What the Age Pension age increase means for you
The Federal Treasurer has made it clear: the Age Pension age is increasing to 70 years from 2035. Presumably, the detail associated with this well-heralded news will be known when Joe Hockey releases the 2014 Federal Budget on 13 May 2014. Whatever the outcome, I am guessing that many of are worried about the implications of an increased Age Pension age for your retirement planning.
Currently, anyone born before July 1952 has an Age Pension age of 65 years, while anyone born after December 1956 has an Age Pension age of 67 years. If you were born between those dates then your Age Pension age can be 65.5, 66, or 66.5 years.
In May 2014, the Government announced that anyone born after 1965 will have an Age Pension age of 70 years..
If you’re not planning to claim the Age Pension when you retire, then the increase in the Age Pension is irrelevant because you will be living off your superannuation assets and your non-superannuation savings. If you plan not to have to rely on the Age Pension, then your retirement date is not affected by any increase in the Age Pension age.
Age Pension age is different to your preservation age: Note that an increase in the Age Pension age has no impact on the age that you can access your super benefits. You can access your super benefits when you have reached your preservation age and retired, or satisfied another condition of release such as turning 65, or starting a transition-to-retirement pension. Preservation age is currently age 55 but increases gradually to age 60 for anyone born after June 1964. To discuss and assist you further on your transition to retirement, please contact Aspire Planning Group on 9480 4500 to arrange an appointment.