Saving for Retirement

Why is saving for your retirement so important?

Consider these facts: 

Retirement planning is about giving yourself choices - so that when you finally have all the time in the world to do whatever you want, you can afford it. 

The focus on preparing ourselves for retirement has increased sharply over the last few decades and it's clearly a subject that won't go away. 

Where once we could safely assume a Government pension would be waiting for us at the end of our working life, the Government is now strongly encouraging us to save for our own retirement by making superannuation compulsory. 

Australians are today living longer however the national birth rate isn’t keeping up with our steadily ageing population. 

To make the problem worse, over the next few decades a whole generation of baby boomers are set to retire.

All of these factors mean that there will be fewer and fewer taxpayers to fund our social security system. It therefore makes good sense to start planning for the lifestyle you want in retirement. Don't risk your longer-term security by putting off making decisions about it. Think about what you want, then do something about it! 

Contact Us for more information and to discuss the most suitable solution for your unique situation.

Types of income:

Types of retirement income streams

Allocated Income Streams: 

Allocated income streams tend to be the most flexible, however they must be purchased with superannuation money. Features of allocated income streams include:

  • Flexible income range. You may set you pension between the minimum and maximum pension payment levels. These levels change every year; 
  • You can access your capital at any time; 

You have a wide range of investment choices – this does mean though, that your account can fluctuate both up and down dependent upon the investment performance; 

You may be able to receive a 15% tax rebate on the income payments;

You may be able to receive part of the payments tax-free. One important thing to note is that allocated pensions are not guaranteed for life, so your money may run out within your lifetime.

A set of factors, called the Pension Valuation Factors (PVF), are used each year to determine the level of income that you may be able to receive. 

Lifetime Income Streams: 

Lifetime income streams provide you with a regular income for the rest of your life. They may be purchased with super or non-super money. Features of lifetime income streams include: 

  • A guaranteed income paid for the rest of your life. These payments can be level, indexed with inflation or indexed at a set rate each year; 
  • No access to your capital; 
  • No investment decisions to make; 
  • You may be able to receive a 15% tax rebate when purchased with superannuation money; 
  • You may be able to receive part of the payments tax-free.

Fixed Term Income Streams: 

Fixed term income streams provide you with an income for a specified term. The term can be any term up to your life expectancy, and may be purchased with super or non-super money. Features of fixed term income streams include: 

  • A guaranteed income paid for the fixed term. These payments can be level, indexed with inflation or indexed at a set rate each year; 
  • No access to your capital; 
  • No investment decisions to make; 
  • You may be able to receive a 15% tax rebate when purchased with superannuation money; 
  • You may be able to receive part of the payments tax-free. 

One point to note with fixed term income streams is that once the term expires you will no longer receive any income. 

You have the choice to purchase one of these income streams, or a variety of the income streams dependent upon your personal circumstances. Due to the complexities attached to these income streams, it is recommended that you discuss the options with your financial planner.

Contact Us for more information and to discuss the most suitable solution for your unique situation.

Gov’t benefits:

Government Benefits and Concessions

If your assets and income are under a specified level, you may also be eligible to receive a full or part Age Pension to help supplement your retirement income. In this section we will look at the eligibility conditions for receiving the Age Pension.

In order to receive the Age Pension you must be of Age Pension age. The age requirements are as follows: 

Male: You must be 65 or over 

Female: Age Pension age is dependent upon your date of birth. The qualifying ages are as follows: 


Date Of Birth Age Age
Before 1 July 1935 60
1 July 1935 to 31 December 1936 60.5
1 January 1937 to 30 June 1938 61
1 July 1938 to 31 December 1939 61.5
1 January 1940 to 30 June 1941 62
1 July 1941 to 31 December 1942 62.5
1 January 1943 to 30 June 1944 63
1 July 1944 to 31 December 1945 63.5
1 January 1945 to 30 June 1947 64
1 July 1947 to 31 December 1948 64.5
1 January 1949 and later 65

The amount of Age pension you receive is dependent on your family circumstances and on the level of your income and assets. If you are a couple, Centrelink will combine assets and income to determine if you are to receive a pension. The amounts of pension payable under the income test and assets test are compared. Whichever produces the lower result is what you will be paid. 

Income Test 

Income that the government will assess includes: 

Income from employment;

  • Money "deemed" to be earned from your financial investments (see below); 
  • Net income from business; 
  • Income from rental properties; 
  • Private trust distributions or dividends from private companies; 
  • Income from income streams 

Income from your financial investments is assessed under the deeming rules. This means that your financial investments are assumed to be earning a certain amount of income, regardless of the amount you actually receive from the investment. Financial investments can include bank accounts, managed investments, shares etc 

Assets Test

Basically, any asset that has a dollar value that you own will be counted as an asset. The main exception to this is your family home. Assets can include: 

  • Home contents; 
  • Cars; 
  • Investment properties; 
  • Capital value of investments; 
  • Money in the bank;

There are also a variety of concession cards available upon retirement. There are generally 3 types of concession cards available for retirees: 

Pensioner Concession Card 

To be eligible you must receive at least a part age pension from Centrelink or a service pension from the Department of Veterans Affairs. 

Commonwealth Seniors Health Card 

If you are not eligible for a Pensioner Concession Card then you may be eligible for this card. To be eligible, you must be age pension age, which is currently 65 for males and 62.5 for females, and have taxable income below $50,000 for singles, or $80,000 combined for couples. 

Seniors Card 

You can receive a State Seniors Card in addition to the Pensioner or Commonwealth Seniors Health Card. As State Governments provide these cards, eligibility differs by state. Generally, you are eligible if you are retired and aged 60 or over. There is no means test for State Seniors Cards. 

There are also a variety of other concessions that are available to retirees:

  • Health concessions
  • Transport concession
  • Household expenses
  • Payments from Centrelink or the Dept of Veterans Affairs 

Contact Us for more information and to discuss the most suitable solution for your unique situation.

Disclaimer - The information contained on this website is given in good faith and has been prepared from information believed to be accurate and reliable. This information is of a general nature only. Mortgage One and its related entities, nor any of their employees, officers or directors gives any warranty of accuracy or reliability nor accepts any responsibility arising in any other way including by reason of negligence for errors or omissions herein. All assumptions and examples are based on the continuance of present laws and Mortgage One’s interpretation of them. Mortgage One does not undertake to notify recipients of changes in the law or its interpretation. This guide is not designed to be a substitute for specific financial or investment advice or recommendations and should not be relied upon as such. Please contact us for advice on your specific needs


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