Famous Last Words – “Super’s Doing Well.”

/ Garrulous Gwendoline

With Bill working on for another two weeks, I arrived in Wollongong at the beginning of August 2008, just as the full force of the banking collapse in the US hit Australia. My expectation of a senior role in logistics and supply chain at the nearby steel mill collapsed with it. Those who had head-hunted me were made redundant themselves. A fifty-three year old female without a Uni degree whose background was in male-dominated industries, now living in a city with a fraction of the population of Sydney, had no place in what remained of a job-market. In fact, there was no job market left for anyone.
We’d planned to live on Bill’s super (because he was old enough to claim it), but we hadn’t planned to depend on it. Since writing the following re-blogged post, I’ve picked up many international followers. So I’ll try to explain Australia’s retirement income system in broad-brush.
Since 1992 – and in Bill’s case, 1974 – working employees forgo a percentage of their wage before tax. Currently that’s 9.5%. This money is owned by the individual, who invests it with their choice of superannuation fund. It pays to understand their performance and your capacity for risk when making that decision. It’s taxed going into the fund, but at a much lower rate than regular income tax. You cannot access it before age 55 and only then if you are no longer working. Barring embezzlement, mismanagement, fee gouging and economic downturns (all of which I’ve experienced), that regular saving grows due to the magic of compound interest. You can also add additional money if you can spare it. I used to recommend to my young clerical colleagues to forgo one store-bought coffee a day. $1000 a year over thirty years can be a nice little earner in super. By the way, combined across all the funds, Australian superannuation assets totalled A$3.0 trillion at the end of the December 2020 quarter.
As a back-up we have the Aged Pension paid from Government coffers. This money comes into consolidated revenue from the taxpayer, but is not earmarked for the individual and has no relationship to how much tax one paid in their working life. It doesn’t cut in until you reach a certain age, and it is subject to an asset and income test, although thanks to pork barrelling by a previous government, one can have significant assets and still earn a part aged pension. It’s a not-very-generous fixed amount, depending on whether you are married or single, home-owner or renting. Not every Australian qualifies for an aged pension, but for those who are totally reliant on it, life can get very tough, especially if you are in the rental market. Our fastest growing homeless sector is single women over sixty. Casualisation of the workforce, low wages, time out of the paid workforce, ill health and family breakdown are some of the causes.
Lots of variations on these themes, but that’s the umbrella explanation. Hope that puts this next little piece into context …

Garrulous Gwendoline's avatarThe Reluctant Retiree

If anything is certain, it is that change is certain.

The world we are planning for today will not exist in this form tomorrow.

Phil Crosby, American Businessman

When Bill and I decided to buy into Wollongong I was working for a global shipping line, a world leader in the movement of cars and containers. It was a responsible position heading up the front-line customer service for import, export and equipment handling Australia wide.

The company had decided to migrate its computer systems onto the intranet, and integrate shipping and cargo data into real-time world-wide. It was a massive project, with Australia as the first area to go-live. It was the type of software implementation that is quoted in “how-to” manuals – under the section labelled “What can go wrong when ……….”

The U.S. team who were leading the project had joked to me that they decided to throw…

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32 thoughts on “Famous Last Words – “Super’s Doing Well.””

  2. I am so pleased to know from following your blog that following the financial crash and your retirement that you’ve been able to do so much and travel widely. Planning for a retirement is always a gamble both ways don’t you think. Like Bill’s dad not everyone gets there to benefit from prudent saving. Also I know that my daughter’s generation don’t see pension schemes or the present financial system as survivors in the fallout of the oncoming climate crisis. We all live with change, but the extent of change that humanity faces in the next 25 years plus is on a different scale. Covid is a kind of ‘live test’ and the jury is out on how well the global community is coping so far. Well done to New Zealand and you folk in Australia, but UK, US, Europe, Brazil . . .

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    • Your pension system in the UK is vastly different to ours, so I can imagine there is a certain level of distrust in whether any money will really be there at the end. Here you know at any time exactly what your current balance is, and if you are working, have no choice in the matter regarding contributing. A percentage of your wage is automatically deducted before you get to touch it. But you can choose to invest in socially responsible enterprises, which is a nod to the concerns of climate change and corporate greed.
      I did some modelling based on our pot earning 6-7%/year and the cost of living increasing 2-3% per year … but when the financial crisis hit all that went out the window. I was so apprehensive we would deplete the capital, but, thankfully, that has not been the case. Meaning we enjoy a comfortable lifestyle which does allow us the indulgence of travel, and much of that is attributable to Bill’s union insisting their members contribute to a super scheme twenty years before it became government legislation.
      We’d no sooner booked a short break in Cairns Qld for mid-May, our first venture across the border for more than 12 months, when Brisbane had a COVID outbreak and went into a snap three day lockdown. Two of those infected persons (a nurse who’d contracted the UK variant in hospital from an infected immigrant, and who then passed it on to her friend) unwittingly went to a place called Byron Bay, which was due to host a Blues Festival, and that was cancelled at the last minute for the second year running. So tough on everyone but you can imagine what would have happened if 15,000 from all over two states had attended, been infected and then returned to their homes. So far, our governments and health authorities seem to be successfully dousing these spot outbreaks.
      Bill will get his first vaccine next week, but I am not in this current roll-out. I think it will be June before they get to me.

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      • That’s so interesting to read. I hadn’t heard about the Brisbane cases. Also, interesting on how efficient your systems are to trace somebody’s movements accurately. Our local NHS contact, trace and isolate public health are pretty good, but unfortunately the government has heavily pushed their Track & Trace App and that has been far less successful and is certainly not thorough at following up. I am impressed too that the Blues Festival was cancelled so promptly. I can’t see that kind of caution and speed occurring here when we do finally get out of lockdown and real life events return. And, to add spice to the mix we have quite a large number of Covid deniers who have been ready to scream foul the minute any extra interventions look likely as they continual challenge the restrictions. My own MP (an over ambitious, lacking in any meaningful talent Tory) was recently lobbying for an early release from lockdown and yet still we have half the adult population unvaccinated. The NHS have been working brilliantly ensuring large numbers are speedily vaccinated. I had my first jab six weeks ago and my younger sister had her first four weeks ago. In our family it’s only the youngsters, all under 30 that haven’t been jabbed to date. My daughter is back working in her lab and the university have set up a system for all staff and postgrads to have a couple of Covid lateral flow tests each week. What a strange world we now live in? Keep safe.

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        • Most of us have to use an app that records when we check in and out of places; and on top of that, the health tracing teams interview everyone who is a confirmed case. It’s amazing how mobile some people are in the course of their daily routines.
          We also have our deniers, and Byron Bay happens to be an area of alternative lifestyle, so many will choose against vaccination. Fortunately, the media seem to be slowing down on reporting radically extreme views or stoushes over mask wearing.

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  4. I love the Phil Crosby quote, Gwen. It is so very true. I cringe reading this post, but it appears that you have managed quite well to weather the storm so to speak. Isn’t it amazing how, despite a crisis every once in a while, one continues living and even thriving? I’m so glad you are reblogging these old posts as I never seem to find the time to go back to the beginning of a blog, when I find someone whose musings I enjoy reading.

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  6. A series of mistakes, and robbery and personal changes and incompetence and I lost almost everything except the old age pension. But I’m happy I am a naturally content person. There is no way I could change things now by crying about it.

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    • I was fortunate the embezzlement experience happened in the early stages of my super, and the perpetrator was forced to repay us the capital.
      You have had so many life styles in your time, and I know you are making the best of this one. Living in the moment, and contentment, are key.

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    • Ah yes. That was one of the variations I didn’t go into to. Defined benefits we call them. Bill was originally like that,but after the waterfront dispute similar to your Liverpool dockers, the scheme was converted to accumulation. Long story. And others in my family have it on account of their government jobs before the system changed when the government realised they would eventually run out of money. They are also reversionary, and one of the spouses is thirty years younger!

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  9. Phil Crosby’s right, “If anything is certain, it is that change is certain”. But even knowing that in advance can’t put a stop to change. A lot of us were stuffed around last year. My partner wanted a couple of years more before retiring, a relative who’s in entertainment had gigs set up for 2020, both in Oz and overseas.

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