You're losing $20K by not doing this simple thing with your pension application! Find out what it is!
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When it comes to retirement, every penny counts. That's why it's crucial to be savvy about when and how you apply for your age pension.
Unfortunately, many Australians are missing out on a significant amount of money simply because they delay their pension applications.
It's a common issue that could be costing you more than you realise—up to $20,000, in fact!
Research conducted by Retirement Essentials and Link Advice has revealed that a staggering 32 per cent of Australians apply for the age pension at least a year later than they could have.
This procrastination can have a hefty price tag, with individuals potentially missing out on as much as $18,480 each.
When you consider the full pension pays $29,754.40 for singles and $44,855.20 for couples (combined), plus Commonwealth Rent Assistance where applicable, it's clear that every month without these funds is a missed opportunity.
The Pension Concession Card (PCC), which is automatically awarded to qualifying individuals, adds further value, offering $2,000-$3,000 in discounts and benefits annually.
Across the ‘about to retire’ population, these late applications accumulate to a colossal sum.
With the average delay costing $16,800 per person over 12 months and about 150,000 people applying each year, we're looking at a staggering $3 billion in lost entitlements.
This isn't just about the money that could be in your pocket right now; it's also about the long-term impact on your savings.
By not receiving the pension when eligible, many retirees are forced to draw more from their superannuation, diminishing their savings that could have been accruing compound interest over their retirement.
So, why do so many put off applying? Jeremy Duffield, Director of Retirement Essentials, points to several reasons, including procrastination, fear of the application process, uncertainty about benefits, and misunderstandings about how entitlements work.
Duffield stressed that delays are expensive. ‘If there was any one lesson, don’t delay. If you don’t know if you’re eligible, ask. If you need help, get it,’ he advised.
‘The rewards from the pension are worth the effort. It can be worth a million dollars over a lifetime, depending on your circumstances. And delays and misunderstandings can cost you tens of thousands of dollars.’
The fear of dealing with Centrelink remains a significant barrier, particularly after the Robodebt scandal and the subsequent Royal Commission, which exposed widespread issues in customer service.
This fear has become even harder to overcome due to staff cuts by past governments and the notoriously long wait times and call ‘drop-outs’ affecting the 43 million annual Centrelink calls. It's no wonder that many Australians give up before they even start.
Additionally, the complexity of Australia's retirement income system may contribute to delayed applications.
Despite its intricacies, Australia's system continues to rank in the top 10 globally for adequacy, sustainability, and integrity, according to the latest Mercer CFA Institute Global Pension Index.
Unfortunately, even a strong system isn't enough. The complex calculations needed to combine pension eligibility and benefits with a retirement income stream, along with any private savings or annuities, are overwhelming for most people.
While pre-retirees are advised to seek financial advice, the cost of a comprehensive plan—ranging from $4000 to $6000—can be hard to justify and unaffordable, especially for those with low incomes.
However, there's good news! You can cut through the complexity and ensure you don't miss out on your entitlements with a simple three-step checklist:
The age pension is a significant part of retirement planning, and you want to make sure you're not leaving money on the table.
While delaying your pension application can lead to significant financial losses, a growing concern for many Australians is whether the pension itself is enough to sustain them through retirement.
Recent studies have highlighted startling statistics about the adequacy of pensions for retirees, raising important questions about financial security in later years.
As the cost of living continues to rise, many are now questioning if the pension is truly sufficient to meet the needs of seniors.
Don't let procrastination or fear cost you thousands. Take control of your retirement income by understanding your pension entitlements and applying on time. Your future self will thank you for it!
Have you or someone you know been guilty of this? What advice would you give to those who are applying for an age pension? Let us know in the comments below.
Unfortunately, many Australians are missing out on a significant amount of money simply because they delay their pension applications.
It's a common issue that could be costing you more than you realise—up to $20,000, in fact!
Research conducted by Retirement Essentials and Link Advice has revealed that a staggering 32 per cent of Australians apply for the age pension at least a year later than they could have.
This procrastination can have a hefty price tag, with individuals potentially missing out on as much as $18,480 each.
When you consider the full pension pays $29,754.40 for singles and $44,855.20 for couples (combined), plus Commonwealth Rent Assistance where applicable, it's clear that every month without these funds is a missed opportunity.
Thirty-two per cent of Australians delay their age pension application by over a year, risking up to $18,480 in missed payments. Credit: Shutterstock
The Pension Concession Card (PCC), which is automatically awarded to qualifying individuals, adds further value, offering $2,000-$3,000 in discounts and benefits annually.
Across the ‘about to retire’ population, these late applications accumulate to a colossal sum.
With the average delay costing $16,800 per person over 12 months and about 150,000 people applying each year, we're looking at a staggering $3 billion in lost entitlements.
This isn't just about the money that could be in your pocket right now; it's also about the long-term impact on your savings.
By not receiving the pension when eligible, many retirees are forced to draw more from their superannuation, diminishing their savings that could have been accruing compound interest over their retirement.
So, why do so many put off applying? Jeremy Duffield, Director of Retirement Essentials, points to several reasons, including procrastination, fear of the application process, uncertainty about benefits, and misunderstandings about how entitlements work.
Duffield stressed that delays are expensive. ‘If there was any one lesson, don’t delay. If you don’t know if you’re eligible, ask. If you need help, get it,’ he advised.
‘The rewards from the pension are worth the effort. It can be worth a million dollars over a lifetime, depending on your circumstances. And delays and misunderstandings can cost you tens of thousands of dollars.’
The fear of dealing with Centrelink remains a significant barrier, particularly after the Robodebt scandal and the subsequent Royal Commission, which exposed widespread issues in customer service.
This fear has become even harder to overcome due to staff cuts by past governments and the notoriously long wait times and call ‘drop-outs’ affecting the 43 million annual Centrelink calls. It's no wonder that many Australians give up before they even start.
Additionally, the complexity of Australia's retirement income system may contribute to delayed applications.
Despite its intricacies, Australia's system continues to rank in the top 10 globally for adequacy, sustainability, and integrity, according to the latest Mercer CFA Institute Global Pension Index.
Unfortunately, even a strong system isn't enough. The complex calculations needed to combine pension eligibility and benefits with a retirement income stream, along with any private savings or annuities, are overwhelming for most people.
While pre-retirees are advised to seek financial advice, the cost of a comprehensive plan—ranging from $4000 to $6000—can be hard to justify and unaffordable, especially for those with low incomes.
However, there's good news! You can cut through the complexity and ensure you don't miss out on your entitlements with a simple three-step checklist:
- Use a pension calculator to estimate your likely pension payments in retirement. Many super funds offer free tools online.
- If you're within a few thousand dollars of qualifying, start your application as soon as possible. You can apply from 13 weeks before you turn 67.
- Remember that 80 per cent of Australians will receive pension benefits at some stage. Benefits are not backdated, so applying late means permanently missing out on funds.
The age pension is a significant part of retirement planning, and you want to make sure you're not leaving money on the table.
While delaying your pension application can lead to significant financial losses, a growing concern for many Australians is whether the pension itself is enough to sustain them through retirement.
Recent studies have highlighted startling statistics about the adequacy of pensions for retirees, raising important questions about financial security in later years.
As the cost of living continues to rise, many are now questioning if the pension is truly sufficient to meet the needs of seniors.
Have you or someone you know been guilty of this? What advice would you give to those who are applying for an age pension? Let us know in the comments below.
