Jeremy Duffield

Jeremy Duffield is a senior player in the Australian and international financial services sectors, having served as a senior executive with leading global funds manager The Vanguard Group USA from 1980 to 2010. He founded Vanguard’s operations in Australia and Asia, and led them from 1996 to 2010. Jeremy is Chairman of the Australian Centre for Financial Studies and is a non-executive director of MLC, National Wealth Management and Plum Financial Services. He is a member of the Federal Government’s Australian Centre Financial Task Force and was previously a member of the Financial Sector Advisory Council and the Financial Literacy Foundation. He was also Deputy Chair of the Financial Services Council.
Is the Age Pension more valuable than you think?

Is the Age Pension more valuable than you think?

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What would you do if you won a lottery prize of $766,000? That’s a life-changing amount of money for most people. What if you found out you could be entitled to even more – over $1.1 million? The good news is you don’t need a winning ticket to receive that kind of financial boost. You could be entitled to that much if you receive a full Age Pension.

While the Age Pension may not feel like winning the lottery –  because you receive it in a stream of fortnightly payments – for many Australians, its lifetime value is equivalent to a very high lottery payment. In fact, as the table below shows, the lifetime value of the Age Pension –calculated to age 92 –  for a full single recipient is $766,100, and for a couple, it’s a staggering $1,155,600. This isn’t just a small supplement; it can represent a huge portion of a person’s total retirement income. For someone receiving the full Age Pension with $150,000 in assessable assets, Retirement Essentials estimates show this might represent 79% of lifetime retirement income.

When retirement finances feel like a Rubik’s Cube

When retirement finances feel like a Rubik’s Cube

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For many of us, the idea of retirement finances can feel as complex and frustrating as a Rubik’s Cube. It’s a puzzle with many different sides and components that you have to twist and turn until they all align. You’re trying to juggle your Age Pension, super, work income and any other investments you have, all while trying to answer big questions like “How much can I spend?” and “How long will my money last?”

The many facets of retirement 

Just as a Rubik’s Cube has many facets, so too does retirement planning. Each side of the ‘retirement cube’ represents a crucial component, and they are all interconnected. The major ones include:

Superannuation: Your personal retirement savings.

The Age Pension: Government-provided support for eligible retirees.

Other investments: Any additional assets you’ve acquired.

Housing: Your living situation and its financial implications.

Retirement goals: What you hope to achieve and experience in retirement.

Life expectancy: How long you anticipate you will need your savings to last.

The goal is to find a solution that makes you feel comfortable and secure about your retirement future.

Common questions and concerns

Many people embarking on their retirement journey share similar concerns. They often ask:

How do all these different pieces, like my super and the Age Pension, fit together?

Will I be okay?

Retirement Essentials’ most  recent work with clients with our Retirement Readiness tool has shown that the most common advice questions and needs are centered around:

Running out of money – no one wants to do that

Centrelink entitlements – getting them/getting the most from them

Starting an Account-Based Pension – how to convert  your super into an income stream

Estate planning – often related to getting beneficiaries right

Setting retirement goals – working out whether you’re on track

Superannuation contributions – how to maximise your  super

Nicole Bell, an adviser at Retirement Essentials, helped put the puzzle pieces together for  Joseph and Robyn. In their late 60s, the couple had been retired for a few years and had never made any changes to their super as they weren’t sure how it might affect  their Age Pension entitlements. They didn’t understand how all of the puzzle pieces of retirement could fit together, so they just hadn’t been able to take any action at all out of fear of doing the ‘wrong’ thing. They have been  getting by making occasional withdrawals from their super as Joseph’s part Age Pension alone is not enough to meet their needs. They had heard of an Account-Based Pension, but worried if they were forced to take a regular income they would lose some Age Pension benefits.