An income in your retirement

Where’s the fun in retirement if you spend your time worrying about money? If retirement is still more than five years away for you, now’s the right time to make sure your retirement savings options are in line. If you’re in or beyond your mid-50s, though, consider seeking professional financial advice on how to turn your savings into income.

There are a number of ways you can use your superannuation savings and investments to generate a retirement income stream and achieve the life after work you’ve been dreaming of.  

Retirement income streams

Once you retire, or satisfy a condition of release to gain access to your super, you can move your superannuation into a retirement income vehicle such as a pre-retirement pension, allocated pension or annuity to provide a tax-effective, regular income stream.

• Pre-retirement pension: A pre-retirement pension helps you generate a retirement income stream while you’re still working. It offers certain tax advantages, which a financial planner can discuss with you in detail, and gives you greater flexibility as you prepare for retirement.
• Allocated pension: An allocated pension provides you with a regular retirement income that is funded by your superannuation. You can choose how much income you wish to receive and make lump sum withdrawals.
• Annuities: Annuities offer you a regular income stream over an agreed-upon period of time. Payments are guaranteed, and they can be linked to increases in living costs.

Accessing the Age Pension in retirement

The government Age Pension provides a safety net for people who can’t fully fund their own income in retirement.

The amount of Age Pension you’ll receive depends on whether you are single or have a partner, whether you have dependent children and the level of your income and assets. The Age Pension is considerably less money than most people are used to living on. See the Centrelink website for details of current pension rates and the income and assets tests.

You won’t be eligible for a part or full Age Pension until you reach the ‘qualifying age’. The qualifying age for men is 65. The qualifying age for women is gradually being increased to match the qualifying age for men, and varies between 63 and 65 depending on your date of birth¹.

From 1 July 2017, the qualifying age to access the Age Pension for both men and women will begin to increase. By 1 July 2023, the qualifying age will reach 67¹.

Maximise your Centrelink benefits in retirement

You may be able to organise your retirement finances so that you qualify for a part or full Age Pension. After receiving professional financial advice, people who don’t think they qualify often find that they can claim a part or full Age Pension.

If you’d like advice on how to ensure a retirement income, you can book an appointment online to organise a complimentary, no-obligation consultation with a Commonwealth Financial Planner.

• Important information
  1. Correct as at 1/02/2011.
  
  The information contained on this web page is of a factual nature only and is not intended to constitute financial product advice. It has been prepared by Commonwealth Financial Planning Limited without considering your individual objectives, financial situation or needs. You should consider its appropriateness in light of your circumstances and consider seeking professional advice relevant to your individual needs before making a decision based on this information. Commonwealth Financial Planners are Representatives or Authorised Representatives of Commonwealth Financial Planning Limited ABN 65 003 900 169, AFSL 231139, a wholly owned but non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.