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Changing Landscape of Retirement #5 – Noel Whittaker – Transcript

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Changing Landscape of Retirement

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Noel Whittaker

XY ADVISER

Podcast

SUMMARY KEYWORDS

people, retirement, money, pension, spend, age pension, book, clients, years, retirement income, self managed fund, pay, planners, important, super, financial, health, life, conversation, levy

SPEAKERS

Fraser Jack, Noel Whittaker

 

Fraser Jack 

Welcome to the x y advisor podcast, a global community of financial advisors sharing and learning with one another to drive the positive evolution of financial advice. To get involved, go to x y advisor.com. Or simply download the x y advisor.

 

 

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Fraser Jack 

Welcome back to the xy advisor podcast. My name is Fraser Jack. And I’m joined here by a man who really needs no introduction. No Whittaker, welcome. Hi.

 

Noel Whittaker 

Great to be here. Fraser,

 

Fraser Jack 

thank you for being here. Now we’re chatting all things the changing landscape of retirement and who better to chat to then you obviously, you’ve just released a book all about retirement as well. And you comment a lot on radio and talk back. You write articles. You are a full time? Well, conversationalist, full time, producer of content on this topic. So thank you so much for chatting to us. It’s a busy space and the content, the content just keeps coming and coming. There’s more stuff every day. Yep. Yeah, definitely. There’s certainly Yeah, there’s lots of little pockets that we can go down and have conversation. But I thought we might start with the over the overall the overall size of the system, the overall size of the people that it affects that it’s involved all these, you know, we talk numbers, but they’re all individual humans coming through this new system, or the system that that’s growing and exploding. So let’s talk about the size of the system and how it’s coping. You know, where it is now and where it’s moving to?

 

Noel Whittaker 

Well, I think the world is facing this life expectancy, tsunami, I mean, people are living longer, but they often spend more on health care in the last year of their life than the rest of their life. Governments, thanks to COVID have borrowed massively. So you’ve got a much increasing demand at the same time as resources are drying up. So you know, the world is really between a rock and a hard place. Yes, the perfect storm, low interest rates haven’t helped either, because there’s a misconception that I need my money in the bank, which is the worst place to have it. So we need to educate people about investing wisely. You know, but it’s growing pressure.

 

Fraser Jack 

Certainly, as you mentioned that money in the bank conversation, it’s, it’s, it’s one of those things, it’s always been the secure place, isn’t it? It’s always been around that security, we’re talking

 

Noel Whittaker 

about risk. So you’re in our world risk means it’s volatile. But to the average man on the street or person in the street these days. Risk means I might lose it all. And that’s not what we mean when when they say we must invest in more risky assets, we mean more growth or retire the assets, but they think, Oh, I might lose it. Yeah, definitely, definitely the major issues of the retirement incomes policy that came out recently was that people need to be more efficient with their retirement savings,

 

Fraser Jack 

there was that there was a finding from that poll,

 

Noel Whittaker 

I had three basic recommendations for that from the retirement income review. The first was that people need much more education, they’re overwhelmed. Secondly, it’s all too complex. And that complexity is made worse by the interaction between aged care, pension, tax, you know, all those sort of things. And last of all, people still expected to have their superannuation intact, when they die. People are loath to spend this super, yeah. And because they like to spend their super, they then have a less good retirement that they may have had if they spent a bit better, which is why why have now got these are retirement income products yet, which can be very effective if used in the right place.

 

Fraser Jack 

Yeah. Now we’ll get to the mindset in a minute. And we’re just stuck back though to the overall system. And I know that obviously you’ve released the book recently. In in that book I read about just the sheer number of retirees coming through. So from 3.9 million sort of, well 2019 through to about 5.7 million,

 

Noel Whittaker 

I think in the next 10 years, just off the top of my head The over 70 fives, our fastest growing demographic will increase by 101%. That’s massive, but also to complicate it, their guests, one sort of people with on their own. Another is couples. And the third is a couple where one needs the care of the other one. That’s the tricky part. If you’re on your own, and you’re disabled or getting into bad health, who takes you to the doctor, and the hairdresser? who helps you with the bill payments? If you’re a couple and one needs care, there’s the other person who needs care that they in the home with you? Or are they in separate accommodation? You know, they talk about retirement being a worry free time, it’s probably the most challenging time in a person’s life.

 

Fraser Jack 

It’s extremely complex when it comes to, you know, separating partners and in years,

 

Noel Whittaker 

and then of course, often one partner dies and they remarry, which is fine. And they want to keep their finances in each side of the line. And that can create all sorts of estate planning. We can point to these. Yeah,

 

Fraser Jack 

estate planning complexes also when, when they’re being tested for income and assets. Is it is one of the two is it?

 

Noel Whittaker 

Yes, but also if I’m in New Form capital, and I’m old, and my partner has an A care and I pay the RA D when she dies, that’s part of her estate, not mine. That could be half a million dollars that my kids don’t get.

 

Fraser Jack 

Yep, so an absolute minefield. That’s it from the system as a whole. How do you think the system’s gonna go? You mentioned the perfect storm, like what? What does that look like? And what are the solutions?

 

Noel Whittaker 

Well, the whole the retirement income review is based on the fact that you’ll have your private savings and some sort of a lifetime pension and the age pension. And that’s the three pillars that the retirement income review said is the way it should work. So I guess the big one is, is the age pension sustainable? You know that there’s a lot of attacks on it. At the moment a couple can have over $800,000 and live in a million dollar home and still get a part age pension. You know, I would think that may change. I mean, about three years ago, they cut the assets tests. I can see that happening again. I think they are now saying why should a person with a pension. If you’re if you’re on the pension, you’re on welfare? Why should a person with $800,000 of financial assets be on welfare? They’re not just the fastest growing demographic, they all have plenty of time. And they all vote and they all talk. Now this year, there’s got to be an election. You saw what happened when the labour tried to take on the old is with the franking credits and things. So it’s becoming practically difficult for the government to make these

 

Fraser Jack 

changes. It is but from an economics point of view, it seems impossible that they can’t make the changes.

 

Noel Whittaker 

Well, no. I mean, you know, they just I believe that governments are basically hopeless of all persuasions they bangle. Yeah.

 

Fraser Jack 

Yes, that’s I guess, I guess that comes back down to a short term agenda

 

Noel Whittaker 

versus the newer IRA. government workers now will be monitored it again, through legal they go through compliance, if I can 70 hours a week to set this up. Yeah. Yeah. I mean, me, I can just do it. Because we’re just ordinary people.

 

Fraser Jack 

Yes. Now, I think if you and I managed our clients money, the way that the the the budget management probably end up in jail.

 

Noel Whittaker 

Yes.

 

Fraser Jack 

overspending and spending money they don’t have. But anyway, that that’s what they do. I’m not going to attack them. So yeah, so definitely a lot of problems with the system as in general, could it be something like, you know, like, when

 

Noel Whittaker 

with Medicare, we have a levy where we we pay in, you know, because it’s such an expensive system? Is that where we’re hitting? Well, one of the members of the Aged Care Royal Commission recommended a massive aged care hike, he recommended if you’re over 14, and you’re in the top tax bracket, you should pay an extra 8% so a Why should someone 39 pay less tax than someone 41? And what would happen to the economy if everyone took $150 a week pay cut, so it’s just not gonna work? The other Commissioner recommended a 1% levy. Now, Josh frydenberg said no to the productivity, we won’t have any levies. It’s election year, we’ll just be more productive. You know, every year they promised to cut red tape.

 

Fraser Jack 

So the idea of a levy obviously is coming. It’s gone. It’s been told it’s not going to come in and those are things but at the end of the day that the financials just don’t work, do they?

 

Noel Whittaker 

Well, the Medicare levy now is not spent on health anyway. It’s the same as the petrol excise tax, the petrol excise tax is not spent on right The Medicare levy is not spent specifically on health. Now I will remember the budget repair levy of 2%. That was after the budget got in the trouble with the GFC. I guess that’s an option. But if you look at the number of taxpayers is a very few number of taxpayers in the top bracket, the numbers run something like I think about 15% of taxpayers pay 60% of the income tax. And they can squeeze in much more.

 

Fraser Jack 

Is this is this solvable? I guess, in many years from now, when the superannuation guarantee has had a chance to be there for someone’s entire working life?

 

Noel Whittaker 

I guess that might help. But I think they’ll still need some way to stop someone retiring and blowing the lot. I mean, that’s always been the fear, they retire and play the super guy and go on the age pension. Just yesterday, an Uber driver was telling me I’m working the boat next door is a lazy bagger, you know, and he’s got a full age pension, he saved nothing. So this is this is another issue we face? Yep. Because if you look at it, a person could have nothing a couple now could have nothing at all, and get a better 35,000 indexed income. Of course, every 100,000 extra bike save he loses $8,000 a year in pension. Yep. So that’s a that’s a public perception thing.

 

Fraser Jack 

Yep. It’s talk to me about the mindset around the pension. Because that’s certainly always been something that people hold on to or don’t want to lose, or they want to move into brackets. And they’re almost upset, even though they’ve got some money to live on that awesome savings to live on, that they’re not getting the pension?

 

Noel Whittaker 

Well, I think there’s two kinds of people. One says, I did not expect the government to take care of me, I don’t want to be in there. I don’t want to be beholding to them. The other half will say, I’ll pay taxes all my life, now I’m getting a pension. There’s a third older group have the wrong belief that there was a pension fund in the 50s and 60s, to guarantee them and income. And that’s just not true. Very difficult.

 

Fraser Jack 

I want to talk around the mindset in a lot of cases, because a lot of the conversations tend to tend to move back towards the mindset or what’s going through someone’s mind at the time. There’s a big shift, and a transitional period from you know, working to, to not working and getting used to that concept of, you know, being working full time, or it might be and a lot of that mindset, you know that the time it takes to transition all depends on what’s going through someone’s mind or how they see things or how they believe in things. What are your thoughts on the transition period? Look,

 

Noel Whittaker 

all the research shows that the better you prepare for retirement, the better it is, the person worst offer suddenly said you’re finished tomorrow, nor that and they get $400,000. Nobody ever has a bank account. They’re the ones who die young, I think, you know, you need to transition to retirement, you need to plan for retirement. To me, you must have a sense of purpose. A sense of purpose is massively healthy. And in the last 50 pages of my book, I talked about all the things to live a long, healthy, happy retirement. And that gets back to back to social network. exercise and diet. Most things are controllable. exercise and diet are controllable. A lot of people don’t think about it.

 

Fraser Jack 

Yeah, certainly. Right. And like when when planners doing plans, often they don’t include those types of ideas in their plan. But of course, it makes a big difference to things like longevity and and purpose and how happy people are in retirement. Yes. I

 

Noel Whittaker 

mean, I think it’s great to give retirees a longevity test. there’s a there’s a couple of tests. You can you can do. But some planners Tell me retirees don’t want to know that. Why I think it’s important. It’s particularly important. I mean, if one person has a much shorter life expectancy, I heard about the case the guy’s smokes, he’s overweight. He’s quick tempered, the wife’s placid. But she’s got a family family history of arthritis. So he may be dead at 70s. And she may get an ID. So who will take her her who will take care of her those last 20 years? So I think life expectancy tests are critical. It gives you some idea what you’re planning for. Most people underestimate how long they live. Most people live with Matt, but most people retire with far more than they thought they would. That’s the point.

 

Fraser Jack 

Yep. So how would you have a conversation with a client that says to you look odd, I want to know, what would you say to them?

 

Noel Whittaker 

Well, I haven’t made a financial product for many, many years. And we we sold the business 14 years ago. But I mean, I think you’ve got to face these things. I think you’ve got to say to the client, right? I will, you need to work it out because as you get older, you can’t bring as About your travels much. So your expenditure tends to be higher in early retirement, and then drop down and later retirement. Say, say you need to plan that. So the more aware people are I think the better, the better choices they can make.

 

Fraser Jack 

Yep. You mentioned expenditure. There’s been a lot of conversation over years around that, what that expenditure looks like. And you just mentioned it starts out higher and reduces down. Some people tell me it started out higher and reduces down, but the medical expenses come up, so it stays the same. What does that actually like? How How should planners be forecasting expenses into, you know, into a, into a financial plan for retirement living expenses on retirement spending expenses?

 

Noel Whittaker 

Well, the big question is, how much do you need when you retire? And you’ve got Astra published figures, which I think are reasonable. Other people that other people say that’s nonsense, they’re only scaring people. Because really, everyone’s different. I mean, do you drink audencia, the travel first class or coach, you know, the visit, visit your kids overseas or dance, you got one car or two cars. So that’s why I think it’s critically important you do a budget as you’re approaching retirement, and try to get a an idea of what that will be like archery time, and adjusted. In my book, or on my website, there’s a lump sum calculator, which can tell you how much you’ll need. But that requires assumptions. And a big assumption is the right you’re gonna. And I say to people all the time, because people say what do I use? I said, Well, look, you do this every year, this retirement drawdown calculator, the lump sum needed calculator is an estimation of what you would need using today’s figures. But in a year’s time, we might have inflation, we might have a higher interest rates, we might not, your health might change. So people need to do these projections. But they need to do them at least every year. And it’s really simple to do it.

 

Fraser Jack 

Yeah. So that ongoing, again, that ongoing planning scenario, where you are looking at your budget, and you’re looking at the assumptions and looking at, you know, where you might be in, but the overall spending, even if whatever the number is, you mentioned sort of comes down, as you get older, is it still that’s still the case, where you

 

Noel Whittaker 

just can’t travel as much. And rig as much and yeah, we’re all the suits and ties you need. And yeah, yes, he just don’t need it. That’s the whole point. You got kids, they put their hands out. That’s an issue. Look, every one is different. You can’t put anyone in a box with this one. Everyone must work out their own retirement.

 

Fraser Jack 

Yep. Fair enough. And it’s, obviously it’s a difficult one for people to try and work out because they can probably work it out, as you mentioned, this year’s budget. Yeah. But you know, none of us have been in the future. We can’t quite work out after the next few years, what it’s gonna look like, Is there any modeling or anything that you you like the look off when it comes to,

 

Noel Whittaker 

if you look at the aspect, they they break it all up, when you’ve got rates and insurance and found bill, you know, fares if you’re in a golf club, you’ve got sport, you know, if he just did and there’s no excuse for sitting down saying, Well, how much do we spend on food every every week? what’s reasonable? How much on booze? How much to travel? And just got to sit down and do the numbers? It’s not difficult at all. There’s s for numbers. There’s s for numbers, I set them all out.

 

Fraser Jack 

Yeah, I know that a lot of conversation around when when we talk to planners or around the concept of budgeting and cash flow as a service that they offer. Everybody jumps to, you know, younger lives, young individual saving for a family, etc, etc. But yeah, it’s it’s critical for this at this retirement planning as well.

 

Noel Whittaker 

With me, the most important thing is come to retirement debt free. The last thing you want is a mortgage on retirement with no income or on the pension. But worse, there was no home. So people really need from a young age to have a goal to have a paid off house on their retirement day.

 

Fraser Jack 

Yep. Now I’ve seen some stats recently on the concept of happiness around having a home versus not having a home when you’re entering retirement.

 

Noel Whittaker 

You know, I’ve heard the arguments is cheaper to rent, but most people don’t invest what they say by renting. And also I mean, if you’ve got a ham, you’ve got free rent for life. Plus, if things get bad, you’ve got capital you can run either by way of an equity release or a reverse mortgage or something. A house gives you free rent, and a backstop. I can think of nothing more important than the house.

 

Fraser Jack 

Okay, fantastic. I know. I wanted to talk about the concept of technologies obviously growing. There is a lot more new things coming out. As you mentioned, you’ve got you’ve got a calculator yourself. How’s how’s it technology and the changing landscape around technology affecting retirees? Well, I

 

Noel Whittaker 

guess most retirees I know have kids overseas, which means they can have regular meetings by zoom or FaceTime. Most retirees have email and stuff. I mean, I think most most retirees are the same as the Yankees. And I think it’s important for it for retirees to be up to date. One of the worst things is, is this a self taught dance that saying, I’m too old for that? Once you once you start saying, I’m too old for that you’re on a downward path. Yep. Good self talk.

 

Fraser Jack 

Yeah. So so I think mental that self talk, and that mental health of that, you know, that awareness around, you know, how you’re feeling and what you’re doing and how to how to solve it is sort of a lead for both finance, financial matters, as well as as well as you know, physical health matters.

 

Noel Whittaker 

Oh, yeah. You need to monitor an annual checkup, habit, annual health checkup, an annual financial health checkup, you know,

 

Fraser Jack 

So, finally, financial planners out there helping people with their plans, obviously, they’re just focusing on their financial side, how can they get more involved in the you know, making sure people are happy or making sure people have a positive in ways and in their mental health? Rather, you know, obviously, they’re not, you know, they’re not qualified. But, you know, in that in that gentle, positive way?

 

Noel Whittaker 

Well, when markets crash, as they always have an always will, the customers want someone they can ring up and talk to. And that’s when the fans get mad. And that stops people cashing it all out on March 23, when the markets all crashed and bounce back again, you know, they give comfort to the clients. I think the clients need to know there’s someone there for them. And based

 

Fraser Jack 

on the content that you probably can over communicate with, with clients.

 

Noel Whittaker 

I think. I mean, you don’t want to give them too much information. I think I think a quarterly newsletters, yep. I think an annual client briefing with some good speakers. And a quarterly newsletter is about right, you sort of the daughter over push them, because people really need to not think about it the whole time. People need to have a happy retirement, and not check their superannuation every year. You know, enjoy life and travel and photography and sport, whatever they want to do. Yep, they don’t need to be on the phone with the planner.

 

Fraser Jack 

yet. Now you mentioned planning and obviously, you know, the use, I think the word you use, the better you prepare, the better, you know, your life’s gonna be in retirement. Yeah. When it comes to sort of planning I mean, your your your book is retirement Made Simple. And it’s around the concept of you know, if you really, within the 30 years of planning for retirement, so talk to me about their time leading up to retirement and how and how that is, you know, like, obviously, it’s now or yesterday was the best time to start. And if not, then now, we’ve been how that that tightened as you get closer to retirement.

 

Noel Whittaker 

Well, I the earliest, the early get used to the behavior of shares, because I think there’s no investment as well as shares. As we know with compounding every time your money doubles, there’s more growth in the last double than the sum of the previous doubles. You know, I was playing golf with the guy last week, he got half a million in Super now. So half a million now, he has 1,000,016 years, 2,000,024 years, 4,000,032 years, 8 million compound. So they need to get laid that need to understand the importance of starting early, if possible. And the importance of getting the best return possible. You know, that’s where you start.

 

Fraser Jack 

And I guess the closer you move, the more the less choices you have. When you make choices, as in the choices of you know, the big because you’ve the choices all provides you with the funding will provide you with choices and retirement choices in how you live

 

Noel Whittaker 

the way you live communities finding more choices. Yep, yes. The things I private health insurance, mean, the two things people need are a home and private health insurance. And when they should also make sure that they’ve got three or four years planned expenses in cash without a doubt. Otherwise, they’re forced to dump assets when the markets having one of its normal downturns. Because what people fail to understand i think is if the term is short, the writer matter very much. I mean, if you’ve got a two or three year term 1% or 8% makes no difference effectively. It’s the long term where the money is you won’t be too badly off copying a point 5% the body money for a couple of years. Yep. Very good. Thank

 

Fraser Jack 

you. And, and just the compounding, again, the

 

Noel Whittaker 

compounding question that you know, that sort of comes up again and again and again, is it’s one thing that you find repeat, you’re repeating yourself over and over and over again on over and over and over. And I’ve got a I’ve got a challenge now and I’ve got three kids are doing well. Do I give them money now? Or give them much more a few years time? That’s the big question and I Done. I had a solid, but frankly, maybe some now some lighter? Because I’d rather give kids money now than for them to wait till I die. Yeah, yeah, I can see them enjoy it, and I can help them get used to it. Yeah,

 

Fraser Jack 

very good and you can help them help them with some of the decisions around.

 

Noel Whittaker 

And and and some kids you give nothing, they’re gonna waste it give them nothing if they’re in a rocky relationship and give nothing.

 

Fraser Jack 

Yeah, yeah, exactly. So talk to me about the, you know, a lot of the conversations that we just want to mention that they you can’t take it with you talk about that those sorts of conversations, you know, how, how are you going to distribute and what you can do with it. And maybe like, as you mentioned, passing some early

 

Noel Whittaker 

will as you get out, most places coming from, from helping other people may know, I’ve had the new cards, and then you close, you know, that’s a very passive pleasure. But if you can change your life with a gift, that’s magic. So I think people should think about philanthropic activities as well, you know, I think that’s important. And as tax deductible doesn’t help the pension.

 

Fraser Jack 

I really like I really like their content pledges come in, they come from others. And this brings us back to the community that you’re in, and how important the community that you’re in and you and your friends and the people that you’re with all the time make a big difference in your life,

 

Noel Whittaker 

you see that the world’s happiest people are the wealthiest, the world’s happiest people can be very poor, but but but they have a community and a support network. Now I know that having a solid money, so with the water problems, I get no doubt about that. Right. You know, but you need a balance. I think

 

Fraser Jack 

there’s so many things that that we could be putting into plans, right financial plans, and I guess retirement plans involve all of these things, and, and then the financial side of it is quite a small side of it, or it’s the afterthought or it’s the end of it, isn’t it?

 

Noel Whittaker 

It is. And I think estate planning is important. And a lot of people don’t know about the tax on superannuation, if you die. You know, most people never heard of the death tax, that can be very simply sold by withdrawing your money at a separate tax rate, just when you’re about to die. Or having your attorney do it for you. That’s easily so most people never heard of it.

 

Fraser Jack 

As long as as long as you know that it’s coming.

 

Noel Whittaker 

Yeah, yeah, sure.

 

Fraser Jack 

So what are some of the biggest challenges for people that are moving through the retirement space? Obviously, we

 

Noel Whittaker 

talked about the numbers but to me, I sort of feels like from a conversation. There’s a lot of it’s a lot of it’s mental and a lot of it’s obviously there’s health. But a lot of it’s it’s sort of the way that people are thinking of stuff. I think the biggest problems are media, and the media give us bad news non stop. In every year, I read less papers and what and watch less television because it’s all the same. It’s always a crash and a disaster. And someone’s got sick and there’s a celebrity’s got divorced, and, you know, it gives us a wrong view of the world. I mean, most people would be better off to lock themselves up for you and leave their money be and come back. But I mean, obviously the market crashes, as it will always, you got to go and see how you win. And that’s just human nature. I do it myself. I can’t help myself. Yes. Good.

 

Fraser Jack 

Yeah, the media machine is is a very interesting beast. And isn’t it? You know, like the fear. Fear sells newspapers fear sells a lot of stuff. And so they, you know, they, they create articles, they create fear, and it creates advertising dollars. And

 

Noel Whittaker 

remember, k would cover there’s going to be a good economy, a recession, and the houses would drop to 80%. Remember that last year, your household dropped 20% there’s going to be a recession.

 

Fraser Jack 

So it’s almost like the people have decided to write their own history not listen to the the the atomists.

 

Noel Whittaker 

And people get hot, Chris. I mean, I read an article recently. I’m totally opposed to using supers I asked. I think it would just drive up the price of housing. Plus, they lose 23% in exit tax if they withdraws if they’re under 60. I got a tech while you’re being paid by the bar, the big fund managers and it’s nonsense and why you stop again, people are getting home.

 

Fraser Jack 

It’s interesting this again, and yes, the media is a big problem, of course. And and I guess you’re part of the conversation when it comes to the meat, not the media, but you know, producing content for publications as well. It’s sort of one of those things that it’s you know, it’s a hard line to walk I guess

 

Noel Whittaker 

where you need to watch the line. Like it’s okay for him. You know, he doesn’t know me, but he just keep putting it out. Putting it out putting it out. Yep. And people still accepting phone calls from people. Yep. I say to people, if someone rings you hang up. That’s it. No argument. Yeah,

 

Fraser Jack 

I say that. On the media side of it. And I’ve had these conversations before about how much time the retirees are spending with the TV on in the during the day. Yeah, and absorb This content mindblowing? Do you know if only stats or well that might be but I feel like it’s like, you know most of the day?

 

Noel Whittaker 

Well, they’re probably bored I guess it’s like people go and play the pokies all day. Yeah, that’s why you need a sense of purpose you need things to do you need a social network that might be playing golf, it might be photography, it might be a travel group. Women do it better than men. Basically, some reason women are much more I think women are much more social animals.

 

Fraser Jack 

Yeah, yeah. And this comes back down to he miss joining a group or a club or or a group activity can be a way of really getting involved in finding that purpose. If you don’t really have it at the moment.

 

Noel Whittaker 

If you get if you can find that earning part time job, then you don’t you’re so much on your Suber, with that role so much on your supers. it’ll, it’ll last longer.

 

Fraser Jack 

He mentioned sort of in the book, some some parts there. Obviously the stats show there’s a very big difference between men and women when it comes to you know, their retirement that starting with their retirement balance, I guess, and how they go through. Also, I’ve spoken to planners who, you know, USCIS who say that there is a, you know, it’s a very high demographic for homeless, single females and in this space.

 

Noel Whittaker 

What have you seen, the people were stopped, are a homeless person at retirement age, and they tend to be women. Normally, because of bad relationships. I went to an all day seminar women and Sabir put on by the foot by the female economist of British University. And the major conclusion is women are less engaged than men in money. No, I think money nonstop. My wife would rather go to book club. women or women out there in Red Bull, most women are Listen, guys, the main from that whole day seminar, the one thing we all agreed upon was that women under 50, they should be in high growth in Seba as an opt out, not opt in, say, with high growth unless you opt out. And that would make a big difference.

 

Fraser Jack 

Yeah, this sort of comes back down to individuals making decisions on their investment choices. And obviously, with we’ve been through a turbulent year, last year, and you know, the amount of people you talked to that, that panicked and went to the wrong time, and then through fear, and then all of a sudden that missed the the rebound. And so how do you feel about this, this concept of, you know, making putting parameters in place where people kind of get that OPT opt out scenario where you should be here, because of your demographic, we’re going to put you here, and then if you really got a problem, and I

 

Noel Whittaker 

think, I think the average person just needs to be in a good super fund, and let the fund worry about it. And then the fund may well have a mix at cichy. I mean, balanced balances performing not much worse than high growth. I think high growth for 10 years has been nine point something and balance has been eight point something capital stables about five you don’t want to be down there,

 

Fraser Jack 

that kind of because we have this weird perception of what high growth in balance mean, should should we have a standard definition?

 

Noel Whittaker 

Will they think it’s risky? You know? Now, I can’t be in this risky stuff. I think that’s the problem. Yeah, that understand risk? Yes, every investment decision has good and bad points. Yeah, every decision you make has a good point. The bad point. Yep. If you say right, I’ll stay in cash, then you won’t suffer in a market crash, but no fraying dividends and no chance of growth. And your money won’t last as long.

 

Fraser Jack 

So if we change the language from risk to pros and cons, then

 

Noel Whittaker 

I think so. Yeah. Yeah.

 

Fraser Jack 

It’s an interesting one, isn’t it? How do we how can we change some of that language around? Well, we

 

Noel Whittaker 

talked about those three heads I talked about There’s your own savings, which is the super and the age pension and the lifetime pension. So either well, money in in accumulation late money in the account based pension is at call. So if you want 50 grands got it, but the balance is volatile. The age pension should keep going as it does indexed. And your lifetime pension is there for life. So I’ve been particularly touching, having put your money in the lifetime pension can’t take it out again. So there’s three pillars now all different. Yep. Fantastic. In the age pension, you’re you’re dependent on government wins in the lifetime pension, you can take it out and with an account based pension, you can take it out but what about our balance?

 

Fraser Jack 

How important is it to think about when you’re approaching retirement not thinking about the the total amount of money you have, but be thinking about that income per annum and what you what you know, those sorts of things rather than the total amount,

 

Noel Whittaker 

but I think you’ve got to be prepared to spend capital. You can put a million dollars in the bank and live off the First, say you’ve got to be prepared to spend capital. And the 1.6 million transfer balance cap as I understand that was worked out on double the age pension cut off for a couple then and four times the single pension then was 88 grand a year $1.6 million will last for 25 years at inflation plus 4%, I think. And that’s how they got it. So if you had $1.6 million in Sabre, he should get it. I agree your index for the next 25 years. Be 65 to 90. So that was the thinking behind. Yep, that assumes a total run out of capital. Yep.

 

Fraser Jack 

And this is a mind bending capital. This is another mindset piece, right? Spending capital, I’ve saved this money, it’s now savings. And now all sudden, it becomes

 

Noel Whittaker 

like that, like it going down. And we may need it if we got to go to a nursing home. Or one of the kids might have an emergency. So people have a savings mindset.

 

Fraser Jack 

Yep. So yeah, what do you what do you say to your maid at the golf course? Who has a savings mindset? And, and you’re, you’re sort of convincing them that they need to change their mind.

 

Noel Whittaker 

I just say you can’t take it with you. Yeah. As I say to people, if you don’t fly first class, your kids will, like at all. I was playing with a wealthy guy one day, well, wealthy guy, please kept using old golf balls. I said, lady, your die with 30 new golf balls in your golf bag. Starts that using an easy a new golf ball. Come on, ever go and use it.

 

Fraser Jack 

You might have just dropped him in there.

 

Noel Whittaker 

Now he’s died a long time ago. Nice. I’ve

 

Fraser Jack 

never used any golf balls. Yeah, it’s fantastic. So I just want to go a little bit more into this, this idea around happiness in in retirement. And you mentioned sort of that, that doesn’t always you know, the demographic is not always financial, obviously, it is a bit financial. But what have you found in your research around this happiness index and around, you know, zones and those sorts of things around where people and why people are the happiest,

 

Noel Whittaker 

or the best happiness is intrinsic, not extra extrinsic. As I said, the new car might be nice for a month, and then it’s a new car, it’s an old car, and away you go. The Real pleasure is family and friends and giving money away and contributing. And having a sense of purpose. And having a sense of purpose is very good for your health. And that’s where true happiness comes from, you know, having things to do helping somebody else. I mean, I enjoy what I do, because I’m there like an ombudsman, almost, I get so many problems. I help people solve their problems. And I love it. Yep.

 

Fraser Jack 

Do you do that on an individual basis where people just approach you or

 

Noel Whittaker 

if I think it’s a good story, like I wrote a couple of the moment they were taught in they went to a wealth creation night. They were convinced to open a self managed funds. Live in Brisbane, put their $140,000 of super into this self managed fund, then buy an apartment in Perth for 480 grand is now with above 300 so they have dropped they’ve lost their super. They’ve lost 180 grand. They just haven’t wiped out their super. They’ve lost $190,000 it was a loan through a self managed fund with personal guarantees. Fine I can do to help them.

 

Fraser Jack 

Yeah, probably non financial plan that was it. Oh,

 

Noel Whittaker 

well now he was a mortgage right? He’s He’s never a life ban. They weren’t held by his best mate who was insurance company broke, who sold them unnecessary and expensive life insurance that they didn’t need. That was eight grand a year. They’ve now got next against that company. They’re the sort of things I get involved in.

 

Fraser Jack 

So you find these stories. And again, I now paid as much as you can.

 

Noel Whittaker 

Yeah, I’ve got a couple at the moment they got mixed up with the Bendigo Bank home safe deal in Victoria. 14 years ago, they sell Bendigo Bank, a 55% share their house for 102,000 The house was worth under just under 400,000. Now the 55 percents the most Bendigo get as time passes, but it’s about 44% at the moment, the house is now worth $800,000 he’s died the willows 86 is now $328,000 out of Bendigo Bank on this hamster product.

 

Fraser Jack 

There’s a lot of products out there out there that these reverse mortgages and then you mentioned that the word home safe doesn’t sound very safe. But yeah, there’s a lot of products out there that are being produced for in that space for either tip reverse mortgages or other products in the in the case of you know, gearing yourself into sort of fun and all these types of things. Now what do we fix that? How do we make that such a big part of the problem not there’s been a lot of things pointed it out. planners and obviously there’s there’s been some people that have done the wrong thing. And and that’s, that’s fair enough. But where do we start make sure the products are safer?

 

Noel Whittaker 

Well, there’s doctors or lawyers have done the wrong thing to this point. And these are planners, their properties brewers in working in an unregulated space. Yep. But the real problem is equity release. Now the retirement income review wants people to spend the equity in their house. So one, so, a ways to sell it. If you bought a million dollar house, and you’re on the full pension, and you move to a half million dollar house, you’ve just released half a million dollars, which will affect your pension. So a plus spent about 100,000 movie costs, that’s got a cost. But maybe it’s the only choice you’ve got, if you move to a retirement village or a land lease community, you cannot reverse mortgage your property can’t do it. And then you got the pension loan scheme at 4.5. The pension landscape is great because it’s government run. And they keep an eye on Hey doing, but it’s paid fortnightly. So you’ve never got a big lump sum to start the compound. But it’s no good. If you want training 20 grand in a hurry. It’s more for your expenses that day, because it comes in every fortnight, then you’ve got people like household capital. And that’s that’s your reverse mortgage at 4.95% at the moment, but reverse mortgage means there’s no payments of principal or interest. So 5%, your deal that’ll double in 14 years. Now. That’s why they it’s only should be taken out as the last resort. You know, so I think the family should be involved because what’s happening is reverse mortgage means that you’re spending money you would normally behind you, maybe if you made 50 grand the the family could borrow 50 grand, or at least pay the interest on reverse mortgage. So many if you need 50 grand and you and you get a reverse mortgage, and the family pay the interest. There’s no problem. Okay. And and.

 

Fraser Jack 

And so one of the solutions, obviously, is this downsizing slash? Right sizing conversation, which I believe you sort of got a joint book on as well.

 

Noel Whittaker 

I know you

 

Fraser Jack 

Yes. I talked to me about that. How is that sort of the preferred option before sort of a or even as part of a moving to a retirement or LendLease?

 

Noel Whittaker 

Well, I think the big thing is a that you reach a stage you’re in your IDs, the house cost a lot of maintenance or not yet, then you reach the stage where maintenance get so bad, you can’t afford to spend the maintenance you’re stuck in and then normally the bike dies and the widows there on our own and sort of lonely bit of life. Rachel and I both think they’re better off to make a move to a retirement village or landless community earlier with as a social network, therefore them you know, and people’s lives are transformed. I can see I can certainly say that, I can certainly say that, especially with the big emphasis on the community within that within that space and, and the social side of it. Now, we’ve

 

Fraser Jack 

talked a lot about the you know, the negatives, I guess, of the space but told us that some of the positive what are some of the great things you see,

 

Noel Whittaker 

well, most people are better and happier than the media thinks most people have quite well. In my book, I attack ageism, like, man can’t cope. I’m too old for that. It makes me feel stupid. I won’t do that. I’m old. They’re just dangerous to your health. Most age people cope really well. And people want to age at home and most people do ages.

 

Fraser Jack 

Yep. So you refer to it or aging. Not old.

 

Noel Whittaker 

We’re getting older. That’s a fact of life. I’m 81. But I’m still going strong. Do I love it? You know, carry on. I’m the same age as Carrie Stokes and john had and Jerry Harvey and Warren Buffett’s 90. Yeah. So it’s really great. If you’ve got something you can keep on doing.

 

Fraser Jack 

Yeah, passion and purpose. Love it.

 

Noel Whittaker 

I want to be a lonely grumpy old plus.

 

Fraser Jack 

Why is that? Why do we Why do people as they age they get their reputation of being grumpy. Where

 

Noel Whittaker 

does that come from? People like that. I think they were public grumpy when they were young. You know? If you’re grumpy, I think I think you’ve always been grumpy.

 

Fraser Jack 

Very good. Now, talks about the book you’ve finished writing it released a new the new book called retirement Made Simple. I hear it’s flying off the shelf.

 

Noel Whittaker 

Yes. First print round 15 second 5/3 five. So 20 to 25,000 copies of the song.

 

Fraser Jack 

This to me appears to be like a good book for planets Who? Again, anything from 30 years out. Just understanding really

 

Noel Whittaker 

absolutely a lot of financial planners are now giving it to their clients as a gift. When a lot of planners don’t understand if you if you give a gift, you stop the power of reciprocation. If you give a client a gift, that’s a great way of getting them

 

Fraser Jack 

Yep, fantastic. It’s also a great service throughout the year. Annual service agreement. As a planner,

 

Noel Whittaker 

your job is to educate more educated your client. They’re happier clients.

 

Fraser Jack 

Yeah, fantastic. So

 

Noel Whittaker 

they haven’t even they get surprises. And what they don’t know.

 

Fraser Jack 

I’ve also I’ve also started to the philosophy of when you’re giving a gift, don’t give a branded gift. Don’t give a gift with your brand on it.

 

Noel Whittaker 

I agree. Totally. title.

 

Fraser Jack 

I think somebody once said to me, if you give me golf balls with your logo on them, I’ll hit them and they’re like, hit them in the lake and I won’t bother. But if you give me the same golf ball with no logo, I don’t i’ll i’ll take better care of it. Oh, no,

 

Noel Whittaker 

no, I like a logo golf puts a free one. I’ll call it every day of the way he was gonna logo.

 

Fraser Jack 

You’re okay with the logo? Since it’s a very colorful, Woodley. Fantastic. No, thank you so much for coming and chatting to us today. Really appreciate you. giving us your time. And going through that if people want to come continue the conversation with you, what’s the best way that they can? You know, just

 

Noel Whittaker 

go to the website, that’s easy. Now williger.com that au antastic. And they can find the book there. If you Google me, you’ll find me. I can tell you.

 

Fraser Jack 

Although I’m still waiting on your LinkedIn request, but I’m taking you down to spend a lot of time on that

 

Noel Whittaker 

spend less time on LinkedIn. I should. One of those things I should get around to doing? Yeah, yes. It’s, I’ve got 190 emails in my inbox, and some of them are complex. And, you know,

 

Fraser Jack 

it sounds like you much you’re you’re much more engaged helping people sort out their financial situations and your real purpose. Yeah. Love it. And testing. Right. Wonderful. Thank you know, really appreciate it. We’ll see you around the traps.

 

Noel Whittaker 

Thank you.

 

Fraser Jack 

Well, there you have it. Another episode of The X Y advisor podcast. I’m Fraser Jack, and I’m joined by Emily. Blanche. Good, Emily. Hey, Fraser. How are you going? I am tremendous. Tremendous. Isn’t it a great day. Now let’s do some shout outs. It’s time for that really cool part of the week we get to shout out to some cool experimenters.

 

 

Let’s do it. So today, a big shout out to x y advisor and legend alyssia lead. She got a shout out in the newsletter actually for being a top member. So she’s one of our most active members at the moment. She is in the platform, adding value answering questions and she was recently on an ex wife podcast herself. She’s an open book as in she’s always super willing to share and share her experiences and value and just, you know really embodying what it means to be an x y member. So thank you, Alicia. Your generosity does not go unnoticed. We appreciate it. Thank you very much.

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