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Do you have any tips for surviving on aged pension?

Q. “Have you got any tips about surviving on the age pension and still maintaining some quality of life?”
Magda

Answer

Hi Magda and thanks for your question, and what a tough one it is!

The age pension is designed as a safety net for people aged 65 and over and the benefit is subject to means testing. If you have few assets and low income, you may be eligible for the maximum payment which is roughly $20,000pa for a single person and about $30,000 pa for a couple. If you are renting you may get additional payments via Rent Assistance.

So, the income is pretty low but there are a few things that can be done to make life a little easier:

  1. Know where your money’s going – write down what you spend for a few weeks so you can accurately track your spending habits; you might see a pattern emerge.
  2. Write a budget or “spending plan” – It will be easy to make clear and sensible choices if you have a realistic notion of what you currently spend (see pt 1). For example, it might surprise you how much you spend on pets or grandchildren and this is something you might wish to address.
  3. Put money aside for big, lumpy bills – Some people use the envelope system, others pay bills on a regular basis. The point is it’s often easier to find $40pf for a bill rather than $1040 at the end of the year. If bills are smoothed out during the year it reduces stress and makes it easier to manage.
  4. Check bank account fees – No one should be paying bank fees and if you are, look around for a better deal.
  5. Don’t waste anything – Reuse, reduce, recycle. This is great for the environment and also great for the hip pocket.
  6. Go op-shopping – This might not be for everyone but bargains can be found if you know where to look.
  7. Plan ahead – With a little bit of planning and some research you can save quite a bit on large purchases. Every year there are sales (eg Boxing Day) so why not wait til the big sales come along to buy those new towels or presents for the family.
  8. Plan your meals and make a shopping list – using a shopping list can save money and stop you buying things you don’t need. Never shop on an empty stomach either.
  9. Grow your own veggies – who doesn’t want fresh, flavourful, seasonal vegetables that cost next to nothing? If you are really good at it, maybe you can sell them or trade them for other items
  10. Entertainment – look out for free stuff and start filling your diary with great activities such as going to galleries, museums, markets, festivals, concerts. Invest in the Entertainment Book and use the discount coupons to save even more.
  11. Use the concession card – recipients of social security benefits are eligible for a concession card which some value at around $2000 pa (or more) depending on your situation. Card holders are often eligible for discounts on medication and medical expenses; reduction on property and water rates; reduction on energy bills, reduced public transport etc.

I hope these tips help and good luck!

Author: Anne Graham

Anne Graham is a CFP® CPA Authorised Representative of Securitor Financial Group (AFSL 240687). 

This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, we recommend you consider, with or without the assistance of a financial adviser, whether the information is appropriate in light of your particular needs and circumstances.

 

Q. “Have you got any tips about surviving on the age pension and still maintaining some quality of life?”
Magda

Answer

Hi Magda and thanks for your question, and what a tough one it is!

The age pension is designed as a safety net for people aged 65 and over and the benefit is subject to means testing. If you have few assets and low income, you may be eligible for the maximum payment which is roughly $20,000pa for a single person and about $30,000 pa for a couple. If you are renting you may get additional payments via Rent Assistance.

So, the income is pretty low but there are a few things that can be done to make life a little easier:

  1. Know where your money’s going – write down what you spend for a few weeks so you can accurately track your spending habits; you might see a pattern emerge.
  2. Write a budget or “spending plan” – It will be easy to make clear and sensible choices if you have a realistic notion of what you currently spend (see pt 1). For example, it might surprise you how much you spend on pets or grandchildren and this is something you might wish to address.
  3. Put money aside for big, lumpy bills – Some people use the envelope system, others pay bills on a regular basis. The point is it’s often easier to find $40pf for a bill rather than $1040 at the end of the year. If bills are smoothed out during the year it reduces stress and makes it easier to manage.
  4. Check bank account fees – No one should be paying bank fees and if you are, look around for a better deal.
  5. Don’t waste anything – Reuse, reduce, recycle. This is great for the environment and also great for the hip pocket.
  6. Go op-shopping – This might not be for everyone but bargains can be found if you know where to look.
  7. Plan ahead – With a little bit of planning and some research you can save quite a bit on large purchases. Every year there are sales (eg Boxing Day) so why not wait til the big sales come along to buy those new towels or presents for the family.
  8. Plan your meals and make a shopping list – using a shopping list can save money and stop you buying things you don’t need. Never shop on an empty stomach either.
  9. Grow your own veggies – who doesn’t want fresh, flavourful, seasonal vegetables that cost next to nothing? If you are really good at it, maybe you can sell them or trade them for other items
  10. Entertainment – look out for free stuff and start filling your diary with great activities such as going to galleries, museums, markets, festivals, concerts. Invest in the Entertainment Book and use the discount coupons to save even more.
  11. Use the concession card – recipients of social security benefits are eligible for a concession card which some value at around $2000 pa (or more) depending on your situation. Card holders are often eligible for discounts on medication and medical expenses; reduction on property and water rates; reduction on energy bills, reduced public transport etc.

I hope these tips help and good luck!

Author: Anne Graham

Anne Graham is a CFP® CPA Authorised Representative of Securitor Financial Group (AFSL 240687). 

This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, we recommend you consider, with or without the assistance of a financial adviser, whether the information is appropriate in light of your particular needs and circumstances.