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Steve and Jenny had recently retired, but had a nagging feeling that they could have organised their super better. Their balance was substantial, but they wanted a second opinion on whether they had missed anything that mattered when it came to accessing this money. They recently contacted Retirement Essentials adviser, Sharon Sheehan, to double check their numbers. It was a great call – her suggestions to restructure their super have led to additional Age Pension income of more than $50,000 over three years. Here’s what she found.

Steve (age 66) and Jenny (age 63) booked an advice consultation. They wanted to discuss their retirement plans and explore options to maximise their finances before Steve turned 67 and was eligible for an Age Pension. They knew it was important to find out about strategies to make the most of their money but were unclear where and how to start.

They were in the fortunate position of owning their home with no mortgage. They believed that they would need $80,000 per annum in retirement to meet their ongoing household and lifestyle expenses. Steve had $900,000 in an income stream (an Account-Based Pension), while Jenny had $450,000 in super in addition to a small amount of cash, a car, and their home contents. This meant that the total value of these assets (excluding their home) was around $1.4 million.

Exploring options to boost an Age Pension

Steve wondered if he might qualify for a small part Age Pension when he turned 67, but as the upper limit for the assets test at the time of the consultation was $1,012,500, excluding the value of the family home (note the current limit as at January 2025 is now $1,045,500), he was unsure which assets Centrelink would assess, and whether there were any opportunities for he and Jenny to reorganise their super to boost his Age Pension income.

Based on their starting position, adviser Sharon estimated a small part-Age Pension entitlement of $112 per fortnight ($2,912 pa) would be payable when Steve reached age 67. Steve was then thinking that the combination of his income stream payments and some periodic withdrawals from Jenny’s super fund might allow them to achieve their desired household income of $80,000 per year.

Sharon assessed Steve and Jenny’s situation and pointed out that one of the things in their favour was the three-year age gap between them. This meant when Steve turned 67 and Jenny was only 64, any funds held in Jenny’s super account (in accumulation mode) wouldn’t count for Centrelink purposes for another three years until she reached age 67 as well.

Importantly, if Jenny converts her super to an income stream before she turns 67, Centrelink will assess her full balance which would eliminate Steve’s Age Pension and Pension Concession Card entitlement due to their household assets exceeding the upper limit.

The power of the ‘Younger Spouse’ strategy.

Sharon suggested that one way Steve and Jenny could dramatically boost Steve’s future Age Pension income is by utilising the ‘Younger Spouse’ strategy.

Because any funds held in Jenny’s super account are exempt from the Centrelink assets test until she turns 67, there is effectively a three-year window during which Steve qualifies for the Age Pension, but Jenny’s super balance is not counted by Centrelink. This creates some valuable planning opportunities to really maximise Age Pension income in their early retirement years.

Sharon proceeded to use the Retirement Essentials Retirement Forecaster to demonstrate a scenario where Steve withdraws $110,000 from his super in June 2024, which Jenny adds to her super as an after-tax (non-concessional contribution). In July 2024, Steve then withdraws a further $360,000 from his super and Jenny again uses these funds to make an after-tax contribution to super.

The outcome of these transactions is a reduction of Steve’s assessable assets of $470,000, with this amount now held in Jenny’s super fund, where it is not counted by Centrelink for a three-year period before Jenny is 67.

Unlocking an extra $54,000 in Age Pension income over three years

When Sharon shared an updated estimate of Steve’s Age Pension income, Steve and Jenny were thrilled to learn it has risen to more than $21,000 per annum as his share of a couples’ Age Pension – an increase of more than $18,000 per annum ($54,000 in total) for the three years until Jenny turns 67.

So, where an age gap exists, by reorganising the amount of super held by each member of a couple, it may be possible to seriously boost your Age Pension income, while helping your super assets last longer.

Steve and Jenny were excited at the idea of this additional income which would also take the pressure off their super savings.

Taking action

Steve and Jenny’s situation is a great example of how Retirement Essentials can help by looking at the bigger picture to reveal opportunities that you may not have known about, including the decisions you make about whose name to hold super assets in, and how to take your Age Pension income to the next level.

It’s never too late to review your situation and explore opportunities for greater financial freedom.  Sometimes, all it takes is a fresh perspective to open the door to new possibilities – and increased peace of mind across your retirement journey. The Retirement Essentials Retirement Health Check is a comprehensive review of your savings, income needs and projected income which allows you to understand your likely situation and make any changes necessary to maximise your future income. 

Tips & Traps 

Contribution rules: It’s important that you are aware of the rules regarding contributions to super, including limits and tax implications
Tax on Super: It is important to weigh up the pros and cons and understand the differences between a super accumulation account where fund earnings are taxed at a maximum of 15% and an income stream where fund earnings are taxed at 0%. Outcomes will vary on a case by case basis depending on a range of factors including the investment option held, market performance over time, and the size of any additional Age Pension entitlement arising from the Younger Spouse strategy.
The importance of checking your entitlements: Age Pension age is 67, but you can apply up to 13 weeks before you turn 67.
Seeking advice early:  Your financial situation can change quickly, accessing appropriate advice to understand your options can give you the confidence you need to move ahead.
The need to plan ahead: Thinking about retirement well beforehand can help you avoid the common pitfalls and work through the best options you have to manage your super and investments.

Could you, or someone you know benefit from exploring a Younger Spouse strategy?

What steps have you taken to maximise your retirement income?

This article is provided by Retirement Essentials Representative Number: 001260855. We are an authorised representative of SuperEd Pty Ltd ABN 88 118 480 907 AFSL #468859. This information is not intended as financial product advice, legal advice or taxation advice. It does not take into account your personal situation, goals or needs and you should assess your own financial situation, consider if the information is suitable for you and ensure you read the relevant Product Disclosure Statement (PDS) if you choose to make any changes to your financial situation. It is always advisable to consult a financial adviser before making financial decisions.