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- 10 tips for boosting your retirement finances
- 1. Recheck your eligibility for the Age Pension
- 2. Get ready to apply for the Age Pension
- 3. Check your eligibility for the Commonwealth Seniors Health Card (CSHC)
- 4. Review your Centrelink asset values
- 5. Check you are receiving all your government entitlements
- 6. Apply for your state Seniors Card
- 7. Register for the Medicare Safety Net
- 8. Check your spending levels
- 9. Investigate the Home Equity Access Scheme
- 10. Review your health insurance cover
Like most Aussies, retirees are experiencing more than a bit of bill shock when they head to the supermarket or fill up their car. It’s not much better when it comes to paying your utility costs or replacing significant household items.
With inflation on the march, bank interest rates remaining low and investment markets volatile, many retirees are increasingly worried about making ends meet.
The near future doesn’t look much better, so it may be sensible to take a few minutes to think about what you can do to boost your income or save a few dollars to bolster your household’s bottom line.
10 tips for boosting your retirement finances
1. Recheck your eligibility for the Age Pension
If you’re a self-funded retiree who has been ineligible for even a part Age Pension in the past, now is a great time to recheck your financial situation and see if your position has changed.
If your assets or income have gone down due to extra drawdowns or expenses during the COVID-19 pandemic, or poor performance from your investment assets, you may now be able to sneak in under the assets and income test limits and score a small part pension.
For those still ineligible for an Age Pension payment, research exactly where you fall foul of the assets and income test requirements so you are ready to reapply if your situation changes in the future.
2. Get ready to apply for the Age Pension
For retirees who turned 66 this year, circle the date on your calendar that’s three months after your birthday. Currently, you become eligible for the Age Pension when you’re aged 66 years and 6 months, but you can submit your application to receive the Age Pension up to 13 weeks prior to reaching the Age Pension qualifying age.
When you apply, you’ll need to confirm your identity and supply supporting information and documents (such as your Tax File Number and your bank account and income and assets details) with your application. So get ready early to give yourself time to address any potential issues with Services Australia and to ensure you receive your first fortnightly payment as soon as your eligibility date rolls around.
The easiest way to apply for your Age Pension is through your myGov account linked to Services Australia, so ensure you also have that all set up well ahead of time.
Scoring even a small part Age Pension can be a valuable boost to your retirement income. You also receive the Pensioner Concession Card, which entitles you to cheaper healthcare and medicines.
3. Check your eligibility for the Commonwealth Seniors Health Card (CSHC)
If you’re not eligible for any Age Pension payments, you may still qualify for the Commonwealth Seniors Health Card (CSHC), so make sure you apply for this card as soon as you turn 66 and 6 months (Age Pension eligibility age).
The CSHC is a concession card giving you access to bulk-billed doctor visits (this is up to your doctor), cheaper Pharmaceutical Benefits Scheme (PBS) medications, a larger Medicare refund for out-of-hospital costs and, potentially, cheaper government services. Some estimates suggest the CSHC can save you more than $2,500 a year on your healthcare costs.
A CSHC is only valid for one year, so even if you have been ineligible in the past, lower returns from your investments could mean you are now eligible as the income test for the card is reviewed every year on 20 September. Crunch the numbers to see.
If you qualify for a part Age Pension, update the information Centrelink has about your assets with realistic, current valuations. This includes both your financial assets and the physical ones like your car, caravan or household contents if they have gone down in value.
Under the Age Pension asset test taper rate rules, every $1,000 reduction in the value of your assets could mean you receive an extra $78 per year in pension payments, so it’s worth updating the value of your assets in line with current, lower market valuations.
If the total value of your assets has reduced – due to market declines or even spending on a holiday or home renovation – you could be eligible for a bigger fortnightly pension payment. So, contact Centrelink and update your personal information.
5. Check you are receiving all your government entitlements
For retirees receiving even a small part Age Pension, ensure you are getting all the government benefits you are entitled to receive.
A Pensioner Concession Card is the key to getting cheaper vehicle registration; rent assistance; rebates on your electricity, water and gas bills; help with energy costs if you need essential medical equipment; access to free Rapid Antigen Tests; cheaper local council rates and even less expensive spectacles. It’s also the key to eligibility for one-off special cash payments from the federal government, such as those made during the COVID-19 pandemic.
State governments also provide concession cardholders with benefits. In Western Australia for example, eligible pensioners enjoy a 25% rebate on their local government and water rates and half-price renewal fees on your driver’s licence. Queensland offers annual electricity and gas rebates, plus discounted motor vehicle and boat registration fees.
Most state governments offer a wide – and regularly changing – list of benefits to concession cardholders, so click on the link for your state to find out more:
- ACT Government Savings Finder
- Northern Territory Government concessions
- NSW Government concessions and rebates
- Queensland Government concessions and rebates
- South Australian Government concessions
- Tasmanian Government discounts and concessions
- Victorian Government concessions and benefits
6. Apply for your state Seniors Card
Everyone who is aged 60 and over should apply for their state government’s Seniors Card. These cards give you access to valuable concessions on transport costs and discounts from participating businesses for a wide range of goods and services, which can help stretch your retirement dollars further.
State Seniors Cards are not means tested, so every retiree should have one, as they provide generous public transport and government concessions, plus discounts for holidays, travel, automotive services, household needs and professional services.
7. Register for the Medicare Safety Net
Whether you are single or part of a couple, ensure you are registered for the Medicare Safety Net to help lower your medical costs for out-of-hospital medical services like seeing a doctor or specialist, and for tests like CT scans and blood tests. Once you spend over a certain amount in a calendar year, you receive a higher amount back from Medicare.
If you register as a family or couple for the Medicare Safety Net, Services Australia automatically keeps a tally of the out-of-pocket and gap amounts for your healthcare expenses, so your costs will be combined and you could reach the threshold for higher payments more quickly.
Seniors holding a Pensioner Concession Card or CSHC can access the Extended Medicare Safety Net for Concessional and Family Tax Benefit Part A recipients. For more information, see the Services Australia’s website here.
8. Check your spending levels
If you’re concerned about your retirement finances, it can be a useful exercise to compare your spending with the retirement budgets outlined in the ASFA Retirement Standard.
Updated quarterly, the Retirement Standard can help you determine how your household expenditure compares to that of other retirees. You may need to cut your spending if your household expenditure is too high for your financial position.
Tools like ASIC’s Moneysmart Retirement Planner can also help you work out how long your retirement savings will last given your current spending level.
9. Investigate the Home Equity Access Scheme
For homeowners, if money is getting tight, it could be worth investigating the government’s Home Equity Access Scheme (formerly the Pension Loan Scheme). This scheme can be a great way to top up your retirement income, even if you’re a self-funded retiree.
The HEAS is a reverse mortgage-style product that gives you access to extra income by borrowing against the equity you have built up in your home. If your assets are preventing you from receiving an Age Pension, the HEAS could provide a useful top-up for your retirement income.
10. Review your health insurance cover
Many people forget to regularly review their private health insurance cover as they age. Health insurers are constantly tweaking their policies and launching new ones, so ensure there isn’t a cheaper, more suitable policy available from your current health insurer.
Health funds often offer more cost-effective policies to older members by cutting out benefits for things like pregnancy, birth and IVF services, so check whether there is a policy better suited to your personal circumstances.
It may also be worth considering whether it’s cost-effective to retain cover for extras such as dental or physiotherapy services. This could be one way to reduce your annual health insurance premium while still retaining high-level hospital cover.
Reviewing the current excess on your health policy can also be a good move, as simply increasing the excess you pay if you claim can reduce your annual premium and make it easier to retain your insurance cover if dollars are tight. Once you’ve reviewed your existing policy, compare it with health insurance products from other providers to see if there is better value on offer elsewhere.
A quick way to compare the private health insurance products currently available is to use the government’s online health insurance comparison tool. It allows you to compare policies based on who is covered, where you live and the type of cover you want. You can also select specific hospital services and treatments to provide a more tailored result.