Somehow our younger-years vision of retirement has morphed from sitting in the shade of an umbrella on a white sandy beach, book in hand. With the world recently doling out ‘no historical data on that, mate’ scenarios, there is no longer a traditional notion of retirement. So, should individuals reevaluate their life paths, priorities, and financial situations now? Retirement is moving toward a dynamic and flexible concept driven by a range of factors, including increased life expectancy, improved health in later years, and the desire for continued engagement and fulfilment. So, once you do retire, can you come out of retirement? Yes. Toni did. Here’s her take on it and the info you need to consider before you do.
Financial Decisions in the ERa of Super
Financial situations do play a huge part in the retirement decision-making process and with superannuation typically providing retirement funding in Australia, ask yourself, do you know enough about transition to retirement (TTR) and annuity models? Your super is accessible through a variety of accounts as young as 55 – whether you are working or not. It’s best not to wait until you are ready to retire to investigate all your options as services can differ from fund to fund.
It’s not just about the money
Individuals retire for many reasons. However, as circumstances change, some of us find ourselves yearning for intellectual stimulation, social interaction, or simply a new challenge. After a period of leisure or pursuing dreamt retirement perks, many retirees are re-entering the workforce. I have retired twice (so far) and am on the hunt for a new beach while also pursuing a meaningful, fulfilling, and flexible work opportunity.
Redefining Retirement and Work
Coming out of retirement may not necessarily be going back to work full-time. This prospect allows people to reevaluate priorities to return to work on their terms and take on roles that align more closely with their matured aspirations and lifestyles. Part-time work, consulting, or freelancing are popular options for those seeking a more flexible and balanced approach to work during their retirement years, all-the-while continuing to experience the rewards of spending more time with family, pursuing hobbies, or enjoying leisure activities. Societal expectations and stereotypes associated with ageing and work have also changed. Career focused individuals can look forward to a more fluid approach to their career trajectory early-on if they plan for a retirement gap. There is an increased recognition that retirement can be a transition to a phase where work aligns more closely with personal passions and goals.
What to Consider Before REjoining the Workforce
Before you come out of retirement, though, you need to consider the implications, particularly regarding your superannuation and pension. If you’re in this boat, here are some of the questions you might be asking:
Can I Return to Work After Accessing My Super?
Fortunately, yes, you can. But the conditions depend on how and when you accessed your super. If you accessed your super before turning 60, you would have declared that you intend never to return to any gainful employment for 10 hours or more per week. This declaration is based on the general condition that members can access their super after they reach their preservation age, end gainful employment, and declare their intention to retire permanently. You must understand that making a false declaration while accessing your super is illegal. As such, at the time of the declaration, you should have had no intention to return to work. You may need to discuss your choice to come out of retirement with a lawyer and your super company.
If you were over 65 when you accessed your super, you don’t need to make any declaration on your retirement status. This means you can return to work – full-time, part-time, or casually. You can even change jobs or start a new business if you wish.
How Many Hours Can I Work on the Age Pension?
The Age Pension isn’t affected by the number of hours you work, but the amount of income you earn in a fortnight can impact your Age Pension. According to Services Australia (as of 1 July 2023), single people can earn up to $204 per fortnight before their pension payment is impacted. For couples, your combined income is impacted when it exceeds $360. Going over these limits might not necessarily mean your Age Pension gets cut off. However, if you’re considering returning to work, you need to consider that Centrelink won’t pay your pension payment for that fortnight if you earn too much. Talk to Centrelink about your plans before you take on work.
What About the Work Bonus?
The Government has introduced a Work Bonus, designed to encourage pensioners to continue working by allowing them to keep more of their pension payment while earning an income. It allows pensioners to earn up to $300 per fortnight without it impacting their pension payment. This bonus is automatically applied if you’re eligible; you don’t need to apply separately. Essentially, every fortnight you get $300 of Work Bonus, which offsets your accessible income for that period. Any unused Work Bonus is accrued, up to a maximum of $7,800, which can be used to offset future income. The idea of coming out of retirement reflects a paradigm shift in the way individuals perceive and approach their post-working years. It significantly allows for a more fluid and personalised approach to life when retirement is embraced as a dynamic process rather than a singular event.
About the Author: Toni is twice retired and now writes part-time about her experiences.
