Many Australians are banking on government support in retirement.
Many Australians are not confident they have enough assets to support their retirement, according to research from IPSOS and MLC, the Australia Today report, with 43 per cent saying they will need to rely on support from the Australian Government.
Among lower income earners, (social grade DE, with annual household income of $33,000), 62 per cent agreed they would rely on the government in their retirement. For social grade C2 (those with $55,000 in household income) 54 per cent will rely on the government in retirement.
The expectation of government support doesn’t stop at the lower income earners. Even among those in social grade A, the highest grade earning $144,000 household income per year, almost one-third plan to rely, to some extent, on the government in retirement.
Will the Age Pension apply to me and will it be enough?
So what’s the reality of relying on the government to fund your retirement? There are different rates of Age Pension payments for single people and couples. Your rate also depends on your income, assets and other circumstances, and you should seek further information from the Department of Human Services website.* If you were born after 1957, you will need to turn 67 before you are eligible for the Age Pension.
However, the maximum basic rate for a single person living alone is $788.40 per fortnight and for a couple it’s $594.30 each. Among other factors, income and asset, excluding the primary home, are also taken into account. For example, if you’re single and earn up to $162 per fortnight via an annuity or other source, you still receive the full Age Pension payment, however if you earn more than $162 per fortnight, your Age Pension payment is reduced by 50 cents for every dollar you earn over $162.*