*Life expectancy estimates have been calculated based on the Australian Life Tables 2015-2017 with 25-year mortality improvements, as provided by the Australian Government Actuary.
2. Do you know when you can access superannuation and other government entitlements?
Did you know Australians often apply for the Age Pension an average of 2.3 years after becoming eligible? It’s estimated that single retirees are foregoing an average of $37,000 in Age Pension entitlements while couples may forego close to $60,000ᵈ. There’s also no back pay when it comes to the Age Pension, that’s why being aware of age requirements is essential for effective retirement planning to maximise your financial resources.
When it comes to accessing some or all of your super, you generally gain access once you reach preservation age, which ranges between 55 and 60, depending on your birthdate. You also need to have met a condition of release, which includes reaching your preservation age and permanently retiring or ceasing an employment arrangement on or after age 60. The qualifying age for the Age Pension is now 67 and you can submit your claim in the 13 weeks before you turn 67.
3. Do you know the retirement income sources?
A key consideration for a good retirement plan is to maximise your retirement income from a combination of retirement income sources. Let’s recap four means Australians use to support their retirement:
Account-Based Pension
A flexible superannuation income stream offering a wide range of investment choices, lump sum withdrawals, and variable income. It’s important to keep in mind that your account-based pension only lasts as long as your super money does and it’s not a guaranteed income for life.
Age Pension
Government social security support that includes income and benefits like healthcare discounts. Eligibility for the Age Pension offers essential benefits. The amount received changes with indexation and varies based on your total assets and income. Approximately two-thirds of Australians over 66 years old receive the Age Pension.ᵉ
Assets
Wealth accumulated over time being savings, the family home, inheritance, shares and other investments.
Lifetime Annuities
Lifetime annuities provide regular income that’s guaranteed for life and can enhance access to the Age Pension. They can complement account-based pensions by addressing longevity risks. Generally, individuals aged 50 - 95 can purchase LifeIncome, a lifetime annuity, using super or non-super monies. Please note that when using super monies, individuals will need to have met a condition of release.
Investment-linked lifetime annuities, pioneered by Generation Life, are the new breed of flexible, lifetime annuities where performance is linked to your investment choice. Lifetime annuities can generate an income for life that grows over the longer term.
