Pre Retirement (Part 6)

Part 6 of our article on Pre Retirement from our 7 part Pre Retirement Series

Click here to read Pre Retirement (Part 5)

pre-retirement-6Ideally, we would all like to be financially independent, and not need to depend on Centrelink at all.

However, in reality, Centrelink is a safety net, and should also be consider in any retirement planning.

It is important to note, that when applying for the Age Pension, Centrelink will ask you if you have disposed of any assets in the last 5 years. It is therefore imperative that you plan an early as possible for your retirement, and an appointment with Financial Stability is a great way to ensure you are on track.

Age eligible for Age Pension

If you were born before 1 July 1952, Age Pension age is 65. The age increases incrementally until after 1 January 1957, it increases to 67.

Although an increase to 70 years of age by 2035 was proposed in the 2014 Federal Budget, this has not progressed further).

Currently (as at January 2015), the FULL rate for a single Age Pensioner is $22,211.80 p.a., and for a couple $33,488 p.a. (including supplements)

The Age pension is based on an Assets and Income test, and whichever test gives the lower payment, that’s the test that will apply.

However, to obtain at least a PART Age Pension your assets (excluding the family home) need to be below $771,750, and your income below $1,868.60 p.f. for a Single pensioner, and assets of $1,145,500 , and combined income of $2,860 p.f. for a Couple (as at January 2015).

Work Bonus

In retirement some might still like to do some part-time work.

The first $250 p.f of employment income is disregarded, and any unused amount (between zero and $250) is added to your Work Bonus balance, to a maximum of $6,500.

The Work Bonus balance is used to offset any future employment income you earn that exceeds $250 p.f.

Even a PART Age Pension will enable you to receive a Pensioner Concession Card, and the concessions associated with it, especially the Pharmaceutical Allowance.

Commonwealth Seniors Health Card (CSHC)

If you a self-funded retiree, and are not eligible for the Age Pension because your assets and/or income exceed the thresholds, you may qualify for the CSHC.

To be eligible, you must:

  • Be at least age pension age
  • Be an Australian resident, or be in Australia to retain card, and/or have an annual adjustable taxable income less than $51,500 (Single) and $82,400 (Couple-combined).

In our next article, we will explain why an Account Based Pension is an extremely attractive way to generate your retirement income.

Click here to read Pre Retirement (Part 7).

Financial Planning Information

The information on this website is provided for general information only, it is not advice. It has been prepared without taking into account your particular financial needs, circumstances and objectives. You should consult your financial adviser before making any investment decisions.

Read the full Disclaimer here.

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