Author: Sean Osborne
You CAN retire before age 70, despite what some reports are suggesting.
You may have recently heard that the government are proposing in the forth coming budget in May to increase the age pension to 70. There has been a lot of confusion around this as I have heard on various radio stations and TV commentary that the government are looking to increase the “retirement age” this is not the case the retirement age can be when ever you wish, they are not changing the age you can access your super, which again I have heard statements to this effect.
What they are actually proposing is to increase the age that you may be entitled to claim a “Centrelink age pension” to 70.
Some of you may be aware that already from 2017 the age which you can apply for Centrelink pension will already be gradually increasing from 65 to 67.
I believe this is a long overdue change as the age pension is just not a sustainable vehicle under its current format. When the age pension was first introduced in 1909 by the Commonwealth Government the average life expectancy for an Australian Male was 58, so very few actually got to 65 to claim this benefit. However today, we can expect on average to live to age 85 so we are being paid the age pension for 20 years, which can only be funded by taxpayers. Of which as a ratio of people in the work force versus people in retirement has halved in 2 generations.
So this change doesn’t effect the age you can retire or the age you can gain access to your super, it’s the age of which you can apply for the “Centrelink age pension”.
Sean Osborne blogs about financial advice and the financial planning profession.