Pension

[ria]

Hi Everyone,

We are very concerned that we won't be able to collect enough pension for retirement. We are both 40 this year so that roughly leaves us with 25 years. I know about the 9% super and salary sacrifice, but still would like to know how the payouts work. Is there a minimum amount that everyone gets from the state at a certain age even if your contribution was less? How does the state determine who gets how much? Please advise.

Kind regards,

Ria

[woodag]

The good news is that if you are a citizen or have PR you will be eligible for the “age pension” and perhaps other benefits, even if you have never worked. (For a start see http://www.centrelink.gov.au/internet/inte...age_pension.htm )

The bad news is that the benefits available are not huge and are subject to certain conditions that prevent “well off” people from claiming them (look for info on “asset test” and “income test”). Also, nobody really knows what the rules will be in 25 years – concerns have been expressed that benefits will have to reduce due to the “ageing population”.

I would be putting as much as I could into superannuation. 25 years is long time and you could build up considerable assets. The usual disclaimer applies however - “speak to your financial advisor”.

[ExASP]

Also they changed the tax laws on super...you dont get taxed on your super payouts anymore...however who knows what the rules will be in 25 years like Woodaq says...