The recent changes to the age at which Australians can access the age pension have not only triggered a wave of criticism and outrage but have also disrupted traditional retirement plans, requiring some Australians to rethink their strategies and seek alternative paths to retirement.
With Australians now having to wait until they’re 67 to access their pension payments, those who were looking forward to retirement may now be facing the prospect of working longer or finding alternative sources of income during their extended working years.
Despite the disruption, it’s still possible to achieve a comfortable retirement even in the midst of these changes by taking proactive steps and implementing smart financial strategies.
As Australians grapple with the recent changes and what it means for their retirement plans, Starts at 60 spoke to Stockspot’s Head of Superannuation
Lal stressed to Starts at 60 that given the recent changes, those looking to bid farewell to their working life “will need to make adjustments to their retirement plans by reassessing their financial situation”.
“Assess retirement goals and ascertain any changes that need to be made such as working longer or making minor adjustments to retirement lifestyle expectations. Careful planning and consideration is required.
“It’s important to have realistic expectations of your lifestyle in retirement.”
Lal suggests the following strategies that can help you avoid being overly disrupted by the recent changes while still offering the best chance of retiring when you want:
1. Increase your superannuation contributions if you have not utilised your full concessional (before tax) contributions in previous years. Making additional contributions to your super will boost your retirement savings.
2. Consider making salary sacrifice contributions by sacrificing a portion of your pre-tax income. This reduces your taxable income whilst accelerating your retirement savings.
3. Pay off your high-interest debt, such as credit cards and personal loans to increase your retirement savings.
4. Review your investment strategies across superannuation and other investments. Ensure that they align with your risk tolerance and retirement goals. You may seek advice from a financial adviser to help evaluate your investment strategy and maximise returns.
5. Downsizing your home can free up equity that can be used to maximise your retirement savings and lower costs associated with maintaining a large home.
6. Continue to review your expenses and identify areas you can reduce unnecessary expenses.
7. Consider future health care expenses you may face in retirement and plan for them. It’s a good habit to review your private health insurance options and understand the coverage provided by the public health system. It’s important to note that there are out-of-pocket expenses that are not covered by Medicare or private health insurance.
8. Consider part-time work or explore flexible work options to provide you with additional income while still allowing you to enjoy a relaxed, semi-retired lifestyle.
9. Review your superannuation account and check to see if you’re eligible to withdraw your super or meet a condition of release.
10. Understand the government benefits available to over 60s such as the Age Pension, Commonwealth Seniors Health Card, Pensioner Concession Card, Energy Supplement, Rent Assistance etc. Check your eligibility for these programs to ensure you’re receiving the benefits you’re entitled to.
For up-to-date information on these benefits, visit the Services Australia website or seek help from a financial adviser who specialises in retirement planning.
Despite the recent changes to the age at which individuals can access the age pension, it is still possible to retire on your own terms with careful planning, diligent saving, and informed decision-making.
By taking control of your financial future and exploring alternative retirement strategies, you can enjoy a fulfilling retirement that still aligns with your goals and aspirations.