Comfortable retirement costs less than many think as shares rally on Middle-East truce.

[00:00:01]Coming up, the Australian share market surges on a Middle East cruise, the oil price slides, and how much money do you really need to retire comfortably? All of that and more next.

[00:00:14]>> [music] [music] [music] >> Hi everyone, welcome to the SBS on the money podcast for this Monday, the 15th of June, 2026. It's a day where the Australian share market rallied the 200 up by 1.25%.

[00:00:40]That's as the US and Iran agreed to an interim deal to end hostilities in the Middle East. We'll have the details with Daniel Martin from Alvea Asset Partners soon. But first, to your retirement. The Association of Superannuation Funds of Australia says a single person seeking a comfortable retirement now requires $630,000 by retirement age, or $730,000 for a couple. Now, a comfortable retirement allows for things like top-level private health insurance, home internet, car ownership, occasional meals out, an annual domestic trip, and one overseas trip every 7 years. ASFA says many Australians actually overestimate the savings they need, with 42% feeling they'll require more than a million. To tell us more, I spoke with ASFA CEO Mary Delahunty.

[00:01:32]So, Mary, a single person needs around $630,000 for a comfortable retirement, but other reports suggest Aussies think they need $1 million. Why do you think there's this large discrepancy?

[00:01:46]>> I think people are feeling the cost of living pressures today, and they're projecting that forward to what their retirement might look like. And that means they're overestimating potentially the amount of money they'll need in their retirement.

[00:01:58]>> What about when you ask people of different age groups, are there different outcomes?

[00:02:03]>> Interestingly, the closer people get to their retirement, the more comfortable they are with the lump sums that they'll need and the more optimistic they are.

[00:02:11]So, we can see that if you're aged around 50 to 64, you're you're more likely to think that you're closer to your retirement goals uh than if you're 25 to 34. So, between 25 and 34, 51% of people expect to need more than $1 million in their retirement. I think they're doing this because they have housing pressures, they are feeling the cost of living pressure, and feeling their lower lower wages, and they're projecting that forward.

[00:02:41]>> What does $630,000 get you in a comfortable retirement?

[00:02:46]What does that comfortable mean?

[00:02:48]>> We imagine that people wanting a comfortable retirement will have things like full health cover in their insurance. They will want a decent car to get around in, a few streaming services to watch, a good mobile phone that they'll change every few years, and enough to um eat out every now and then, and go overseas maybe once every 7 years.

[00:03:07]>> How does this report compare with previous ones historically, and what drove the increase in in that comfortable level?

[00:03:17]>> So, this report shows us that actually to reach a comfortable level, expenses have increased. We're seeing that driven a lot by the electricity prices going up by around about 25%.

[00:03:28]Also, things like fuel, about the same amount. Then you think about what are you eating and drinking? So, beef is up nearly 12% um as an example, and tea and coffee has gone up almost 11% as well.

[00:03:41]>> Finally, um what's the message here? How can you make sure you're on track for a comfortable retirement, and does age play a part? How how late can you start?

[00:03:49]>> I think you've got to make the most of the milestone check-ins. So, if you're 40, have a jump onto your fund's website, onto the ASIC website, or onto ours, and check how you're tracking against your milestones. If you're 30 and you don't have any money in super, you can still make it to a comfortable retirement. So, check against your age and what lump sum you would be expected to have at that age, and be comfortable that you're on track to reach that level of retirement.

[00:04:16]>> Delaney, thanks, Mary.

[00:04:18]That's Asper's CEO, Mary Delaney, there speaking to us. Okay, let's go to the Australian share market now. The S&P ASX 200 surged 1.3%, its highest close since mid-April. That follows the interim deal to end those hostilities in the Middle East. Oil tumbled nearly 6% compared with this time Friday. Gold up three.

[00:04:36]Energy consumers like Qantas did well, and BHP hit a record high. For more on the day's market action, I spoke with Daniel Martin. He is a senior investment analyst at Alveary Asset Partners.

[00:04:47]So, Daniel, the ASX is at a 2-month high as the US and Iran reach a deal to reopen the Strait of Hormuz. The oil price slumped, and petrol prices are now below where they were before the war started. Although, you know, you do have to take into consideration there the fuel excise cut. That's That's in there as well. But But surely, this isn't the end of the conflict or all the issues surrounding it. And what do traders think? Are they still betting on more uncertainty?

[00:05:15]>> That is a certainly a tough opening question you hit me with there. And I think when we talk about where the oil price has gone, so you've seen it immediately sort of fall back towards that $85 mark. And your question there is is this the end? Well, we've heard, I think, 38 times that we are near the end or near an agreement of tariffs, and near the Strait of Hormuz rolling off.

[00:05:35]And then now, the fact is that it's just a signing ceremony planned for Friday.

[00:05:41]There's no actual details, or there's nothing that's necessarily been struck.

[00:05:44]And that's why we're still sort of sitting at 85, that pre-February high.

[00:05:49]Now, the longer-term view and the way you should think about that is the supply-demand imbalance. That doesn't just simply sort of rebalance overnight.

[00:05:57]There's still the infrastructure fallout. There's still the underlying bid from global reserves being pulled down. And you most likely have a contagion area event now where globally you've got global reserves probably go back to where they were in January and possibly higher as people realize that they probably should carry a little bit of a larger weight. I know Australia locally might be considering the same thing.

[00:06:19]And you could make the argument, you know, that the there is still, you know, the reversal of the naval blockade measures in the strait. But from an investor perspective and the way that you should think about it outside of the oil price, I think today locally you've seen at this time sort of the airlines have trade traded back up. Qantas sort of plus five version, plus 12. You've seen the energy names retrace. And they're all sort of moving directionally where they were to pre-February, but they're not not necessarily back at where they are. So, for us it really comes down to where that signing ceremony. And I mean, we still have five days to get there. So, we'll see if we get there first and see how that plays out.

[00:06:55]>> Okay.

[00:06:56]Um it's also a big week for global central banks. I think the US Federal Reserve is meeting later this week.

[00:07:01]Tomorrow we've got the Bank of Japan. I think it's the first meeting without its governor ever because he's he's in hospital. But we've also got the RBA board meeting meeting today, meeting tomorrow. Two-day It's a two-day meeting. What's the market now predicting given we're seeing three of the big four banks say, "Hey, we don't think the RBA is going to lift any more.

[00:07:19]In fact, the next move is likely to be a cut, but not until next year." What's the market thinking?

[00:07:25]>> I mean, I I feel largely you've answered your own question there. But I think for us the important part is the outline of that. So, three of four are going, "Yep, we're a hold for tomorrow." And we, you know, we largely go, "Okay, that's probably expected. It's illogical. It makes sense, you know, if you do have the signing ceremony play out, you do then all of a sudden have the straight from was open and then you sort of go, well, what is the forward-looking number start to become? I mean, you noted in the commentary before about the fuel excise. Well, when that rolls off at the back end of June and the government hasn't emphasized that they're looking to extend that. That's sort of a 26 cent per liter hit to consumers' pockets at the petrol pump. So, that's interesting what that does from inflation and what we do oppose is the simplicity that yes, next year we're seeing rate cuts. I mean, all three or three or four think we're rate cuts. It's only one cut back to 4.1. You know, that's back to where we were at March. The low of 2025 is 3.6 and and that is a view largely shared by the bond market. So, when we think about where we think directionally rates are going, we're more looking at sort of the three 10-year bond yield and where that sits relative to cash rate. You know, that's still sitting at 4.8% today when I last checked. And that for us gives us a bit of an indication that you're probably higher for longer and our position on that, I mean, if we go back 12 months ago, the commentary was at this time this year we'd be sitting at 3.1 to 3.6. So, it gives you quite a good idea of how quickly over 12 months everything can shift. And that for us is really now, do the longer-term numbers start to see a bit of softening on inflation and how does that work from the governor?

[00:09:00]>> Let's focus on Space X if we can for a bit. It's had a spectacular debut on Friday, Saturday uh US time. Um second day of trade tonight in the US. We've also seen interest in space-related ETFs, for example. What's your take on the sector, especially as other AI-related companies like Anthropic and OpenAI look to list?

[00:09:21]>> Yes, it's um I'm going to go very early on this one.

[00:09:24]I'm sure I'll probably regret it later, but it's definitely one of the more uh spectacular IPOs in my career and it's quite the grandiose statement to make.

[00:09:31]And it's not spectacular to ask from the valuation metric or from what online business does, but it's more how it rewrote the rules of IPOing. Like, you've had indexes shift to 15 days until it being introduced into their universe rather than the traditional 3 months. As a result, then you get the ETF behemoths come in with liquidity and sort of help keep the float going.

[00:09:54]Albeit, not every index did play ball, so that's why you've definitely seen the pickup in thematic ETFs, which I'll touch on shortly. But, the other problem that I really liked about it was the fact that the free float you saw at a baseline three times more of the typical allocation go to non-institutional investors. So, we're talking about, you know, moms and dads, individuals all trading on their own personal account were able to gain access, and that's us.

[00:10:18]Is it perhaps a bit of an interesting way and a a rewriting of the rulebook for IPOs? I mean, we'll see Anthropic and OpenAI if they do the same thing.

[00:10:26]They've both filed their S-1, as you noted, coming into the back end of this year. So, there's definitely likelihood that the IPO could play out for them, and the success of SpaceX on the one day of trading I will flag, you know, does perhaps indicate that it's more likely they should enter the IPO market. The The comment on the the space ETFs, and this to us is very important. So, it's one of those great caveats where you've seen in the rise of ETFs a lot of thematic ETFs come up, and a lot of those space ETFs. But, when you look through the prospectus of SpaceX, what you actually figure out is that the proportional value or the the total addressable market, they call the TAM, a lot of that was a derivative of artificial intelligence. It wasn't net necessarily the space-related program.

[00:11:11]So, although you might be thinking you're getting a space-related ETF, you are picking up quite a hefty exposure in a single stock that does lean on AI. So, it's just one of those points we think whenever you're going into ETFs, you just need to be a little bit more conservative, a little bit more aware as to what you're actually buying into, and then it never hurts to look under the hood.

[00:11:32]>> And I guess a good example is just SpaceX, the actual company, because not only is it space exploration, it's communications, and also has a AI exposure through its XAI division, too.

[00:11:44]>> Yes, no, that's that's exactly right.

[00:11:46]And that's really where, you know, you've got the the profitable businesses on the left and the XAI, and that's really where all the capital's being deployed. Um so, that for us just being aware of the makeup and where the market's placing a lot of the value.

[00:11:57]I think if you just go through the prospectus, you'll see the TAM was sort of 26 trillion, of which um 70% was related to AI. So, it's just >> And when you go through the prospectus, you've got to go through 10, 12, 15 pages of rocket pictures at the beginning first anyway. Anyway, um for to wrap up, what are you telling your clients right now, and where do you see the opportunities for investors?

[00:12:19]>> Yes, it's a great question. And I think one of the one of the luxuries we have is being a multi-asset manager. So, we get to shift across the investable universe and be really dynamic about where we feel the best best risk-adjusted return sits. So, the number one point at the moment is the opportunity isn't in the index for us. I mean, if you go look at the S&P 500, you take out the AI and AI enablers, the S&P 500 is still negative as at June 9th. So, that might have flexed, but it was still under zero for the year from performance. You know, 50% of the performance has come from five names. So, you're just building this greater concentration into fewer and fewer names. Where we're thinking there's a bit of opportunity is the traditional quality basket. That's actually been a perennial underperformer for the last 6 months. So, you know, these are businesses that continue to deliver great EPS growth, continue to deliver great revenue growth, great cash flows, but they just have faced a bit of multiple compression simply because they don't have the exposure to AI or an AI enabler. And as we noted at the very beginning, the rise of thematic ETFs, you've seen a lot of capital sort of flow towards what we think is a little bit hot, a little bit sexy.

[00:13:26]And that for us then goes on to the next point is well, if the general market's feeling perhaps a little bit hot, a little bit sexy hunting, then we're going to look to increase our fixed income exposure. You know, I noted that the 10-year bond yield earlier, you know, that's sort of sitting at 4.7%.

[00:13:41]That's a reasonably attractive risk-free rate you could take on and just lower the overall portfolio risk profile. So, that's just another thing we're complementing and then but at the the real crux of it and the the core philosophy is we're just continuing to do what we're doing, you know, we're working through identifying what we think are high high-quality risk-adjusted return opportunities. You know, if we're having to forego participating in a bit of that the AI build-out, it doesn't mean we're not looking there. It means you perhaps you consider what is the AI, you know, picks and shovels. What about the energy providers? How do you think about all the services that are applied? Because that build-out is still occurring at a rapid rate, but what about those that have the tangible cash flows today? And that for us, you know, that's really how we stick to our core discipline.

[00:14:26]>> Daniel Martin there from Alveo Asset Partners and he wraps up the podcast for this Monday.

[00:14:31]Like it, give it a review and share it if you enjoyed and don't forget you can watch on the money during the 6:30 weekday edition of SBS World News on SBS. The podcast returns tomorrow. It drops after the market close. It's Reserve Bank interest rate decision day.

[00:14:46]Catch you then.

[00:14:46]>> This SBS On The Money podcast is provided [music] for informational purposes only and should not be understood as constituting advice [music] or a recommendation. It is not personal advice and it does not consider your personal circumstances or objectives. You should contact [music] a licensed professional before making any financial decisions.