Should you include social security in your retirement plan?
Should you include social security in your retirement plan?
Whether or not you should include social security in your retirement plan depends on your individual financial situation and goals. Here are a few things to consider:
Eligibility: To receive social security benefits, you must be at least 66.5 years old, must be an Australian resident and be in Australia. You also need to meet the income and asset tests.
Amount of benefits: The amount of social security benefits you receive is based on your income and assets, so the amount may vary significantly from person to person. You can estimate your benefits using the MoneySmart calculator (https://moneysmart.gov.au/retirement-income/super-and-pension-age-calculator)
Role of your social security income: Social security benefits are generally intended to be a safety net from the Federal Government. However, many use this income to replace a portion of their income in retirement, but they may not be enough to cover all of your expenses. It's important to consider other sources of income, such as savings, investments, and superannuation, when planning for retirement.
Timing of benefits: You can choose to start receiving social security benefits as early as age 66.5, but the amount of your benefits will be based on your assets and income at this time.
The Age Pension is a means-tested government payment provided to eligible Australians who are of pension age. It is designed to help people meet their basic living costs in retirement.
The Age Pension can provide additional income in retirement, which can help reduce the amount you need to draw from your superannuation fund to meet your expenses. This can help your superannuation capital last longer.
Overall, it's important to carefully consider your individual financial situation and goals when deciding whether and when to include social security in your retirement plan. In addition, we need to understand that the Federal Government may change or alter the eligibility criteria for the Age Pension.
Furthermore, it may be helpful to work with a financial planner or advisor to create a retirement plan that is right for you.