Introduction 

Ben and Anne retired 12-months ago and have thoroughly enjoyed this new chapter in their lives. However, this last year has brought higher-than-expected expenses, promoting them to seek professional financial advice. They are eager to ensure they can maintain their current lifestyle and continue to make the most of their retirement. Having now reached Age Pension age, they also want to understand if they are eligible for some Government Age Pension and can access the Pensioner Concession Card. 

A plan for comfortable living and the Age Pension 

The adviser has good news for Ben and Anne. He is able to show them that they can achieve a combined retirement income of $73,031 p.a., increasing each year with inflation. This level of income is equal to the ASFA ‘Comfortable’ Retirement Standard as of September 2024.   

This income comes from a combination of income streams for both Ben and Anne: the Government Age Pension, account-based pensions (for flexibility and exposure to growth assets) and CPI-linked lifetime pensions (for income certainty). This drawdown retirement income strategy is shown in the graph below.  

 

How the allocation to a lifetime pension helped Ben and Anna get the Age Pension immediately

Ben and Anne’s assessable assets for Age Pension purposes are $1,120,000. A couple who owns their home can have assets of up $1,045,500 (at 1 January 2025) and still be eligible for a part Age Pension. 

However, after implementing their adviser’s recommendation of a 20% allocation of their super savings to a CPI-linked lifetime pension, Ben and Anne’s assessable assets are immediately reduced to $1,040,000. Of their $200,000 invested in the lifetime pension, just 60% (or $120,000) is assessable under the assets test. This reduction in assessable assets puts them under the assets test cut-off level and allows them an Age Pension. 

Importantly for Ben and Anne, this small Age Pension entitlement also makes them eligible for the Pensioner Concession Card and the associated benefits (such as cheaper healthcare, medicines and even reduced rates!).

But retirement income is about more than just the Age Pension. 

The combination of income streams recommended for Ben and Anne provides them with: 

• A lifetime income of more than $8,961 p.a. (fully indexed annually by inflation), over and above any Age Pension entitlement they may be eligible for, to meet their essential spending requirements. 
• Immediate eligibility for the Age Pension where previously they were ineligible for the Age Pension based on their assessable assets and income;
• A 100% chance of meeting their comfortable level of retirement spending of $73,031 p.a. indexed by inflation.  

This case study relates to a hypothetical couple – Ben and Anne – and is provided for illustrative purposes only. It is based on information that is current as at 8/2/2025 unless otherwise specified. 

It is intended to be general information only and not financial product advice and has been prepared without taking into account any person’s objectives, financial situation or needs. Each person should, therefore, consider its appropriateness having regard to these matters and the information in the Target Market Determination (TMD) and Product Disclosure Statement (PDS) for the RetireAccess Lifetime Pension before deciding whether to acquire or continue to hold a Lifetime Pension. A copy of the applicable TMD and PDS is available at TelstraSuper.com.au or by contacting TelstraSuper on 1300 033 166. This case study includes statements of opinion, forward looking statements, forecasts or predictions based on current expectations about future events and results. Actual results may be materially different from those shown. This is because outcomes reflect the assumptions made and may be affected by known or unknown risks and uncertainties that are not able to be presently identified.  We strongly recommend that prospective investors seek financial product advice as well as professional taxation and social security advice in relation to their individual circumstances.  Your local Centrelink or Department of Veterans’ Affairs (DVA) office can help answer any question you may have about the application of the income and assets test for Age Pension eligibility. Your financial adviser can also help. 

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We’re here to help 

We understand that retirement planning can be complex, which is why we offer access to our experts. Our team can help you understand how a lifetime pension could support your financial future and assist you with any questions you have.

Call 1300 033 166 or request a call back. 

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