In this article we detail how the Age Pension is assessed, how the income and assets tests work, and illustrate with case studies for a Single and a Couple.
Transition to retirement income streams (or pensions) allow you to gradually draw on your super benefits while you’re still working and moving towards your retirement.
The amount of super YOU need to retire will depend on your personal circumstances, financial resources both inside and outside super and your lifestyle. So before you set an arbitrary super target, block out the fearmongers and think about the big picture.
Increasingly, there’s no such thing as a typical retirement. We talk to three different people whose retirement turned out a lot differently than they planned for.
We look at the rules that apply if you change your mind about heading back to employment after retiring.
Although there is no ‘retirement age’ in Australia, there are two ages that are important to know for planning your retirement…
You can make contributions into your super account from your take home pay or money outside the super system. Since these contributions have already been taxed before you contribute them to your super account, they are not treated concessionally and are called non-concessional contributions.
The key thing to understand about the work test for super contributions over the age of 65 is that you need to be ‘gainfully employed’ on at least a part-time basis to pass the work test.
Although it sounds complicated, bring-forward contributions are just what they sound like – you bring forward your non-concessional contributions caps from future years and use them in a shorter time period.
When it comes to the super system, reaching age 60 triggers an important change. It means you can withdraw you super benefits and most people pay no tax on their savings.
The decision about when to retire is rarely made overnight. It’s a major life event and deserves careful thought and planning. Finances play a big part, but so do your health, your partner’s circumstances and whether you still enjoy your work or are itching to leave.
Australia’s super system has lots of rules – many of which have significant penalties if you breach them – but not every rule applies to everybody at every age.
You can access your super in Australia when you turn 65. It is the most straightforward condition of release. To apply for your super benefits you should contact your super fund.
Continuing to contribute to your super account even after you have retired can be a rational decision, as your super savings are taxed at a lower rate than your normal income outside the super system.
If you are aged 65 or over, compulsory employer contributions like Super Guarantee contributions can be made directly into your super account.