How Superannuation Affects the Age Pension in Australia

Planning for retirement involves understanding various aspects of your financial life, one of which is how superannuation interacts with the Age Pension.

Understanding Superannuation and the Age Pension

Superannuation, or ‘super’, is a long-term savings scheme designed to provide income for your retirement. The funds come from contributions made by your employer and, ideally, your own contributions as well.

On the other hand, the Age Pension is a government income support payment provided to older Australians who meet age and income requirements. It’s designed to provide a safety net for individuals who do not have a sufficient superannuation balance upon retirement.

How Superannuation Affects the Age Pension

Your superannuation balance can affect your eligibility for the Age Pension and the rate at which you receive it. This is because your super balance is considered when Centrelink conducts its income and assets tests. These tests determine your eligibility for the Age Pension and other benefits.

While your super is in the accumulation phase (before you retire), it’s not counted under these tests. However, once you reach Age Pension age and start drawing an income from your super, it’s considered under both the income and assets tests.

The Role of a Financial Adviser

Navigating the complexities of superannuation and the Age Pension can be challenging. That’s where a financial adviser comes in. A financial adviser can provide valuable guidance, helping you understand the rules and regulations around superannuation and the Age Pension, and ensuring your wealth is distributed according to your wishes.

At Willow Wealth Partners, we’re committed to providing personalised financial advice tailored to your unique situation. Our team of experienced advisors can help you understand how superannuation affects the Age Pension and guide you towards a secure financial future.

Book in a Complimentary 30-Minute Meeting Today

Ready to take control of your super? Book a complimentary 30-minute meeting with one of our Financial Advisers today. We’re here to help you understand your super and plan for a comfortable retirement.

Please note that this article is intended to provide general information only and does not take into account your individual objectives, financial situation or needs. You should assess whether the information is appropriate for you and seek professional advice before making any investment decision.

This information is true and correct as of 1 July 2024, prior to making any changes we recommend you read Government resources and seek Financial Advice prior to making any changes.