Lorraine* is 64 and wants to ensure she gets to enjoy a retirement. She describes her financial situation and asks Noel Whittaker whether she can quit work.
Q. Lorraine
I’m 64 and have been working full time for the last 16 years. I own my home and car and I have no debts. I have about $250,000 in super and if I leave work I will get long service leave etc adding round $30,000. My mum is 92 so I will eventually inherit half her property, which has a median price of about $1 million.
I’m so scared of leaving work, but my brother never got a retirement, and I’m weighing up spending time with grandchildren and enjoying life, compared to sitting in this office day in and day out. Do you think I would manage? By the way, I love your book.
A. From the information provided, it would appear you will qualify for the Age Pension at age 66. That’s just two years away. If you qualified for the Age Pension today, and we assume your assessable assets are $300,000, you would be tested under the assets test and qualify for a pension of around $933 a fortnight or $24,000 a year. Once you retire from your job, you will be eligible to access your superannuation, so it’s just a matter of doing the sums to confirm that you can live quite happily on the $280,000 you will have when you finish work until you qualify for a pension or receive a bequest from your mother’s estate.
Obviously you will need to draw on capital, but that should not be a problem in your present circumstances. My advice is to follow your dream and stop work.
* Not her real name.
Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature, and readers should seek their own professional advice before making any financial decisions.
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