The most outstanding feature of Australia’s retirement income system has to be its complexity. During their working lives most people have managed just one source of income – their salary. If they have investments, this money typically adds to savings.
But in retirement many new sources of income open up – namely the Age Pension, superannuation, equity release products perhaps combining with a reduced or casual salary. Suddenly you are confronted with a much more complex challenge than when you worked full time.
How do these different contributions and income streams combine? And how do you take action on one, without adversely affecting another? For instance avoiding what happened to Anna when she downsized her home to free up some cash, but lost her Age Pension as she then failed the assets test.
It can be difficult, but it can also be possible to maximise these different income streams, by knowing the rules and using them to your advantage.
To help you do this, today is the first of a five-part Securing your retirement series.
This series will share an overview of the five key retirement income sources, and then detail the strategies attached to each of these sources so you have a clear idea of how best to manage your mix of retirement income support.
As always, in order to know where you are going it’s helpful to understand where you’ve been, where you are right now and then what the future could look like. So first some context to the ways that retirement can be funded in Australia.
