Has the recent increase in the eligibility age for the Age Pension put a damper on your plans? Here’s our guide on how you could avoid missing out as a result of the changes.
What’s Changed Exactly?
Over the course of the past few years, eligibility age for the Age Pension have been increasing. If you were born after the 1st of July 1952, your Age Pension eligibility age will increase by 6 months every 2 years – right up until it reaches age 67.
What this means is that if you’re 45 years of age right now and you were hoping to retire at 60, you’ll have to wait 7 years before you can apply for your Age Pension. And as you may have noticed – this could leave you having to rely on your savings between the age of 60 and 67.
Tips to Help With Your Prolonged Waiting Period
Here are a few tips to help you to maximise your savings and avoid cutting it fine over the course of the next couple of decades.
Add to Your Savings
If you have a personal savings account, now could be the time to start contributing a little more to it as the months go by. You could consider a range of investments which could help you to enhance your savings, or obtain expert advice to see where you may be able to reduce your expenses and save a little extra each month.
Increase Your Super
If you’re willing to sacrifice a little more of your salary each month, adding to your super could be an effective way to add to your savings. An additional benefit of this option is that instead of being taxed at your usual rate, your salary sacrifice contributions are generally taxed at 15% instead. Making an after-tax/non-concessional contribution could be an additional option – and you may be eligible to add $100,000 every financial year if the balance of your total superannuation is under $1.6 million.
Take Advantage of What You’re Entitled To
While waiting to be eligible to receive the Age Pension, you could also be entitled to receive certain other concessions. For over 60s, the Seniors Card could help you to enjoy discounts at many different types of participating businesses. If eligible for Centrelink concession cards you may be able to reduce the costs of your medication via prescription. There are criteria relating to these entitlements however, such as them possibly not remaining available once you retire – but for more information on this, it could be worth-while to get in touch with us for financial guidance.
Lindale Insurances Pty ltd ATF Lindale Insurances Trust ABN 27 027 421 832 is a Corporate Authorised Representative of Millennium3 Financial Services Pty Ltd AFSL 244252and ABN 61 094 529 987. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice and consider a Product Disclosure Statement. For Australian Residents Only.
Disclaimer: The views expressed in this publication are solely those of the author; they are not reflective or indicative of Millennium3. They cannot be reproduced in any form without the express written consent of the author.