Planning for retirement?
Can I draw a pension?
The age pension is paid to men who are 65 or older and women aged 63 and a half (as at July 2010). The qualifying age for women is being progressively raised, so that by 2014 the minimum qualifying age will be 65 for everyone. From 1 July 2017, the qualifying age will be progressively increased, so that by 1 July 2023, the age pension will be available only to those aged 67 and older.
Your right to a pension depends on either an income test or an assets test, whichever gives you the smallest pension; it also depends on a period of permanent residence in Australia. Your own home is not counted in the test and you may own assets up to a certain value before the pension is affected.
The age pension is taxable, but not if it is your only income. The income test may reduce your pension depending on how much you earn – from part-time jobs, for instance, or from investments. Pension rates vary for married and single people and are adjusted periodically to take account of inflation. Federal, State and local governments provide fringe benefits to pensioners. These include health benefits; reduced charges for rates, phones, gas and electricity, and car registration; and concession rates on public transport.
If your spouse is intellectually or physically disabled or seriously ill and you have to care for them at home, you may be eligible for a carer allowance.
Where should I live?
There are a number of options. You could continue to live in your present home while you can manage it, buy a smaller home – for instance, a unit – live in rented accommodation or move to a retirement village. Housing schemes exist to help people on a low income. These can provide low-rental accommodation, home renovation aid, rent relief or bond assistance, depending on your needs.
Other possibilities include granny flats (or dual occupancy) where a self-contained dwelling is added to an existing house or the existing house is converted into two dwellings.
If you have the funds for entry charges and ongoing expenses, a retirement village may provide the environment and support you want.
Your Solicitor can help by explaining the implications of the options and by advising you on the sale and purchase of property as well as carrying out any legal work involved in your change of home. For instance, some retirement villages have complicated rules and you will need legal assistance to understand them and your rights and obligations as a resident.
If you are thinking of a granny flat with family members, it is important to document the arrangements legally.
What will it cost me to live?
When you retire, your regular pay cheque stops coming but the bills do not. You will require at least enough income to pay for some of the following: food; clothing; rent; rates; household repairs and maintenance; phone; electricity/gas; car registration, insurance, repairs, maintenance and fuel; medical insurance; household insurance; and income tax. Your costs will vary depending on whether you live in the city or the country.
How should I manage my savings?
If you are not skilled in the art and science of financial investment, you will need advice. Financial advice is available from a variety of sources including accountants, stockbrokers, banks, building societies, trustee companies, and independent investment advisors. Always ask whether the advisor is receiving a commission if an investment is made. Your Solicitor can give you legal advice.
Social security disputes?
If you do not agree with a decision made by Centrelink – for instance, if it withholds a pension or benefit from you – you are entitled to seek a review of the decision. If you are not satisfied with the result of the review, you may appeal against it.
You can appeal to the Social Security Appeals Tribunal and, if you are not satisfied with its decision, seek a review by the Administrative Appeals Tribunal.
Your Solicitor will be able to advise you how to go about appealing to the Tribunals and may represent you if you wish or assist you to make a written submission of your case.
How can I best provide for my partner?
You should consider making your bank accounts joint ones so that if you die your partner will have continuing access to money. Similarly, assets such as shares and other investments and real estate can be in joint names so that the surviving partner becomes the sole owner.
If property (primary residence, holiday home or investment property) is held in joint tenancy, when one partner dies, the survivor automatically takes title to the property subject to completing the necessary legal formalities. Otherwise, transfer of the deceased person's property or shares will depend on the terms of their will. Your Solicitor can advise and assist you to arrange your assets and affairs so that your partner will be properly provided for after you die.
Should I give someone a power of attorney, or appoint an enduring guardian?
Giving another person a power of attorney means you authorise that person to take over the management of your financial affairs and act on your behalf. Depending on your needs, this may be a good idea, and your Solicitor can advise you on the appropriate procedure. You may give a general power of attorney which will come into operation when something particular happens – for instance if you were to become incapacitated. Or you may give a specific power of attorney for a particular purpose – for instance, for the handling of particular financial affairs only – or for a particular period of time, while you are overseas, for example.
Generally speaking, you can revoke a power of attorney at any time. In some cases the power of attorney is not revocable – for example, if it is an "enduring" power of attorney and you have become mentally incapacitated.
You may also consider the appointment of an enduring guardian who you authorise to make health and lifestyle decisions for you when you are no longer capable.
Your Solicitor can advise you about how to draw up a power of attorney and the need for care in granting it to ensure that your interests are properly protected.
Should I make a will?
You should make a will if you want to ensure that after you die your possessions and property are distributed in the way you want. If you do not make a will you may die "intestate" and your assets will be divided and distributed according to State laws. This could mean that the people who benefit from your estate may not be those you would have chosen. An unfair result may occur which you never intended.
If you have no direct relatives your assets may pass to the Crown. A Solicitor can help you draw up a will to ensure your wishes will be complied with after you die.
How can a solicitor help me?
Your solicitor can:
- Advise you on, draw up and supervise the proper execution of your will;
- Arrange your property affairs for maximum security;
- Give you independent legal advice;
- Advise on trusts and estate planning and set up a trust fund if necessary;
- Advise on gifts and other transfers of assets;
- Advise on, draw up and supervise the proper execution of a power of attorney;
- Advise on and supervise the appointment of an enduring guardian.
Useful link
A useful website for information and services provided for people planning retirement is a
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