Retirement Questions and Answers

A retirement plan can be a simple or detailed document that outlines when you want to retire, your lifestyle priorities, your estimated daily living costs, and any other documents (such as updated wills and Powers of Attorney) that need to be made to plan for your future.

The kind of pension and benefits you are entitled to depends on your age, assets, and income. You have to have an income and assets test to evaluate this, which looks at your employment, investments, pensions, annuities, and any salary packaging. Assets may include investment properties, caravans, cars and boats, and business assets. The family home you live in is not included as an asset. 

This depends on your income and assets tests, and whether you’re single or in a couple. The maximum age pension for singles is $971.50 for a fortnight or $25,259 a year; for couples is $1,464.60 or $38,079.60 a year. This is without any supplementary payments.*

Knowing how much money to provide a comfortable retirement is a complicated question that depends on many variables. According to the Association of Superannuation Funds of Australia (ASFA), couples who own their own home must spend $69,691 annually to live a comfortable lifestyle in retirement. For a modest retirement, they will need to spend $45,106 per year.*

A transition to retirement (TTR) strategy can be beneficial if you’d like to access some of your super and keep working. If you’ve reached a preservation age of between 55 and 60 and are still working, you can use a TTR strategy to supplement your income while you reduce your working hours or boost your super and save on tax while you keep working full time.   

You can use a TTR pension strategy to help with reducing your work hours to top up your income. Your payments are tax-free and enable you to ease into retirement. However, it can affect your future retirement income and it can be complex to set up so you may need financial advice to understand if it’s right for you.

There are a variety of cards that provide seniors, retirees, and pensioners with discounts on things like health care, transport, and utilities. These are mainly for those 60 years and above and include the Pension Concession Card which provides cheaper utility and medical bills, as well as discounts on public transport in most states. The Senior Card also offers a discount on public transport and some goods and services. The Commonwealth Seniors Health Card provides a discount on prescriptions and medical appointments. 

The following health care benefits are provided by the government to help you save on health expenses. Your eligibility will depend on your circumstances.

• Medicare Safety Net – reduces out-of-pocket expenses for seeing doctors after you’ve spent a certain amount.

• PBS Safety Net – helps you pay less for medicines after a certain amount

• Free vaccinations – free vaccinations for flu and pneumococcal disease

• Cancer screening – free early detection screenings for breast cancer and bowel cancer

• Free annual health assessment – if you’re 75 or over (or 55 for Aboriginal and Torres Strait Islander peoples).

• Free home medication review – help with using medicines at home if you use more than 5 medications per day.

An account-based (or allocated) pension offers regular, flexible and tax-effective regular income from your superannuation for those that have reached the ‘preservation age’ of between 55 and 60. 

Downsizing in retirement is a big decision for many.  Whether it’s to provide more cash flow, for ease of maintenance and convenience or to reduce utility costs, there are definitely some clear advantages to downsizing.  Alternatively, it does restrict available space and may be less flexible with privacy, then it’s the adjustment period to a new neighbourhood and letting go of the emotional attachment of your family home. 

There are a variety of options if you decide not to downsize your home.  Renting out a room or taking on a boarder are both options, as well as converting your home into a dual occupancy.  It may even be worthwhile to consider a reverse mortgage or home reversion but seek financial advice first.

At Olive Grove Financial Advice, we are here to make your life easier as the retirement planning and aged care specialists.  We can help you navigate Home Care, Aged Care and Age Pension and the many confusing systems, for yourself or your loved one.  We also work with Centrelink and service providers to put your plan into place.