These people all retired rich (and happy). Here’s how they did it

The law encourages this practice, which effectively doubles the tax-free amount people can allocate to their retirement savings, and is therefore likely to have an outsize impact when both stop working, even if they divorce, which the Ries didn’t.

“While there were some years where making this spousal contribution was a burden,” he says, “it meant that when we retired we were able to enjoy retirement without financial worries. Best financial decision we ever made.”

Ries’ generation has done well out of superannuation, which is why the first rule of retirement is usually to put as much money into super as the law and individuals’ pay allows.

Younger people’s investments have little chance of matching the bounty in baby boomers and Generation Xers’ retirement accounts, according to John Hempton, a fund manager who specialises in identifying stocks likely to fall.

A professional pessimist, Hempton says he can’t see booms in property, shares and bonds repeating themselves for Australians born this century.

“It’s very hard to find a reasonable asset that is not massively high [in price] by any circumstances,” he says. “If you are three, four or five years to retirement, your die is cast. It’s the same sobering outlook for a 28-year-old looking to get in on the market. Things are fricking awful for the next generation.”

Yes, he used the f word, but the g-rated one. It is that bad.

So, how to have a comfortable retirement if you aren’t fortunate enough to be a wealthy worker? Hempton recommends seeking public office.

“Get elected to parliament,” he says. “Sit for eight years and pick up the defined-benefit pension.”

He may not be entirely joking. Federal politicians are some of the few Australians who receive retirement benefits that don’t depend on the ups and downs of financial markets. Most were phased out last century, when actuaries realised there wasn’t going to be enough money to cover their cost. They were just too generous.

Set and forget

Small business owner and financial literacy advocate Bianca Hartge-Hazelman (who is in her 40s) has a message for Hempton’s lost young people: don’t give up!

She implores them to start saving for retirement in their 20s – an exciting time when post-work life is little more than theoretical. The good news: superannuation is designed to be ignored. A “set and forget” strategy is fine, according to Hartge-Hazelman.

Once you choose a fund, and fund it, little more work is required – a view shared by Alexandra West, the chief strategy officer at Cbus Super. Her tip is to not try and time the market by switching assets, say from bonds to shares.

“Doing nothing and staying the course in an investment option that invests in a wide range of asset classes with objectives that meet your needs may be the best investment decision you can make,” she says.

Unfortunately, the average super fund may not be able to afford annual party trips to Ibiza, or whatever people in their 20s think they will be doing in 40 years.

“So we need something more,” Hartge-Hazelman says. “I am a big fan of using debt to buy an investment property – commercial or residential – either inside a self-managed super fund or outside of it to fill any shortfall in retirement savings.”

How to play property using self-managed super funds is explained here.

Evan Thornley is a former internet entrepreneur and politician, although he doesn’t receive a defined-benefit pension because he wasn’t in the Victorian Parliament long enough.

“I reckon I was the only MP who didn’t have a line-by-line understanding of the parliamentary superannuation scheme!” he says.

He believes in using superannuation to invest in property. There’s a catch, though. Most retirees rely on regular income to cover golf-club memberships or restaurant meals. Capital gains aren’t much use when you’re dead.

Thornley points out that houses and apartments are so expensive in Australia that they don’t generate much income relative to how much they cost.

They have, for decades, delivered outsize returns through leverage, though. It works like this: if you buy a house for $100, by borrowing $50, and the price doubles over ten years to $200, your initial investment has quadrupled.

Thornley’s solution to the income/capital gains trade off is consider investing in private debt, which is the act of lending to property developers and other cash-hungry businesses that might be a little too risky for an average bank. Some financial advisers specialise in such deals.

“If you want passive income don’t try to get higher-yielding residential property as it will be poor-quality assets,” he says. “If you need passive income other asset classes like private debt will meet those needs better.”

Non-retirement plan

Staying intellectually challenged is a common retirement tip. It takes work and planning, though. Stimulating volunteer or board positions aren’t handed out to everyone the day they retire.

A former CEO of a bankers’ group for women, Jen Dalitz doesn’t intend keeping working and pleasure separate in her forthcoming retirement. “The reality is I’m a businessperson,” she says. “I enjoy business and I wouldn’t know what to do with myself if I wasn’t connected to my business community.”

Dalitz has what she calls a non-retirement plan. “I’ve been intentionally pivoting my career towards board and advisory roles that will enable me to use and update my knowledge and experience into old age, with the benefit of being able to spend more time on my farm and travelling in the new hybrid world,” she says.

Who should have a better retirement plan than the ex-head of pension manager? Well, former AMP chief executive Andrew Mohl’s advice is very practical, and somewhat specific.

He advises outgoing CEOs to quickly sell shares in their previous employer, no matter how much confidence they have in the business, or how attached they are to it emotionally.

“It is all about diversifying risk and CEOs typically have very high risk in a single stock,” he says. “I learnt that lesson painfully at AMP which has lost 90 per cent of its value since I left!”

Mohl, who left AMP in 2007, initially set himself work-related activities that took up three days a week. He cut back over time as circumstances changed. “The key point is that you can decide how much, what and when,” he says.

Of all the retirement jobs around, there may be few as unexpected, and pleasurable, as the one secured by Stephen Brady, Australia’s former ambassador to France, who is now a public speaker on Cunard cruise ships.

“I enjoyed a day recently when waiting on the footpath of a street in Madrid, an American tourist approached and asked if I was the taxi driver!” he says.

“Or outside my boss’s office on board Cunard, formerly a cabaret dancer and now the resident director of entertainment! Go with the flow. Move forward endlessly curious and with humour!”

Which sounds like pretty good advice.