Tips to make the most of your pension

When you buy a Mine Wealth + Wellbeing Pension, you’ll receive a regular pension payment until your money runs out. When this happens depends on several factors.

How much money you start with

If you still have time before you retire, it pays to boost your super as much as possible. If you’ve already retired make sure you roll in all the money you want to invest when you start your pension, as you can’t add more money once you’re invested.

How you invest your money

How much of your pension you invest in growth or defensive assets can have a large impact on how long your money lasts. Remember, you may spend up to 30 years or longer in retirement, so invest appropriately.

The chart below shows that an extra 2% return per year can make your money last two years longer.

Assumption:Investor puts $450,000 in an account-based pension at age 65 and draws down $40,000 pa in income payments. Source: MoneySmart Retirement calculator

Your regular pension payment amount

The higher your pension payment amount, the faster your money will run out. If you’re concerned that your money may not last, consider lowering your payment amount. If you run short of cash for an emergency you can make a lump sum withdrawal at any time.

In the end, the lifestyle you choose will have more impact on how long your money lasts in retirement than how much you retire with. Regular overseas holidays will require more money than spending time in the garden and with your family. While it can be hard to work out how much money you'll need, it's important to have some idea so you live within your means.

Whether you take out any lump sums

A simple way to make your money last longer is to watch your spending.

Whether you take full advantage of your entitlements

Even if you don't get the age pension, you may be eligible for other benefits, such as travel concessions, cheaper medicines and reduced council and water rates.

Whether you go back to work

More and more retirees are boosting their retirement savings by returning to work*. In 2012-13 there were 191,200 people aged 45 years and over who had returned to work after retiring or were planning to do so. While the most common reason for people returning to work is financial, 30% were bored and needed something to do, while others came across an interesting opportunity. 

If you're in the position to find a suitable job, not only will you be able to save extra for retirement by returning to work, even part-time, you also won’t have to draw down as much from your retirement savings. This can have a large impact on how long your money lasts.

*Australian Bureau of Statistics; 2012-13 Retirement and Retirement Intentions