With many of us falling short of having enough to retire on, compulsory super isn’t cutting it. For baby boomers, adding personal super contributions will see many still fall short. That’s because compulsory super wasn’t around for those looking to retire now.
But did you know that you can actually still work during retirement and earn an income? Working in retirement is a great option for supplementing income. There are several benefits in working part-time in retirement. But, doing your research in the first place is a must. Here’s a guide to help you work out what the best options are for you.
Nowadays, many retirees self-fund their retirement. This means that fewer people depend on the aged pension and government subsidies. Compulsory super didn’t start until 1992, thus many people can’t rely on their super alone. As a result, people have to make serious decisions about their sources of income.
You can reduce your superannuation withdrawals by remaining at work. This is because you’ll have a work income and won’t need to draw down on your super. This gives your superannuation the opportunity to continue to grow. This is a great option for those able to remain in employment. It’s becoming more common nowadays for people to work longer if they’re able to do so.
Furthermore, staying in the workforce keeps your mind active. It also gets you out and about so that you can remain socially engaged in the workplace. For some, it’s appealing to take on a new direction of employment and meet new people. This allows people to pursue something that they’ve never thought of or always dreamed of doing.
Those who need to work in retirement should consider how this will impact on their super. They should also consider how it’ll impact government benefits. This includes the Centrelink aged pension.If you’ve retired and you’re in receipt of a full-aged pension, you’re still able to work in paid employment. But you’re only able to earn a small income each fortnight. Otherwise, your earnings will impact your entitlements. At the moment it’s around $300 per fortnight, but this figure is an estimate and is subject to change. So, don’t jump the gun. For further details about exact earning amounts, check-in with Services Australia. For some, earning more from employment is worth it. It’s worth it for some people even if it reduces the amount of pension they can receive.
Additionally, working part-time could allow retirees to put extra earnings into their superannuation. If you’ve reached the preservation age and you’re under 75, it’s good news for you. But, you’ll still need to meet the work test to be eligible to make contributions and still claim a tax deduction. Even better news if you’re still employed. Your employer will still make compulsory super contributions on your behalf too.
Seeking financial advice along with early retirement planning is a great option. It’ll enable you to make the decisions that are right for you when balancing retirement and income. Do you have more questions about earning, accessing super, and government benefits? For further information, you can contact Services Australia.
Join our network and receive exclusive offers, the latest eNews and retirement eGuides.