Unlocking financial freedom in your 70s: From work to play

At 69, Bill was working part time, earning around $46,000, while managing two debts: a $30,000 loan due in five years, and an $80,000 loan over 12 years.  What Bill didn’t realise is that he was eligible for $14,000 per year in Age Pension support whilst continuing to work. When I met with Bill we worked out that with a boost from an Age Pension entitlement, he could clear his smaller debt of $30,000 in just two years. 

Once that’s paid off, he’ll be able to focus on reducing the remaining $80,000 loan more quickly.

We looked at the pros and cons of using a lump sum payment from his superannuation to help see the impact of these options on his retirement savings.

Bill is looking forward to travelling in his camper-trailer and spending more time catching up with friends and family.  He’s still enjoying the work at the moment but wants to take some leave and enjoy a full month off each year. He now has increased confidence that his debts can be managed and an exit from working is possible in the near future.

The bad news is that, by delaying making a claim until age 69, Bill has missed out on two years of Age Pension payments.  This is roughly $30,000, which would have been of great assistance with reducing his debt.  There are many others like Bill who are still working and self-reliant and don’t think to ask for help or realise they are now eligible for some Age Pension payments. 

The important point here is that you don’t have to be retired to receive Age Pension. In fact you can have a substantial income from work and still receive a part Age Pension. 

If you have reached age 67 and are still working, there is an upper limit on income you can earn before losing pension entitlements:

• For singles, the Age Pension cuts out if your income exceeds $2,500 per fortnight or $65,020 annually.
• For couples, it’s $3,822 per fortnight or $99,382 annually.

While you are working and receiving the Age Pension, you also get a Work Bonus credit of $300 per fortnight, up to $7,800 annually.  That means that each fortnight the income that is assessed from what you earn is reduced by $300 per fortnight.  Since 1 July 2024, those who are newly eligible also receive a one-time Work Bonus credit of $4,000 in the first year.

Centrelink considers both earned and deemed income from assets like investments and super, as well as any income from other sources.

Bill’s situation is a great example of how Retirement Essentials can help by looking at the bigger picture to reveal opportunities that haven’t been considered, including the way that applying for an Age Pension can boost income and reduce debt.  Our meeting helped to build a plan for Bill that suited his specific goals including more travel, and gave him some clarity and confidence in his retirement plan by knowing what will be a safe level of spending.

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.

Take action:

• Check your entitlements: Age Pension age is 67, but you can apply up to 13 weeks before you turn 67.  
• Get advice and guidance: Financial situations can change quickly, and in those times getting some advice to consider your options can give you the confidence you need to move ahead, knowing you are making the right decisions.
• 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.