Many Australians have traditionally taken a lump sum payment from their super in retirement, but when this runs out, or returns are not as expected, what happens then?
Some people assume they will receive an Age Pension paid by the Government should their lump sum not last as long as their retirement years. However, the tightening of the rules applied to the Age Pension from January 2017 means people may find themselves being disappointed by how little, if any, income support they actually receive.
Understanding that there are options other than taking a lump sum which may see your super savings last longer, but also may result in you receiving a part Age Pension, is the first step to securing a comfortable retirement.
Taking an income from your super through a retirement income account enables you to know exactly how much income you will receive each fortnight, from which you can then calculate how much Age Pension you may receive from Centrelink. Of course, the benefits of receiving even a part Age Pension extend beyond the monetary value. As a recipient of a Government Age Pension payment, you will also currently be eligible for a concession card, giving you access to reduced prescription medication, utility and rate concessions and many more savings.
By taking just a minute or two to enter some basic details into AustralianSuper’s Age Pension (Centrelink) Estimator, you can get an indication of how much, if any, Age Pension you may receive. This can assist with any discussions you have with a financial planner to ensure you get the best outcome from the superannuation you have accumulated.
According to Paul Johnston*, a financial planner who works with AustralianSuper members, “Independent modelling has shown that retirees with super balances of $100,000 can achieve a retirement income that is 25 per cent more than the full Age Pension and an additional $110 a week. So even relatively modest super balances can make a significant contribution to your income in retirement.”
* Paul Johnston is an Authorised Representative of Industry Fund Services Limited ABN 54 007 016 195 AFSL 232514
This article has been sponsored by AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788. The views expressed are those of YourLifeChoices and not necessarily those of AustralianSuper. For more information, please visit www.australiansuper.com/yournextlife