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Age Pension increases … but is it enough?

Five million Australians have just pocketed their biggest pay increase in seven years. Age pensions and other social security payments are increased twice a year. From 20 September 2021, the maximum single age pension rate will rise by $14.80 to $967.50 a fortnight. Age pensioner couples will receive an extra $22.40 combined, taking their fortnightly payment to $1,458.60.

These are the biggest increases we had in a while but let’s be honest – these are not glamorous incomes.

How does the age pension compare with recognised benchmarks of what pensioners actually spend?

ASFA publish by retirement expenses for a modest and comfortable lifestyle for 67 year olds. It assumes they own their own home and have no debts. You can read more about what is included here.

Single

Age Pension

(inc. supplements)

ASFA

Modest Lifestyle

ASFA

Comfortable Lifestyle

$25,155

$28,514

$44,818

 

Couple

Age Pension

(inc. supplements)

ASFA

Modest Lifestyle

ASFA

Comfortable Lifestyle

$37,923

$41,170

$59,286


The full age pension for a single person covers just 88% of the ASFA modest lifestyle. Or just 56% of what is considered a comfortable lifestyle.

In other words, if the pension was paid as an annual payment on 1 January, a modest budget would see the money spent by 28th November.  Hmmm. How do you think this would work for you?

Author
Director | Certified Financial Planner ® | B.Ec, Grad Dip FP | Authorised Representative No. 227293

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