These days, people are living longer than the previous generation, and are using part-time jobs to help ease themselves into retirement period.
There are many benefits of having part-time work and how you can use super to facilitate the transition, and the impact for your age pension if you are still working when you reach the threshold of age pension.
Benefits of part-time work
After spending many years of working full-time, retiring from the workforce can be a jarring shift in your life. However, you should know that it’s not an all or nothing scenario for you. More and more Aussies are making the choice to go into semi-retirement by moving to part-time work before they fully retire.
Some of the benefits that you can enjoy are:
Because you are still earning an income, you won’t have to dip your hands into you super, if at all, so it will continue growing.
Structure and purpose
Working part-time, for a lot of people, is a great way to keep your mind engaged. Work can provide your life with structure and purpose and keeps you active, mentally, physically and emotionally.
Development of other interests
People plan when they want to retire but many neglect to plan what they will do when they are finally retired. Holding off on retiring gives you an opportunity to develop interests and hobbies outside of work.
Not having to wait until Age pension age
If you are not yet eligible for the Age pension, working part-time gives you the chance to experience semi-retirement but still rake in some money.
If you are aged 55 or over, you may be able to make use of a transition to retirement strategy. This allows you to increase your pay with a draw down from your super, if you need to, after you have reached preservation age. You don’t pay tax on your super income from age 60 and your employer would continue to top up your super.
Part-time work and the Age pension
If you are still working when you do reach age pension age, your income may lessen the amount of age pension you are entitled to. Singles can earn $164 per fortnight before their age pension reduces.
It will drop by 50 cents for every $1 you earn over $164. Couples who are both eligible for the age pension can earn $292 a fortnight (combined) without affecting their age pension. It will also drop by 50 cents for every dollar of income over this limit.
Part-time work is a great way to add a little more money to your age pension. To know more regarding your situation, you can consult with Centrelink.
Money can be very hard to come by. But one of the best ways to make sure that you have some when you need it is to take on some extra work. Here are your best options at getting some extra work and some extra cash in your pockets.