What will your Pension look like?

Understanding Your PensionLet’s have a look for moment at what your pension from our Government may look like when you retire.

You’ve worked long and hard and paid your taxes – you’re entitled to a pension, right? Sure, why not. But it’s not as simple as, OK you’ve reached retirement age here’s your pension, thanks for coming.

Have you thought about how much you will get as a pension? Do you know what Centrelink takes into consideration? Will what I receive be enough to live on?

Here’s the current maximum payment rates (1):

A single person eligible for the pension is now entitled to an annual age pension – including the pension supplement and clean energy payment – of around $21,913. Around $827.10 per fortnight.

A couple eligible for the pension is now entitled to an annual age pension – including the pension supplement and clean energy payment – of around $33,036.  $1246.80 per fortnight.

Described as an ‘adequate’ income it is well below what The Association of Superannuation Funds of Australia’s Retirement Standard estimates.   They estimate a home-owning couple needs almost $58,000 a year for a ”comfortable”  retirement.  So what are you going to do?

Firstly, talk to your financial planner about what options there are for receiving the maximum amount you’re entitled to. Secondly, look at what other income streams you have. How’s your superannuation looking? What about other savings?

We’ve teamed up with Centrelink to host a seminar on Understanding Your Pension on March 25.  Click here for more details. It will certainly help in getting a grip on what your pension will look like.
1. source: http://www.humanservices.gov.au/customer/services/centrelink/age-pension




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    • In the US, income from both will be taxed hoevewr, if you created the annuity with after-tax dollars, only a portion of the income will be taxed. Taxation for distributions from an annuity are based upon a ratio of 1. Principal and 2. Growth. Only the growth will be taxed, because you have already paid taxes on the principal investment.The exception would be if your employer purchased an annuity on your behalf within a retirement plan. In that case, all of the income would be taxed. Pensions are generally fully taxable as income. Your employer should be able to help you with this. If not, consult with your tax advisor. There are many factors that are unique to your situation.Good Luck!

  2. Figuring out your pension and retirement is really important to figure out before you retire. Then you can be sure that you have enough money saved so that you can get by. My parents are already working on getting this figured out. It would probably be a really good idea for them to get some professional help so that they can be sure that it all goes well for them. Thanks for sharing more about how to do this, it was really helpful!

    • I think you need to read the notes. The estimate asumess you will maintain your present earnings. It is what you will have earned if you keep making your present income until 65. If your earnings or contribution changes means if you earn more or less in future years that changes things. The Canadian Retirement Income Calculator link in the notes takes you to a calculator that lets you adjust future earnings but I’ve found that it works incorrectly with $0 future earnings.

  3. Thanks for sharing this advice when it comes to getting your pension! I definitely agree that it is important to know what your pension looks like before you hit your retirement. It’s better to be prepared for stuff like this than to just hope everything works out alright. Plus, there are a lot of ways to ensure your retirement goes smoothly. The superannuation that you mentioned is definitely a great way to be more prepared; but like you said, you need to make sure you know exactly how it looks!

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