Ditching maths for a bigger equation: superannuation

From being expelled from maths class to (half) understanding superannuation ... it's been a long journey for this writer, who doesn't want to 'retire' but draws down 10% of his super so he can continue working.

By Mark Dapin

When I was 16 years old, my maths teacher announced that anyone who had scored less than 10% in the trial maths exam might as well get up, leave the class and never come back.

It was supposed to be a warning that we should try harder, but I have always been a bit of a literalist, so I took her on her word and walked out forever.

I can add, subtract and multiply, but the high-school curriculum lost me at long division. I am probably not the best person to ask about pensions and superannuation – and, in fact, nobody ever does.

Until recently, I took no interest in my super, as I never thought I would live to spend it. This is partly because I did not do the maths on rising life expectancy (or anything else). 

My dad died young and for me, thinking about super was like thinking about dying, so I did not.

I have always been wary of taking out insurance policies, because buying insurance seems like having a bet against yourself: the premium you pay is directly related to your assessment of the likelihood of your house falling down.

If I had paid for expensive home insurance for 30 years, I’d start to become a bit disappointed to come back every day and find my terrace still standing.

Where’s the value in that?

I had an idea that superannuation was a kind of insurance, and I was quite irritated when I began to have to pay contributions in 1992 – especially since I realised that the employer’s contribution was given in lieu of a pay rise and therefore super seemed to represent a pay cut.   

Another reason I was not interested in super is that I thought my balance would disappear when I died. This is probably because I didn’t have children in those days, and couldn’t imagine leaving anything behind.

Now I realise that, even if I die young, I can bequeath a working lifetime of super contributions to my kids. I know they will spend it on Uber Eats, computer games and Korean skincare products, so I feel a bit more invested in the idea.

But then there are the associations between super and retirement.

One of my best mates has retired and he is absolutely stoked with his Seniors Card, as it allows him to travel on public transport all day for a nominal fee.

So he does.

He goes out and rides trains all over the city.

But if I’d wanted to do that, I would’ve become a train driver.

No plans to ‘retire’ 

I do not have any plans to retire. I’m self-employed and I enjoy working.

When I think about retirement, I imagine bowls clubs and proctologists’ appointments – and I’m not sure which one would be worse.

My grandad concreted over his front and back yards when he retired, so that he wouldn’t have to do any gardening, then went out for a drink for 10 years.  While I can see the attraction, it’s not something I really anticipate.

The truth is, I would have been far more interested in super if I’d have understood it properly.

But I am a words guy (we call ourselves writers, in the trade) and even the words connected with super look like numbers to me – “deeming”, for example, is just a cluster of 3s and 1s.

The specific point I wish I had grasped is that I could begin to draw on my super, tax-free, while I was still working. 

The realisation that this was possible transformed the idea of super for me into money that could make my life easier while I was still able to enjoy it.

This year, at 60, I have taken out the maximum 10% allowed by law, and I am using it to cushion my working life so that I only take jobs that I want to do. And that, of course, is why I am writing about super right now, and have not quite yet made a start on the great Australian novel (that’s next week’s project).

I have noticed that once I mention that I have begun to draw on my super, people either (a) walk away briskly, pretending to be late for their osteopractor’s soylates class; or (b) advise me that I should take the money and reinvest it in… super.

This is apparently because when you transfer your funds back to super, you avoid paying even more tax than you did not pay when you withdrew the money in the first place.

But surely if you put the money away again, then you have not got it anymore and you cannot spend it – and therefore it doesn’t matter whether or not you pay tax on it.

It does not add up to me. But then, not much ever does.

I blame my maths teacher.  

I only recently (this weekend, to be honest) found out that I might one day be entitled to an Age Pension. 

I’d assumed the pension was a payment for the destitute and abandoned, or those who had somehow avoided paying super – perhaps because they had spent most of their lives in jail.  

But now I realise that some people use all their savings (including, if they can, their super) to pay off their home, then declare themselves broke and apply for the pension that they would’ve been entitled to in the old days before there was such a thing as compulsory super.

This is a lot for me to get my head around.

Even more flummoxing was the fact that when I started to draw my 10% annually from my super account, I had to open… a new super account.

So now I have two super accounts.

Clearly, this is never going to end. I kind of wish I had paid more attention in Year 10 maths, and not taken offence when I was told to leave.

I guess it would have been an investment in my future. Like super. Whatever that is.

‍^{Advice given in this article is general in nature and does not take into account your personal circumstances. It is not intended to influence readers' decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.}