Mixing work and retirement

With the right advice behind them, retirees can easily re-enter the workforce without jeopardising their pension benefits, Mark Teale writes.  

The terms “work” and “retirement” at first appear to be at the opposing extremes of the spectrum, but for a portion of the population this is certainly not the case. 

Work does a couple of very important things outside providing a person with an income so that they can survive on a weekly basis. Work allows a person to continue to contribute to society, allows them to mix and broaden their social circle and also provides purpose and self-respect - these benefits also contribute to a longer and more importantly healthier life. 

Retiring into an existence where he or she does not have enough funds to travel the world, eat out and play golf four days a week (if so inclined) and where the only entertainment is the walk to the shop to purchase the paper and buy a coffee will lose its attraction very quickly. 

It’s important to remember that the work a person does in retirement does not need to be a continuation of their previous working career. 

You don’t need to build a new career, just contributing and picking up some extra cash might be all that’s required. So what might appear to be a menial job such as shelf packing, stop/go sign operators, headstone restorer or even a barista should never been seen as being beneath a person’s abilities, the reason a person is working now is entirely different to the reason a person worked pre-retirement. 

For the part age pensioner, the extra reason to find work is the generous income test which applies to their earned income. 

The “work bonus” not only allows them to earn $250 over a 14 day period without any effect on their age pension, it also allows them to build a bank of $6,500 in credit which equates to $250 multiplied by 26 fortnights. 

So what this means, is that for the Age Pensioner who enjoys playing Santa Claus every Christmas in the local shopping mall and, depending on how much Santa is paid, they could work every year during this period pick up some extra cash and not have their pension affected. 

But like all government legislation, it does not come without some pitfalls. For example, if you earned $500 over a five day period instead of a 14 day period, the amount of income taken into account for the fortnight would not be $250 but $410.  

Complicated and difficult to understand? Without a doubt, 'yes’, but that is why we are advisers so that we can steer people in the right direction. 

The prior Pension Bonus Scheme which provided a lump sum payment to people who deferred their application for age pension for a maximum of five years while working, was closed to new registration on 1 July 2014. 

As advisers who deal with baby boomers who may not have enough funds to provide the income they require, or want the option of providing advice on work options, this should be one that we are prepared to undertake and add to our list of services. 

I believe that more and more baby boomers not only realise that they have to work past 65 but that they want to. 

I am not saying that we need to become employment agencies, but I do believe we should develop the necessary relationships and contacts that can assist people in not only finding employment but also the required training courses to achieve employment. 

To be truly classified as an adviser specialising in 'retirement coaching’, I do not believe it is an area we should not ignore when we are talking to our pre-retirees or our retiree clients. 

Mark Teale is Manager - Technical Advice at Centrepoint Alliance. 

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