Question 1

Hi Craig, I am currently semi-retired at 71 and working three days a fortnight in a role that returns basic wage but keeps me out of the house for a while. My super is invested in a growth scheme with some restrictions on ethical investing. When Covid hit, it hit my super balance as well by 15+ per cent. It has still not recovered to where it was in November ’21. I don’t have an ‘adviser’ anymore as I was being charged about $3000 for an annual review where I simply advised that my circumstances had not changed in any substantial way and they said they would see me next year. I am considering moving my meagre balance ($250K) to an industry fund, but do not know how to do this. I am aware that you probably can’t recommend a specific fund and I will have to do some personal investigation, but is this a difficult process, and how do I advise the new fund of the kind of restrictions I desire on my investment? Regards, Malcolm

Hi Malcolm,

It does sound like your current funds has not been performing well.

From what you have said you have two major priorities when looking for a new fund: Decent returns and an ethical overlay.

Firstly, to investment performance. I suggest looking for a fund with strong long-term (five to 10 years) net (after fees) performance.

SuperRatings and ChantWest are two research companies you can use to help you with this. ChantWest recently released a list of the top 10 performing growth funds over the past 10 years:

Top 10 Performing Growth Funds (10 Years to June 2024 – % pa). Source: Chant West

The ATO also has a handy super comparison tool.

If you have the ATO linked to your MyGov login, you can use a personalised version of it there. If not, a generic version is available here.

The second criterion around ethical investing is a little more difficult. Obviously, each of us has a slightly different view of what we mean when we say ethical or sustainable.

The two main ways in which you can choose a super fund that follows your ethical principles are:

• Choose an ethical/sustainable super fund specific investment option that is explicitly labelled ethical, sustainable, responsible or socially aware; or
• Choose a superannuation fund that, while it might not offer a specific investment option, the super fund as a whole follows ethical investment principles that you are comfortable with. Super funds disclose information about their ethical approach to investing on their website. Here is an example from AustralianSuper.

When you are ready to switch, your preferred fund can assist, or you can make the switch very simply via MyGov if you have linked your ATO.

Question 2

I’m 68 and have recently retired and am applying for the aged pension. I am single and have my own house. In a few months I will be returning to part-time work.  How much would I be able to earn before the pension is impacted? Thank you kindly.

For a single person under the income test, the income-free area is $212 per fortnight.

In addition to this, there is something called a “Work Bonus”, which encourages older Australians to stay in the workforce.

Under the Work Bonus, the first $300 of employment income (and self-employment income) is excluded from the pension income test each fortnight.

Therefore, if you go back to work the first $512 per fortnight will not impact your age pension payments.

For every $1 over this amount, you lose $0.50 in fortnightly age pension.

The current full rate of age pension for a single pensioner has just been increased (as at September 20) to $1144.40 per fortnight.

Question 3

I am 65, own my home and have nearly $100,000 in my super. I have no idea what I should do with it.

I probably need a little more information.

Are you still working? If not, you need to fund your expenses until age pension age (67).

Otherwise, it’s up to you.

You can start a pension with it regardless in order to receive regular income payments.

Or you can spend it on whatever you like.

Remember though, you only get to spend it once.

Craig Sankey is a licensed financial adviser and head of Technical Services and Advice Enablement at Industry Fund Services.

Disclaimer: The responses provided are general in nature, and while they are prompted by the questions asked, they have been prepared without taking into consideration all your objectives, financial situation or needs.

Before relying on any of the information, please ensure that you consider the appropriateness of the information for your objectives, financial situation or needs. To the extent that it is permitted by law, no responsibility for errors or omissions is accepted by IFS and its representatives.

– TND