Retirement should be a time of celebration when you finish working and are ready to enjoy the rewards of your years of effort. Unfortunately, for some seniors, the income provided by the age pension and their savings may not be enough to live a comfortable lifestyle. As a result, seniors may have to look for other methods of making income through retirement.
The Australian Superannuation Fund Association (ASFA) has determined that the amount of money a single person aged 65-84 needs to live comfortably in retirement has risen to around $48,266 a year. Couples, on the other hand, will now need a combined annual income of $68,014. These figures can help people identify potential income gaps before or during retirement.
For retirees, having an additional income is essential to enjoy a comfortable lifestyle. Finding ways to increase their income can be difficult, but some creative solutions exist. Looking for avenues to increase your income can be a great way to ensure your retirement years are enjoyable.
Generating Income Through Retirement
Engaging in Part-Time Work
Staying in the workforce for longer can help preserve your superannuation funds, allowing them to last longer or giving you a greater income level when you retire permanently.
Many older Australians continue to work past the traditional retirement age, with over 600,000 retirees still in the workforce. Figures from the Australian Government show that 61% are men and 39% are women, making it increasingly common for retirees to remain in the labour force.
Take caution, however. Returning to work during retirement can be a great idea if you’re looking for extra income, but it could affect your pension payments if you rely on them as a major source of income.
If you are receiving an age pension, it is a good idea to speak with Services Australia about how any income you get from working could affect your eligibility for the pension. The Work Bonus could reduce the amount of money factored into the income test when determining your age pension.
Start a Side Hustle or a Small Business
Whether you’re looking for something to fill your time or you decided to take the plunge, you must take your time when you’re making the decision. You don’t want to jump into anything unprepared since this is more than likely your second career.
The most important thing is that you have an idea of what you want to do. This doesn’t have to be a grand idea, but it should be something you are interested in. If you are unsure what you want to do, you can always experiment with different things.
You might feel like you don’t have the money to start your own business, but let us consider the option of doing it on the cheap. Start with the goal of creating a business on a budget, possibly on a very small scale. Look at the marketplace and try to find out what you can sell that is in demand. You can always invest more later on. Alternatively, you can seek out government grants to apply for that could help to fund your start-up.
Apart from deciding which business you would like to create, you will also need to educate yourself on how to start a small business successfully. Talk to other small business owners about their journey, take an online course, and seek out the advice of a Small Business Support Centre.
Maximising Superannuation and Other Investments
Once you finish working, making smart decisions with your investments is important to get the most out of your retirement income.
An account-based pension is an option available to those who have reached retirement age. It allows you to withdraw money from your super fund while keeping most of the balance invested. This can be a good way to manage your finances, as most super funds provide an income stream product giving you the flexibility to take out money regularly, and the tax effects can be quite beneficial.
You can use the money you have saved outside of superannuation to invest in various investment vehicles that can help to increase your retirement income. These investments can range from more secure options like term deposits and fixed-income managed funds to more volatile options such as shares and exchange-traded funds.
It’s important to consider all the factors that go into retirement income planning and investment choices. Professional financial advice can help you understand what options are available and which ones are best for your particular situation. It’s important to consider your retirement financial planning objectives, risk profile and needs when investing as a retiree.
Maximise Your Income Through Retirement with CCFPG
Talking to a specialist retirement financial adviser regarding retirement matters is always best to determine the best course of action. Not only will this help you gain confidence about the future ahead and the life you can create for yourself in retirement, but it also presents the most viable options to keep your income streams active while enjoying your retirement benefits.
Central Coast Financial Planning Group’s strategies for retirement financial planning will help you achieve your goals for success and security. Call us or book online to secure your complimentary first meeting with our advice team today!
DISCLAIMER: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Sydney Wealth Advisers, Coastal Advice Port Macquarie and Coastal Advice Ballina Byron are subsidiaries of Coastal Advice Group Pty Ltd which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.