Age Pension changes spotlight need for retirement planning

22/05/2014

Sixty-five is no longer the magic number for Australians.

Treasurer Joe Hockey spoke about upping the retirement age in April, although the exact details were not fully formed.

"It may be the case that my generation has to work for an extra three years ... the fact is that now, as in the United Kingdom, it's probably the case in Australia, one in every three children born today will live to 100," Mr Hockey is quoted as saying by Fairfax Media in a May 2 article.

However, that "extra three years" has turned into five for Australians born after 1965.

Confirmed in the 2014 Federal Budget, those born after this year will not be able to claim their Age Pension until the age of 70.

Meanwhile, if you're born before July 1952, your Age Pension will be available at age 65. If you're born after June 1952 but before January 1966, you will have an Age Pension somewhere between ages 65 and 70.

However, this change is not happening all at once. The goal is to raise the Age Pension fully to 70 by 2035.

In the meantime, the first upward changes will occur in 2017, when the Age Pension will rise to 65.5 years. From there, the Age Pension will rise by six months every two years, reaching 67 in 2023.

While these changes are meant to be incremental, the fact that the age at which you'll be able to claim your pension will change every two years means it's more important than ever to stay on top of your superannuation and retirement strategies.

Working with an experienced financial planner can help you ensure you're ready to retire at the right time, as well as help you plan out your transition to a post-work life.