Should I work part time in retirement?
<p>The switch to retired life can be difficult, and an increasing number of Australians are picking up part time work as a means of easing this transition. Resources like <a href="http://www.equipsuper.com.au/seminars" target="_blank"><em><strong><span style="text-decoration: underline;">Equip’s free retirement lifestyle seminars</span></strong></em></a> are a helpful way of getting your head around this at times confusing process.</p>
<p>We’ve taken a look at the Australians who have been working part time in retirement, the benefits of this process, tax incentives that are freely available and the implications it has for your finances.</p>
<p>Queensland University personal finance expert Noel Whittaker notes that working in retirement is, “Extremely good for your health and your finances – the downside is that if you are income tested for age pension purposed you lost fifty cents for every dollar earned. However, thanks to the work bonus scheme the first $250 a fortnight you earn are exempt from the income test.”</p>
<p><strong>Benefits</strong></p>
<p>Making the transition to retirement is a major life change, particularly if you’re used to working full-time as you probably have been for many years. As Equip financial planner <a href="https://vimeo.com/138805727" target="_blank"><em><strong><span style="text-decoration: underline;">Jason Cook notes in his conversation with Kim Watkins</span></strong></em></a>, many soon-to-be-retirees are concerned about losing the benefits of being in the workforce including the friendships they share and the sense of identity it provides.</p>
<p>Retaining a degree of part time employment is the perfect way to ease your way into this phase of your life. If you’re working you won’t need to draw as much from your super (even at all) and there’s the potential for it to continue to grow. Many people want to retire but haven’t planned properly, and working part-time gives you chance to develop some interests and hobbies outside of work.</p>
<p>The Australian Government has a useful <a href="https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/career-break-super-calculator#/calculator/careerbreak/section1/aboutyou" target="_blank"><em><strong><span style="text-decoration: underline;">Career Break Super Calculator</span></strong></em></a>, so you can get an idea as to how part time work will affect your super. To <em><strong><a href="https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/career-break-super-calculator#/calculator/careerbreak/section1/aboutyou" target="_blank"><span style="text-decoration: underline;">access the calculator click here</span>.</a></strong></em></p>
<p><strong>Tax incentives</strong></p>
<p>People aged 55 and over may be eligible for a retirement transition strategy. If you’ve taken up part time work and you qualify for this strategy your super balance will keep growing as your employer makes contributions to your account, and these contributions are likely to be taxed lower than your marginal tax rates. And once you’ve turned 60 you won’t pay any tax on your pension earned. You may also qualify for the <a href="http://www.equipsuper.com.au/pages/transition-to-retirement-pension" target="_blank"><em><span style="text-decoration: underline;"><strong>Equip Transition to Retirement Pension</strong></span></em></a>, which allows you to draw an income from super once you pass superannuation preservation age.</p>
<p><strong>Pension implications</strong></p>
<p>Working part-time is a great way to supplement your income in retirement, but it’s important to note that the income you do earn may have implications for your age pension. Visit the <a href="https://www.centrelink.gov.au/RateEstimatorsWeb/publicUserCombinedStart.do" target="_blank"><em><strong><span style="text-decoration: underline;">Centrelink website</span></strong></em></a> for information on the amount of money you can to earn with your pension. </p>
<p><em><a href="http://www.equipsuper.com.au/" target="_blank"><strong><span style="text-decoration: underline;">Equip</span></strong></a> manages $7 billion of investments for members working across a wide range of Australian industry sectors. This <a href="http://www.equipsuper.com.au/" target="_blank"><strong><span style="text-decoration: underline;">superannuation fund</span></strong></a> has been providing strong investment performance and has been a reliable provider of retirement benefits for over 80 years.</em></p>
<p><em>Noel Whittaker is a best-selling author, finance and investment expert, radio broadcaster, newspaper columnist and speaker. One of the world’s foremost authorities on personal finance, Noel recently released <a href="http://retirementhandbook.com.au/" target="_blank"><strong><span style="text-decoration: underline;">The Retirement Living Handbook</span></strong></a>. Co-authored with Rachel Lane, this handbook provides expert insight into retirement communities and is available <a href="http://retirementhandbook.com.au/" target="_blank"><strong><span style="text-decoration: underline;">here</span></strong></a>.</em></p>
<p><strong>Related links:</strong></p>
<p><span style="text-decoration: underline;"><em><strong><a href="/finance/retirement-income/2015/09/calculate-money-for-retirement/">How to calculate the bank balance you’ll need to retire</a></strong></em></span></p>
<p><span style="text-decoration: underline;"><em><strong><a href="/finance/retirement-income/2015/10/women-worse-off-when-they-retire/">Women worse off when they retire</a></strong></em></span></p>
<p><span style="text-decoration: underline;"><em><strong><a href="/finance/retirement-income/2015/10/what-is-life-cycle-super/">What is a life-cycle super product? And do you need one?</a></strong></em></span></p>
