👵Pension Calculator

Navigating the Assets and Income Tests

Eligibility for the Australian Age Pension is determined by two tests: whichever results in the *lower* payment is the one applied. The Assets Test includes your investments but excludes your principal home. The Income Test considers your earnings and 'deems' income from financial assets. Using this calculator helps you identify if you are over the thresholds, allowing you to plan strategies like 'gifting' or home improvements to improve your pension outcome within Services Australia rules.

Services Australia – Age Pension

Deeming Rates and Financial Assets

Services Australia uses 'deeming' to estimate income from financial assets (bank accounts, shares, Super in pension phase) regardless of what they actually earn. Deeming rates are set by the government and can change. This tool applies the latest deeming tiers, helping you see how your investment choices impact your pension payments. Understanding these rates is essential for Australian retirees balancing private income with government support.

Department of Social Services

Transition to Retirement (TTR) Strategies

In Australia, once you reach preservation age, you can access part of your Super while still working via a TTR pension. This can have significant tax advantages and help 'bridge the gap' until you reach the full Age Pension age (67). Use our calculator to simulate how starting a TTR pension affects your long-term wealth and your eventual eligibility for the full government pension.

ASIC Moneysmart – TTR

What is the full Age Pension amount in Australia?

As of early 2024, the maximum fortnightly rate for a single person is approximately $1,096.70 (including supplements), and for a couple, it is $1,653.40. These rates are adjusted in March and September each year in line with inflation and wage growth. This tool helps you stay updated with the latest rates to ensure your retirement budget is accurate.

Does my family home count towards the pension test?

No, your principal place of residence is generally exempt from the Assets Test in Australia, no matter its value. However, being a homeowner or a non-homeowner changes the lower and upper asset thresholds for the test. Our calculator asks for your housing status to apply the correct Australian legislative limits to your eligibility check.

Can I work and still receive the Age Pension?

Yes, thanks to the 'Work Bonus' scheme in Australia. The first few hundred dollars of fortnightly employment income are not counted under the Income Test. Additionally, any unused portion of the Work Bonus can be 'banked' up to a limit. Use this tool to see how much you can earn from a part-time job without reducing your pension payments, a common question for active Australian seniors.

Start Early

The power of compound interest means starting early can dramatically increase your pension pot. Every year counts.

Maximize Employer Contributions

Contribute at least enough to get your full employer match - it is essentially free money. Many employers match contributions up to 5-6%.

Increase Contributions with Raises

When you get a raise, consider putting half of it into your pension. You will not miss money you never got used to having.

Annual Reviews

Review your pension annually. Check fees, performance, and whether your allocation still matches your risk tolerance and timeline.

Income Replacement: 70-80%

Most experts recommend replacing 70-80% of pre-retirement income. You will have fewer expenses (no pension contributions, mortgage potentially paid off), but may have higher healthcare costs.

The 4% Rule

A common guideline is that you can safely withdraw 4% of your pension annually. This means you need 25x your annual retirement expenses saved.

Asset Allocation by Age

A common rule: subtract your age from 110 to get the percentage in stocks. At 30, that is 80% stocks, 20% bonds. At 60, it would be 50% stocks, 50% bonds.

How much should I contribute?

A good rule is to contribute 12-15% of your income (including employer contributions). At minimum, contribute enough to get your full employer match.

What if I start late?

It is never too late to start. Contribute more aggressively, consider delaying retirement by a few years, and consider part-time income in retirement to make up the gap.

What return rate should I use?

For long-term planning, 6-7% is a realistic estimate after inflation for a diversified stock/bond portfolio. Be conservative - better to have a pleasant surprise than fall short.