- Chuyên mục: Dịch Vụ - Thông Tin
- 01 05
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While Mr Abbott says there is no looming cut to the age pension, the possibility of increasing the age at which people can access financial assistance remains on the table long-term.
Professor Susan Thorp, from the University of Technology Sydney, says it is unclear whether upping the pension age to 70 would "induce most people to work longer".
"That depends on people's capacity and opportunity to keep working, and on the availability of alternative sources of income," she said.
"If you can't work and the pension is years away ... an obvious and increasingly important answer is superannuation."
But what is the current process for accessing pensions and superannuation when retirement looms?
What is the retirement age?
There is no clear-cut retirement age according to Dr Mike Rafferty, an Australian Research Council research fellow at the University of Sydney.
He says there are two retirement ages, the official and the unofficial.
"The official age can be broken down into another two: the time you can officially access the age pension and ... the age where you can access your superannuation," he said.
Dr Rafferty says an unofficial retirement age comes into play for wealthier retirees who hang up their work boots when they like, and those people who work in particularly active jobs.
"People ... in physically demanding industries are finding that by their mid to late 50s, they are struggling to stay in those jobs," he said, adding that many then enter retirement.
When can I access my superannuation and the aged pension?
The age at which people can access the pension and their superannuation savings differs, meaning there is often a period where a retiree is living solely off their super.
For both the age pension and superannuation, the age of access depends on when a person is born.
From July 2017, the age at which the pension can be accessed will increase from 65 years to 65 years and six months. It will continue to increase by six months periodically until it reaches 67 years for those born in 1957 and onwards.
The preservation age, which is the age at which people can access their super, also varies depending on when a person was born.
It can be early as 55 for those born before July 1, 1960. People born from July 1, 1964 onwards are unable to access their super until they turn 60.
Once a person reaches the preservation age, they can access their super so long as they are permanently retired, or have reached the age of 65.
Those people who choose to keep working may still be eligible to access part of their superannuation.
|When can I access the age pension?||When can I access my superannuation?|
|Born 1/7/52 to 31/12/53 = 65 years, six months||Born before 1/7/60 = 55 years|
|Born 1/1/54 to 30/6/55 = 66 years||Born 1/7/60 - 30/6/61 = 56 years|
|Born 1/7/55 to 31/12/56 = 66 years, six months||Born 1/7/61 - 30/6/62 = 57 years|
|Born 1/1/57 onwards = 67 years||Born 1/7/62 - 30/6/63 = 58 years|
|Sources: Department of Human Services, ATO||Born 1/7/63 - 30/6/64 = 59 years|
|Born 1/7/64 onwards = 60 years|
Professor Thorp says although the preservation age is rising, it remains much lower than the pension age.
"Under the current rules, a person born in 1964 will have seven years between getting access to their super at 60 and being eligible for the age pension at 67," she said.
"Seven years is a long time in self-funded retirement, enough to use up $200,000 in super if you withdraw annual income roughly equal to the full pension."
Is the age pension subject to income and asset testing?
Yes. The basic fortnightly rate for a single is $766.00 while those in a couple receive $577.40 each. But the actual payment received is based on income, assets and other factors.
There are many assets that are assessable including money in the bank, assets held in superannuation funds, the value of any businesses, real estate (that is not the principal home) or farms owned, as well as the value of any of motor vehicles, caravans or boats.
The income cut-off point, at which the age pension payment reduces to $0, is $1841.60 for a single and $2817.20 for a couple per fortnight.
How is superannuation paid?
Once at preservation age, superannuation can be claimed as a lump sum, as a periodic income, or a combination of both.
Those who choose to take their superannuation in a lump sum should be aware of pension implications, Dr Rafferty warns.
"Means testing means if you have super assets, you have to draw them down under a specific formula which determines what amount of the age pension you can get," he said.
Is there a one-size-fits all approach to retirement?
No. Dr Rafferty says the approach taken by people approaching retirement can differ significantly according to their financial position, occupation and retirement plans.
Home ownership is the number one predictor of whether you will live in poverty in retirement or not.Dr Mike Rafferty
"For people in physically demanding industries ... the idea of transitional careers is largely fiction. Those sort of people will chew up what superannuation savings they have and then go onto other benefits," he said.
"For those who work through to the official age pension age, we tend to see people taking part of their super to pay things off and then they get part-pension, part-superannuation."
Dr Rafferty says "most people don't have enough superannuation to fund their whole life" and use what super they do have to pay off mortgages and replace ageing cars and household goods.
"People are not going on lavish holidays, they're not buying boats, it's people doing sensible things setting themselves up," he said.
But while some prepare for their future as a retiree, the system has been criticised for allowing others to spend up big with their superannuation, so that they will qualify for the pension, or a part-pension, later on.
How much money is needed to retire comfortably?
Dr Rafferty, who says there is no single dollar amount required for retirement, argues home ownership plays a more significant role in retirement standard of living than super funds in the bank.
"Home ownership is the number one predictor of whether you will live in poverty in retirement or not," he said.
"If you own your home and you have a health care card, you're not living luxuriously but you're living pretty comfortably."
What is Prime Minister Tony Abbott proposing?
In a speech to the Sydney Institute on April 28, Mr Abbott said he would make it tougher for new retirees to qualify for the age pension after the next election.
He said he would stick to a pre-election promise of not cutting the age pension and said any increase of the retirement age to 70 would not be within the next five years.
Calling reform "essential and unavoidable", Mr Abbott said there should be changes to eligibility thresholds and the rates at which benefits increase, in the long term.