A Quick Guide To Retirement In Australia

It is important that all Australians are aware of the current entitlement and options when it comes to retiring, even if you think it’s too soon for you to consider for yourself at this time. The reality of retirement planning in Australia does not look too different with the passing years and government changes, but there are some myths and assumptions that you don’t particularly want to tie your future to. Today we are going to delve into a quick guide to retirement planning in Australia and what the nature of this transition might mean for your future. 

Aged Care Options

You may think that looking into aged care and retirement homes is a little premature, but it’s good to know what options are out there. You will want to think about the kind of care that you feel you may need, whether it be community care or something more tailored to suit your health or lifestyle needs. It’s best to look for some retirement villages and senior residences in locations where you think you may like to spend your golden years. 

Be sure to get a thorough feel of any location before you build it into your plan. If you do opt to secure a property within a retirement village, you shouldn’t just consider the home and the care provider’s health services, but also their amenities as well. Think of the features available to you before you look into the financial aspects during these preliminary steps, as it’s recommended you develop a strong gauge for what you’d like your retirement to look like over what your finances can support. After all, you may also be eligible for financial assistance with your aged care provider, so be sure to look at all inclusions and benefits before choosing your provider too. 

Payments and Eligibility 

Alongside financial assistance from care providers, you may also be eligible for government assistance when you retire. When you reach an age where you’ll be eligible to apply for Age Pension, you can receive a set amount of funds for basic living essentials that are covered entirely by the government. The Age Pension is not available to people who exceed an income and asset threshold, however. Applicants for the Age Pension also have to be Australian residents for at least ten years. 

You may choose to complete a Combined Claim with your partner which will take into account your combined income and assets. You may also be eligible for the Pensioner Concession Card and the Commonwealth Seniors Health Card.

Work Bonus and Renting as a Retiree

If you choose to work through your retirement, you may also be eligible for the additional Work Bonus scheme. This Work Bonus means that you can receive an extra boost to your income which can assist you in reaching your retirement goals a little sooner than anticipated. The good news is that you do not need to apply for this at all as it will be automatically put through when you declare your income at tax time. This initiative is to incentivise Australians to keep working but to also add extra support to those nearing the end of their super-earning years. 

Australian retirees who are accessing government payments are also eligible for Rent Assistance and the Rent Deduction Scheme. This means that your rent payments can be partially covered if you can demonstrate eligibility. 

The Retirement Age 

As of 2021, the retirement age is 66 but this is not a static number and it is important to remember that. The qualifying retirement age will steadily increase to adjust with projections from the ABS and general life expectancies, with the idea being that Australians need to afford to retire and fund the next decade or two of their life. In 2023, the retirement age will be 67, so base this number on your date of birth rather than projecting your retirement plans on the current age for this year. 

Knowing what your own retirement age will be benchmarked against the Australian retirement age is important for a number of reasons, but arguably the most noteworthy reason is that it gives you clarity around career planning, what you can afford and what debt you cannot take on, health care planning, and so much more. 

Financial Advice

One of the more understated pieces of advice is to talk to a financial advisor. You can’t really have too much or even not enough money to see a financial advisor, as the guidance is tailored to your unique circumstances and your future. Debt, assets, super and even your family structure will be discussed and a plan put forward that makes you feel more comfortable and educated in your choices. Try and find an advisor that is not attached to a bank as they will be more likely to give you unbiased advice, and involve your partner or child in the process so that you’ll have someone to discuss your plans and options with. 

This is a quick but by no means exhaustive retirement guide. There are so many factors to consider, and those factors change each year and with each choice you make. Have conversations often with your significant other, family, and other loved ones who may be involved or invested so that you have different perspectives and support in your decisions.