Skip to main content

How to boost your pension by 50%

Image
By
People in the superannuation industry will say you need millions to retire. But it doesn't have to be that way.

The Barefoot method

If you've got millions in retirement good for you. But if not there's another way as outlined in book the Barefoot Investor. It's quite an effective strategy especially for those of who have had low income, variable income, or who are retiring early.

The idea is, by 67, to get your superannuation balance close to the maximum you can have before it starts reducing your pension.

Assuming you don't have other significant investments, at this point you can get the full age pension, plus some handy superannuation income. (Barefoot Investor also suggests some very-part-time work to boost it even more.)

How much are we talking?

Depending on your situation, you could get 50% more than the age pension.

For instance (as of June 2020) a single homeowner gets $22,375 age pension. At 67 a super balance of $225,000 would provide additional income of $11,250.

Likewise a couple who don't own a home get a $33,732 age pension. At 67 a super balance of $400,000 would provide additional income of $20,000.

As far as I understand it, all of this is tax-free (but I'm not a tax expert).

***Edit***

This is the part of the post where I previously had a calculator. The idea was that you could work out if this could be a possibility for you.

Realistically I'm not going to be able to update it each year as the government thresholds change, so I've removed the calculator.

Also, most people who tried it found out they would be way over the threshold. This should be great news (having lots of money in retirement). But some felt disappointment that they couldn't get  the boost. Even though their retirement scenario would be far better than someone who could benefit.

For all these reasons, I've removed the calculator link. If you want to know more I recommend borrowing the Barefoot Investor book from the library.

Big disclaimer

This is a summary of something I read in the Barefoot Investor book, accompanied by some maths. It is not financial advice, and does not take into account your individual situation. Please evaluate you own circumstances and seek your own financial advice.
Read more about:

Comments

Post a Comment

Popular posts from this blog

Big motivator for small living

By
It's been a while between posts here - mainly because we've been moving house. It's been a real motivator for downsizing. Packing each and every item we owned, really makes me wish there were fewer of them. Moving everything from the old apartment to the new one made me envious of those people who live in a "tiny house on wheels". For them moving house simply means towing it to a new location. No packing required. The whole process has reaffirmed our commitment to owning less stuff. So we're going to be intentional about downsizing. It will be an ongoing activity. My environmental heart couldn't stomach a spontaneous dumping of things into the garbage, but it's also more fun this way. Selling things online brings in some handy pocket money. Giving items away is also a great community activity, whether it is to friends and family, to charity or to people in the neighbourhood. I'm looking forward to it as a lifestyle rather than a task to do....
Post a Comment
Read more

Top 5 articles of 2019

By
As we wrap up 2019, here are the most-read posts here on But Wait There's Less . 5. Books. Do we need them anymore? Why do we keep books? To read them again? How many do we ever read a second time? I worked it out .For me not many. This lead to a second post on my technique for streamlining my book collection . 4. Living in a converted barn. This was something my wife and I tried on a trip away this year. Check out the pictures . I still reckon it could be possible long-term. We really don't need as much space as we have. 3. What's your retirement age? It's not 67. At least it doesn't have to be. If we spend less, compulsory work can become optional at a very early age . It could even be in your 30s. 2. The automatic guest room On the same trip as number 4, we stayed with a friend who (with some clever furniture ) converts her living room into another bedroom. It's a clever way to be able to have guests, but without paying a heap of money for a bigge...
Post a Comment
Read more

Man Down

By
How is it possible for a book to be depressing, supportive and hopeful all at once? Man Down looks at the problems men have today and how it managed to get this way. What price 'success'? It seems so many of the problems come from the external pressure to be a 'success' - whatever that means. Over time this pressure becomes internal and drives us to make decisions to satisfy that pressure, but which are detrimental in so many other ways. It can be the pressure to take a 'successful' career, though it's one we don't want or aren't suited for. Or to take a promotion, because salary is apparently success - or at least it buys all the things that signal success to others.  The promotion only means more pressure, less sleep, and poorer health. At the same time the extra responsibility takes away from our ability to exercise, take care of our health and form social connections. The lack of social connections means that retiring is one of the most dangerou...
Post a Comment
Read more