly in Super Okay, Now here's the thing. The pension assets,

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Speaker 1: even the numbers you were putting out there, Hugh, there

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Speaker 1: are an I can actually zone in on the Department

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Speaker 1: of Social Services Tania Plippersex Department has had internal advice

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Speaker 1: that this area should be reviewed and pension asset tests

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Speaker 1: are likely to be reviewed as part of this summat

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Speaker 1: could be reduced. Is that a fair assessment of the situation.

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Speaker 2: Yes, we've got an aging population, We've got this dependency

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Speaker 2: ratio used to be four workers to.

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Speaker 3: Every one retiree.

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Speaker 2: Now we're get into this operation two two and a

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Speaker 2: half workers two workers. So at some point it's how

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Speaker 2: are we going to fund an age pension system. We've

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Speaker 2: probably been the lucky country from resources in terms of

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Speaker 2: our taxes there, but at some point the wealth tax

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Speaker 2: is going to come in. I think we all can

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Speaker 2: see it in one way or another, and I think

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Speaker 2: that you're also going to it. At some point age

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Speaker 2: pension will drop down.

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Speaker 1: Do you mean you mean the access to the not

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Speaker 1: so much eat because it's indexed to inflection, but the

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Speaker 1: access to it will be tightened. Is that where we're

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Speaker 1: Is that what's on the line.

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Speaker 2: I feel it needs to be, because otherwise you're going

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Speaker 2: to I don't know how you keep taxing young people

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Speaker 2: when we that affordability is such an issue, has in

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Speaker 2: such an issue. So we're in a pretty it's a

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Speaker 2: pretty big pickle at the minute to try and resolve.

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Speaker 2: So I hope that the people in Cambri can work

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Speaker 2: hard to solve them.

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Speaker 1: I mean, it is it's ludicrous. I mean, the amount

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Speaker 1: that you can put into super hasn't changed for years,

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Speaker 1: but the amount you can have tax three and super

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Speaker 1: goes up all the time. It's two million now, But

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Speaker 1: the amounts you can put in at the other end,

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Speaker 1: Paranamus thirty thousand, don't changed. It was thirty thousand ten

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Speaker 1: years ago. That's the sort of thing that I think

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Speaker 1: justifiably should be reviewed. It's going to be reviewed, folks.

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Speaker 1: I think there's two things to understand. I suppose this show.

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Speaker 1: One is a retirement sweet spot. You heard Hugh's numbers.

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Speaker 1: Just be aware that those numbers may drop if various

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Speaker 1: lobbyists and factions that are ready to roll up to

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Speaker 1: this summit have their way, which is coming up this

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Speaker 1: month of August. One other thing you mentioned about the

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Speaker 1: tax about the family home being exempt. So all these

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Speaker 1: numbers we talk about, we assume the personnels their home

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Speaker 1: and the home is just not included. Is that right?

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Speaker 1: Do you think it will ever be included? The value

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Speaker 1: of the home.

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Speaker 3: It's been discussed, it's certainly being discussed.

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Speaker 2: And whether it's really difficult, like the price of a

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Speaker 2: house in Sydney. Does someone get disadvantaged because they live

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Speaker 2: in Sydney close to their family, part of their community

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Speaker 2: forever versus someone who lives in Tasmania where the house

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Speaker 2: is cheaper. Would you then segregate it based off what

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Speaker 2: state you live in, what region you live in?

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Speaker 3: So I the.

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Speaker 2: Kind of almost like the div two ninety six and

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Speaker 2: the issues that we had with that.

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Speaker 3: It's how do you actually administer rule rules like that?

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Speaker 2: And is it The example that we used to use

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Speaker 2: was if someone's lived in that house, if there's a

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Speaker 2: typically women live longer than men's. If there's an old

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Speaker 2: widow that lives in the house that the family grew

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Speaker 2: up in and they've been there for forty five years,

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Speaker 2: but now it's worth five million.

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Speaker 3: She's not she should she? So that should she be

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Speaker 3: penalized for that?

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Speaker 1: If she had no cow should be on the pension?

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Speaker 1: So should her a pension be reduced because the houses

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Speaker 1: were ten million that she bought it for five nineteen

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Speaker 1: sixty two?

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Speaker 2: Yeah, so you know, that's the equity conversation. He's in

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Speaker 2: terms of a financial equity, but what's a fairness? So

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Speaker 2: I can't see it ever, especially with the majority of

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Speaker 2: voters being of more grayer hair, I can't see a

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Speaker 2: government bringing that in right, that would be that politically

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Speaker 2: divisive for them.

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Speaker 1: Okay, that's the inclusion of the family home. But interestingly,

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Speaker 1: you do allow for the fact that they could review

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Speaker 1: the pension as a test. Yeah, okay, very interesting. We've

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Speaker 1: got some really good questions. I want to get to

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Speaker 1: them in a moment before I do. He was a

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Speaker 1: little announcement to make for somebody.

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Speaker 3: I thank you.

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Speaker 2: I would like to wish my son, Archer, a happy

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Speaker 2: eleventh birthday.

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Speaker 3: It's an amazing thing. We get to help all these retirees.

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Speaker 2: And the one thing they always tell me is never

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Speaker 2: miss out on your kids growing up, because that's the

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Speaker 2: one thing you can't get back. So I did ask

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Speaker 2: James if I could give a shout out to him,

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Speaker 2: and hopefully he listens to this podcast.

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Speaker 1: Well, at least he'll hear. He'll probably hear that he

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Speaker 1: was mentioned Donald. Well, my story straight off the top

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Speaker 1: of that about birthdays terribly. I make sure I never

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Speaker 1: missed a birthday. But I did miss one birthday and

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Speaker 1: it was my daughter, and it was October two o eight,

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Speaker 1: and it was the day the world came very close

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Speaker 1: to collapsing. The nearest thing in my life it leads

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Speaker 1: to a complete and total financial collapse. Was this Saturday

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Speaker 1: in October, which was her birthday, and I was being

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Speaker 1: asked to do so many things. It was a Saturday,

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Speaker 1: I was on Sunday newspapers and I was on radio

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Speaker 1: and I missed this birthday party. Two. Wait, so what

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Speaker 1: was she nine? Well, let me tell you, boy, did

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Speaker 1: I get it in the neck about that? So I

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Speaker 1: explained to her, And in recent times she whenever I

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Speaker 1: bring it up, and I bring it up more than

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Speaker 1: she does now I say to her, So you see,

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Speaker 1: it was the most dangerous day financially in the history

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Speaker 1: in my life. And I'm a financial journalist. So Darling,

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Speaker 1: sorry about that, but I hope I can never make

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Speaker 1: it up, but I can explain it.

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Speaker 3: All right.

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Speaker 1: We'll be back in a moment with some great questions

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Speaker 1: from George and Bruce and Paul f. Hello. Welcome back

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Speaker 1: to The Australian's Money Puzzle podcast. James Kirby and Hugh

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Speaker 1: Robertson here now listener questions. This week, there's a terribly

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Speaker 1: act question from George. I want to read that first,

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Speaker 1: Dear James, your article in this week's Australian that the

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Speaker 1: super inheritance tax can be avoided by withdrawing all your

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Speaker 1: super money before you die or by a recontribution strategy.

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Speaker 1: I think there is a third way around this, if

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Speaker 1: you make a binding nomination in your super fund that

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Speaker 1: upon your death, your benefit is paid to your estate,

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Speaker 1: then it is my understanding no taxes payable then. And further,

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Speaker 1: when the result in super cash is received by the

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Speaker 1: estate is paid out to the beneficiaries in your will,

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Speaker 1: no tax is payable then either. Gee, I don't know

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Speaker 1: about that, but I happen to have a few robertson

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Speaker 1: in the studio, and he's going to tell us if

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Speaker 1: that's true, true or false?

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Speaker 3: George that he's false.

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Speaker 1: I thought I've got a binding nomination on my super

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Speaker 1: I never thought it could step aside the rules.

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Speaker 3: Okay, I liked the question and I like looking at it.

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Speaker 3: But in terms of what can we do.

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Speaker 2: We can withdraw this tell us the day you're going

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Speaker 2: to die, so we can withdraw it the day before

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Speaker 2: the recontribution the because ultimately it goes to the end user,

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Speaker 2: so even it goes through the estate, it will go

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Speaker 2: through to that. If he is your spouse or dependent,

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Speaker 2: a tax dependent, then there won't be that's a spouse

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Speaker 2: child under eighteen dependent in tendency if it's an adult child.

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Speaker 1: But in most cases it's adults dependent and they are The.

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Speaker 2: One I did we have seen is an insurance equalization strategy.

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Speaker 2: So sometimes if people know that they're going to have

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Speaker 2: to pay the tax for whatever reason, or they want

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Speaker 2: to equalize the estate, sometimes they will have they will

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Speaker 2: retain their insurance policies and pay that outside of SUPER

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Speaker 2: and pay that to their children. So again that's not

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Speaker 2: there's not a tax on that. But again the insurance,

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Speaker 2: the insurance premiums as you get older prohibitive.

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Speaker 1: We'd go through the roof, I thought. So, okay, very interesting, George.

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Speaker 1: That's not advice. Information only all the Georges in the world.

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Speaker 1: That's for you to ponder. But I'm afraid if you

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Speaker 1: thought you found a way around the seventeen percent de

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Speaker 1: facto inheritance tax on SUPER, that isn't one. It looks

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Speaker 1: like Okay, there's a question from Bruce.

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Speaker 3: Okay, so Bruce has asked.

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Speaker 2: A recent guest was not impressed with dividend r reinvestment plans. However,

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Speaker 2: I suspect the issue is far more complex. Would it

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Speaker 2: be possible would have a discussion on the pros and

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Speaker 2: cons of such plans, what can be used instead, and

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Speaker 2: if any research is being carried out as to how

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Speaker 2: things are in the real world.

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Speaker 1: Okay, thank you, Bruce. Look, dividend reinvestment plans. I think

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Speaker 1: they're a bit like mortgage mortgages, or by that, I

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Speaker 1: mean they are a discipline. And if I get my

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Speaker 1: dividends in cash and it flows into my account, I've

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Speaker 1: got to make a decision every time, on every dividend,

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Speaker 1: what am I supposed to do with that money? If

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Speaker 1: the comp I love the old thought that I don't

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Speaker 1: know where this came from, but there was that thing

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Speaker 1: that if something is good enough to have in your portfolio,

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Speaker 1: it's good enough to reinvest. I's a fact or dividend

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Speaker 1: reinvestment plans are fine or do you think you.

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Speaker 3: Pros?

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Speaker 2: Definitely the compound and if you look at even just

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Speaker 2: the ASX over time, just the price return versus the

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Speaker 2: price and dividend return, you know that compound and effect

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Speaker 2: is massive.

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Speaker 3: There's a cost of fishing. See you're usually not paying

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Speaker 3: brokerage when you're invent.

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Speaker 1: Less important than it used to be, Yes, but still relevant.

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Speaker 2: Yeah, behavioral, you don't have to think about it. But

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Speaker 2: I do know that a lot of people like to

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Speaker 2: not do the DRP that even an reinvestment plan. So

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Speaker 2: because there is the timing of when you actually purchase,

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00:23:22,080 --> 00:23:24,679
Speaker 2: do you want to purchase. Is it an ideal time

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00:23:24,720 --> 00:23:28,280
Speaker 2: to purchase just because the DRP has happened. Sometimes it's

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Speaker 2: better to keep the money in cash and wait. It

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00:23:31,240 --> 00:23:33,320
Speaker 2: is if you talk twenty accounts out there, and I'm

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00:23:33,320 --> 00:23:35,600
Speaker 2: sure you've got a lot of listeners for accounts, that's

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00:23:35,600 --> 00:23:39,560
Speaker 2: probably the bane of their existence. DRPs and accounting for them.

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00:23:39,880 --> 00:23:44,880
Speaker 2: For our retirees, cash flow can be an impact.

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00:23:44,680 --> 00:23:47,080
Speaker 1: Of course, yeah, but in accumulation. Look, the other thing

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00:23:47,119 --> 00:23:51,639
Speaker 1: I would say is I have never sold. I have

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00:23:51,720 --> 00:23:55,840
Speaker 1: never closed down a dividend reinvestment plan, but I have

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00:23:56,760 --> 00:24:01,600
Speaker 1: occasionally it has triggered me to sell the share. So

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00:24:01,800 --> 00:24:03,400
Speaker 1: but that comes back to the same thing. If it's

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00:24:03,440 --> 00:24:06,119
Speaker 1: good enough to sign up for a d ORP, then

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00:24:06,119 --> 00:24:08,120
Speaker 1: it's good enough to have. And if it's not good

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00:24:08,200 --> 00:24:11,120
Speaker 1: enough to have a d ORP, a dividend reinvestment plan going,

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Speaker 1: why are you in that stock in the first place?

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00:24:13,400 --> 00:24:15,080
Speaker 1: That I mean, I think that would be the larger

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00:24:15,119 --> 00:24:17,639
Speaker 1: guide I would just I would put forward.

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Speaker 2: That's how we've basically alway, well not basically, that is

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00:24:23,200 --> 00:24:23,959
Speaker 2: how we've done it.

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Speaker 3: The only times we've then revalued is if there's concentration risk.

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00:24:28,800 --> 00:24:32,120
Speaker 2: So probably with bank stocks, we've got some GFC examples

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00:24:32,160 --> 00:24:36,040
Speaker 2: from clients, and that way, we've just accumulated so much

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00:24:36,040 --> 00:24:38,400
Speaker 2: wealth there we don't want to sell. Quite possibly because

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00:24:38,440 --> 00:24:41,439
Speaker 2: of the cgt SO capital gain SAX, SORR, I've got

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00:24:41,440 --> 00:24:43,760
Speaker 2: to stop using acronyms and then so we've tried to

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00:24:43,760 --> 00:24:45,200
Speaker 2: reallocate that money elsewhere.

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Speaker 3: But that's really the time, the only time when we

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00:24:48,160 --> 00:24:50,639
Speaker 3: don't do DRPs.

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00:24:50,960 --> 00:24:53,640
Speaker 1: Okay, we had all day long, nothing else to do,

469
00:24:54,359 --> 00:24:55,920
Speaker 1: then you could stay right on top of it.

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00:24:56,840 --> 00:25:01,840
Speaker 2: There was an ASEX shareholder study and this conclusion was

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00:25:02,600 --> 00:25:07,280
Speaker 2: that investors using DRPs don't track their performance or rebalance portfolios,

472
00:25:07,800 --> 00:25:13,080
Speaker 2: which was interesting, and professional portfolio rebalancing with dividend cash

473
00:25:13,359 --> 00:25:16,120
Speaker 2: is more flexible and aligned with goals. So I don't

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00:25:16,160 --> 00:25:21,359
Speaker 2: think that really answered much, but it long term DRPs

475
00:25:21,520 --> 00:25:25,160
Speaker 2: can outperform obviously when the companies do well, which over

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00:25:25,200 --> 00:25:28,120
Speaker 2: time they always do, so we're a fan of it.

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00:25:28,119 --> 00:25:31,359
Speaker 2: It's simple, it's easy, it doesn't take much mental brain

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00:25:31,440 --> 00:25:31,919
Speaker 2: power to do.

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Speaker 1: So that's right, and as I said, it is a discipline.

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00:25:35,119 --> 00:25:38,119
Speaker 1: Hopefully that's useful to you. Bluse Hughes. I thought a

481
00:25:38,200 --> 00:25:39,960
Speaker 1: very strong point from view that you're probably not playing

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00:25:39,960 --> 00:25:42,520
Speaker 1: at the idea time. But then on the other hand,

483
00:25:42,560 --> 00:25:43,880
Speaker 1: it's recurring.

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00:25:43,920 --> 00:25:45,919
Speaker 3: Dollar cost averaging, dollar caast averaging.

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00:25:45,920 --> 00:25:48,120
Speaker 1: It's a bit of it's a dollar cast averaging kicks

486
00:25:48,160 --> 00:25:51,640
Speaker 1: in there as a thematic. The final question is from

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00:25:51,680 --> 00:25:56,040
Speaker 1: Paul f. He says, taxi on realize gains has always

488
00:25:56,080 --> 00:26:00,960
Speaker 1: been a thing, though in directly so, why is dividend

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00:26:01,160 --> 00:26:04,520
Speaker 1: or division two ninety six been the new super tax

490
00:26:04,680 --> 00:26:11,080
Speaker 1: so controversial? Well, it was never There was never unrealized

491
00:26:11,160 --> 00:26:13,920
Speaker 1: gains tax in your super before Paul left, So I

492
00:26:13,960 --> 00:26:16,320
Speaker 1: suppose that's what it's really all about. Okay, you can

493
00:26:16,359 --> 00:26:18,760
Speaker 1: bring out the issue of land tax or whatever in property,

494
00:26:18,800 --> 00:26:20,879
Speaker 1: but it was never a case in Super. And the

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00:26:21,119 --> 00:26:23,120
Speaker 1: big question is if it's in Super, where it does

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00:26:23,160 --> 00:26:27,240
Speaker 1: it go next. We'll have to leave it there. Let's

497
00:26:27,280 --> 00:26:29,600
Speaker 1: have some questions on that, Let's have some comments on that,

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00:26:29,880 --> 00:26:35,480
Speaker 1: and I hope you found the retirement sweet spot well

499
00:26:35,480 --> 00:26:40,119
Speaker 1: worth thinking about understanding. And keep in mind that that

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00:26:40,200 --> 00:26:42,439
Speaker 1: act that first of all, the majority of Australians, the

501
00:26:42,480 --> 00:26:46,960
Speaker 1: majority of retirement age, have either an age full age

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00:26:47,000 --> 00:26:50,800
Speaker 1: pension or part pension. The issue is the access. The

503
00:26:50,880 --> 00:26:56,520
Speaker 1: access by some criteria has been relatively generous and it's

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00:26:56,560 --> 00:26:58,840
Speaker 1: something that is now going to be I think seriously

505
00:26:58,880 --> 00:27:02,879
Speaker 1: reviewed in the weeks ahead, this Productivity slash Wealth Tax summit,

506
00:27:03,119 --> 00:27:05,560
Speaker 1: which is coming up in a few weeks. Hugh Robertson,

507
00:27:05,720 --> 00:27:07,280
Speaker 1: thank you very much for being on the show. Great

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00:27:07,280 --> 00:27:08,280
Speaker 1: to have you as always.

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00:27:08,640 --> 00:27:11,040
Speaker 3: Thank you very much, James. I really enjoyed today.

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00:27:12,000 --> 00:27:12,560
Speaker 1: Really good.

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00:27:12,680 --> 00:27:13,160
Speaker 2: All right.

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Speaker 1: The email is the Money Puzzle at the Australian dot

513
00:27:17,359 --> 00:27:21,000
Speaker 1: com dot au And also before you go, one other

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00:27:21,040 --> 00:27:22,840
Speaker 1: thing coming up in the next few weeks where we

515
00:27:22,880 --> 00:27:26,960
Speaker 1: have a short series where we get some luminaries in

516
00:27:27,040 --> 00:27:31,160
Speaker 1: the financial space to talk about how they made their money.

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00:27:31,160 --> 00:27:33,920
Speaker 1: That will be presented by Julianne Sprague and it starts

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Speaker 1: Monday Talk soon