Kaye Fallick, Author at Retirement Essentials

Federal Budget 24-25: Here’s what retirees need

by Kaye Fallick | Centrelink Age Pension

Federal Budgets can seem a long way removed from our day-to-day lives. Telephone book number expenditure is often quoted on some very abstract projects (infrastructure? cyber safety? border security?) which are hard to relate to. But the money that is allocated in the annual budget will eventually have a major tangible impact on your quality of life; your health, wellbeing and retirement affordability.

That’s why the team at Retirement Essentials has strong views on the things we think could be done to make a huge difference for older Australians. Yes, budget spending is current account (spending money raised from taxes from those currently working). So there is always some discussion around the ‘fairness’ of using revenue from younger taxpayers to fund more services for older Australians. This can be a false argument, though, as nearly every older Australian has paid more than their fair share of investment, across the decades, in roads, airports, childcare and the environment to ensure a better future for younger generations.

Our team also isn’t advocating massively expensive projects (no AUKUS here!). Instead we are looking at the ways the current retirement income system could be improved – for very little outlay. Ways to ensure that retirees are able to remain active and productive for much longer. This includes allowing them to work more – which would significantly benefit the nation’s productivity if it came to pass.

So read on for our thoughts on what Treasurer Jim Chalmers should announce on Tuesday 14 May – and we encourage you to share your thoughts on anything we may have missed. It’s helpful to remember that the Retirement Essentials’ team is in touch with every day retirees, every working day. This means that we are fully exposed to your concerns, needs and annoyances when it comes to managing your retirement income. As always, we’re on your side when it comes to making Australia’s retirement income system work better, sooner.

Doing the sums: What’s needed for an affordable retirement?

by Kaye Fallick | Planning for Retirement

Most of us are open to doing the maths and setting goals if we believe those goals are achievable. Resistance can set in, however, if we think that the targets are unrealistic. It could be that this has become the case with the commonly accepted quarterly ‘Retirement Standards’.
These Retirement Standards (published by the Association of Super Funds Australia or ASFA) were updated late last month, to reflect price changes through to 31 December 2023.
The Retirement Standard suggests two levels of retirement lifestyle; modest and comfortable.
The table below contains the suggested amounts required per week and per annum for those aged 65-84, for each of these retirement lifestyles.
Advocacy group, Super Consumers Australia (SCA) also shares targets for retiree spending. These targets have three levels, low, medium and high which are listed in the table. We’ve also included the full Age Pension rates (including supplements) and median super rates at Age Pension qualification age and when many Australians retire (ages 65-69).

The reason for including these seemingly conflicting amounts is to set the scene for a discussion about how YOU can work out what is a reasonable spending pattern in retirement and whether your current savings will allow you to maintain this cashflow level.

Aged care funding: Is your super up for grabs?

by Kaye Fallick | Superannuation

The Aged Care Taskforce report was finally released in mid-March. It answered some difficult questions and raised a whole lot more. The goal of the taskforce was to consider how aged care services might be funded more equitably and sustainably. Shortly before the release of the report, Prime Minister Anthony Albanese ruled out levies or taxes on the general population and changes to thresholds on the family home.

Most Australians hope to age at home. The taskforce needed to consider how to fund this fairly, while raising money to meet both increased demand and higher expectations of those who will experience residential aged care. This inevitably leads to a move towards more of a ‘user-pays’ system. Currently the portion of costs paid by those accessing care is (on average) 25% of ongoing residential care costs and 6% of home care costs.

For home care, as recently summarised for Retirement Essentials by Aged Care expert Louise Biti, the different aspects of care (accommodation, daily expenses, cost of care and extras) will be supported by government, but everyday living expenses will require a higher level of self-funding.

When it comes to residential care, the cost of accommodation and daily care expenses (including food, electricity and laundry etc) will be considered a personal expense and only those residents with low financial capacity will continue to be supported.