Posts

Age Pension – what, when and how much?

/in /by

The big question – Does paying taxes while working give you the right to expect an age pension when you decide that you want to retire? – The short answer is no.

What is the age pension?
The age pension is a safety net to support people in retirement who do not have the necessary financial resources to either fully support or partially support themselves.

When can I access the age pension? At what age does a person qualify for an age pension?
For over 100 years, the qualifying age for the age pension was 65. In 2017 the qualifying age increased by six months and will continue to increase by six months every two years until 2024, when the qualifying age will reach 67.

The following table provides a more comprehensive overview.

How do I know if I am entitled to an age pension?
This is a complicated question which is very dependent on a person’s situation. Are you single or a member of a couple, do you own your home or are you renting, how much do you have in assets and what is your income?

The current full age pension is $933.40 per fortnight for a single person or $703.50 per fortnight for each member of a couple. This full age pension is adjusted twice a year, in March and September.

The age pension entitlement is calculated under both an assets test and income test.

Why is the age pension assessed under both tests? If a person’s entitlement is less under the assets test, then what may be payable under the income test, their entitlement is determined by the assets test as this test pays the lower age pension.

In addition to a person’s age and their assets and income, a person applying for the age pension also needs to meet a residency requirement, you must be an Australian resident, and in Australia on the day the claim is lodged. You also need to have been an Australian resident for a continuous period of 10 years or have resided in Australia for a number of periods that total 10 years with at least five of these years in one continuous period.

Australia does have international social security agreements with a number of countries and residence in these countries may count towards your qualifying Australian residence.

As you can see, qualifying for the age pension is not as simple as turning a certain age. It can be complicated, and it would be advisable to talk to an expert to ensure you do receive the right entitlement when you apply.

Source: Mark Teale | Centrepoint Alliance

Should I retire?

/in /by

Mark and I have written about aspects of retirement on many occasions over the past three years. Mark describes retirement as ‘my time’.
In a couple of weeks, I will be celebrating 50 years since I first started working. In case you were wondering, I started working when I was very, very young.

When you get to my age, it is fairly common for people ask me when I intend to retire. The truthful answer is ‘I honestly don’t know’.

At this stage, I still enjoy getting up and going to work each day. I really enjoy the work I do and the people I get to engage with on a regular basis. I have met some wonderful people and got to travel to some amazing places, all in the name of work.

However, I do think about retirement from time to time, and there are those moments when the thought of not having to sit in front of a computer all day looks attractive. But the feeling soon passes.

Retirement requires careful and well-thought-out planning. It is not something that should be rushed into blindly.

The most fulfilling retirements I have observed are those where people have planned out what they want to do. It doesn’t mean having to plan every moment of everyday but having an idea of the sorts of things you would like to achieve in retirement and a deciding on a rough time frame is important. Whether retirement includes travel, ongoing education, voluntary or community work, or pursuing a hobby or business endeavour, they all require some planning.

On the other hand, the most unfulfilling retirements seem to be those that are lacking any plans. They not only erode the will to embrace life but sadly, contribute to a decline in physical and mental health.

While it is great to be able to plan ahead, that is not always going to happen. Occasionally, life throws a curveball that catches us off-guard. We may find ourselves leaving the workforce as a result of circumstances over which we have little control. Perhaps we are unable to continue to work as a result of sickness, or we are made redundant, or a change in economic or family circumstances impacts our business.
Even though we may not be able to control these situations, having a contingency plan in place may help to minimise the disruption that an unplanned exit from work life may inflict.

As retirement will last 20 to 30 years for many Australians, investing some time in planning sound like a perfectly sensible idea to me.

Source: Peter Kelly | Centrepoint Alliance