Published on 23 May 2016 (AMP News&Insights)
Graham Berndt is back at work 25 years after he retired.
The 79-year-old Queenslander now does two five-hour shifts a week at McDonald’s, which he says offers him indepdendence and tops up his pension.
He concedes that never in his wildest dreams did he imagine that he would be working again in his 70s1.
But returning to the workforce can be the reality for some retirees – and it’s not always because they need more money.
Retirement doesn’t suit everyone
Some may be bored with the retirement lifestyle, some may get an attractive job offer, and others may miss the social contact, or the mental and social benefits2 of working.
Going back to work after retirement doesn’t necessarily mean returning to your old job. For some people it’s the chance to take on a completely different role.
But it’s not just a matter of deciding one day to go back to work. There are a number of things to consider before jumping back into employment.
If I’ve retired and drawn on my super, can I return to work?
If you have previously declared that you are retired (after reaching preservation age) and either taken a lump sum or are receiving payments from your super fund, you can still return to work.
But at the time of accessing your super, you must have genuinely had no intention of returning to work for more than 10 hours a week.
You must be prepared to prove this to the Australian Taxation Office or the Australian Prudential Regulation Authority, depending on your super fund. If you return to work for less than 10 hours a week, there will be no issue.
What can you do to help prospective employers recognise your worth?
Older workers have experience, are generally reliable and loyal, and often have a strong work ethic. That’s what employers should see, but it’s important that you promote your abilities and do what you can to hone and adapt them.
There are plenty of adult education courses available to help you sharpen your skills or learn new ones, but mostly you should be confident that your previous years in the workforce will stand you in good stead.
What is the work test, and does it apply to me?
If you’re 65 or older, you don’t need to be retired to access your super benefits, but if you wish to contribute to a super fund, you must satisfy a work test.
Basically, it means you need to do 40 hours of paid work over 30 consecutive days (which includes weekends) in the financial year. However, from age 75 you cannot contribute even if you meet the work test.
Note: As part of the 2016/17 Federal Budget announcements, the government is proposing to abolish the above work test for contributions made between age 65 and 74 (inclusive).
What about the Age Pension?
To receive the Age Pension, Centrelink conducts an assets test and an income test whereby your super account balance will typically be treated as a financial investment.
But the Work Bonus scheme, which increases the amount you can earn before your pension is reduced, can also apply.
What are my rights?
If you have any questions about your rights when you re-enter the workforce, you can go to the Department of Employment website.
Getting ready to retire
If you haven’t yet retired, you might like to look at the following options that may help you make the shift from full-time work to retirement easier:
- look into a transition to retirement strategy
- review your investment strategy
- manage your money – see our online learning module for help
- find alternatives for funding your retirement (such as downsizing your home, selling other assets or getting a reverse mortgage).
We have the resources
If you’d like advice on how to budget and streamline your financial affairs, speak to a financial adviser or call us on 131 267.