Getting OaP with Super

[georgegeorgia]

I'm wondering if it's worth working and salary sacrificing into Super and then retiring at say 64 with a million dollars

 

Problem with that is you won't get the OAP pension at 67 ,am I correct?

 

If that's the case ,is it worth salary sacrificing,saving into your super ?

 

I'm thinking far better to retire at 60 take what you have in your Super and spend it ,but I'm thinking the government is not that stupid

 

One guy at my work tells me is retiring at 66 with over a million dollars and will tell Centrelink he lost it at the casino so he can get the OAP

 

I'm thinking better to retire at 60 with $600,000 live in Thailand on $40,000 a year come back at 67 for the OAP but...still won't get it because saved too much Super I believe??? 

 

Edited February 7 by georgegeorgia

[Nemises]

9 minutes ago, georgegeorgia said:

over a million dollars and will tell Centrelink he lost it at the casino so he can get the OAP

And he will be hiding the $1M cash under his bed right? 

[georgegeorgia]

17 minutes ago, Nemises said:

And he will be hiding the $1M cash under his bed right? 

So he says 

So I will have to research how much Super one can have to get the full OAP 

It's no using working to 65 or older save save save and get nothing 

 

I'm thinking better to go at 60

[gearbox]

2 minutes ago, georgegeorgia said:

So he says 

So I will have to research how much Super one can have to get the full OAP 

It's no using working to 65 or older save save save and get nothing 

 

I'm thinking better to go at 60

23 minutes ago, Nemises said:

And he will be hiding the $1M cash under his bed right? 

1m cash or equivalent assets will bring way more income than the OAP itself.  Would be pretty dumb to keep 1m cash at zero earnings in order to claim OAP.

[Fat is a type of crazy]

Bottom line is if you take your super at 60 and spend it nothing can stop you then applying for the pension at 67. If you, say, gifted the funds to people there are rules around that. As far as Centrelink I know that you can make an appointment with a FIS officer who is somewhat independent and can give you tips on how you can maybe still get a pension or at least a health care card possibly depending on your circumstances. 

Can depend on whether you think you want to have fun now and whether you feel you'll be the same at 67 or you may want to take it easy with a cheaper lifestyle. 

 

One point I'd make is it is worth the cost of financial advice if you can find someone worthwhile. I have a defined benefit super scheme as a long time public servant which works a bit differently to normal funds but two things I didn't know till literally today are:

- you can keep putting money in super up to $27,500 and claim is as a tax deduction even after you stop work up to I think 67.

- you can put your funds in an allocated pension where your funds are still accessible but there is no tax on the gains on your funds.

I am still learning the details but things like that can make a significant difference to tax.

 

 

Edited February 7 by Fat is a type of crazy

[KhunHeineken]

As I said a long time ago, the days of people retiring and being able to claim a pension are coming to an end.  Most people entering the workforce in the early 90's will have contributed to their own Super until retirement age, and thus have too much to meet the criteria to claim a pension.

 

OP, you seem to be one of these, or close to it.  

 

This is why I mentioned in the pension thread, some time ago, that basically, pensions will be a thing of the past for most Aussie retirees in the next 15 years or so.  I remember crunching some numbers in that thread, and even with the average wage, over a 40 year career, you go over the allowable criteria to get a pension. That turned the focus to Super and non resident tax in that thread, which is something you need to consider.  

 

Just one of many websites with information.  

 

  https://simplyretirement.com.au/tax-super-overseas

 

"Additionally, should you draw a pension from an untaxed superannuation fund, and these are largely limited to Government, public sector funds, then you may be taxed on your pension on a non-resident basis in Australia should you retire overseas. Non-resident tax rates are higher than residents tax rates because there is no tax free alowance. That tax may, or may not, be available as a tax offset in the country of residency." 

 

The above also relates to the double taxation treaty between Australia and Thailand, which is the source of some debate in the other thread.   

 

 

[4MyEgo]

On 2/7/2024 at 12:06 PM, georgegeorgia said:

I'm wondering if it's worth working and salary sacrificing into Super and then retiring at say 64 with a million dollars

 

If you can afford salary sacrificing, then all and good, you save on the tax you would have otherwise paid if you didn't salary sacrifice, so you would want to work out how much tax you would have saved over the period you are looking to salary sacrifice. I don't imagine it would be that much in the short term, plus you have to ask yourself, how much will your Super grow during that period as well (crystal ball) required.

 

On 2/7/2024 at 12:06 PM, georgegeorgia said:

Problem with that is you won't get the OAP pension at 67 ,am I correct?

 

Yes, If you have over the asset threshold you will get sweet FA, so a million $ is over the threshold amount.

 

On 2/7/2024 at 12:06 PM, georgegeorgia said:

If that's the case ,is it worth salary sacrificing,saving into your super ?

 

Discussed above.

 

On 2/7/2024 at 12:06 PM, georgegeorgia said:

I'm thinking far better to retire at 60 take what you have in your Super and spend it ,but I'm thinking the government is not that stupid

 

 

Taxing your Super at 60 is tax free, you can spend it, up to you, as long as you can say where you spent it, shouldn't be a problem, as long as you don't have anymore, that said, if your Super is say $600k, I would suggest that you don't spend it, but live off of it on a budget and make sure you are just under the asset threshold, if applying for the Age Pension, that way you will be entitled to the Age Pension. 

 

On 2/7/2024 at 12:06 PM, georgegeorgia said:

One guy at my work tells me is retiring at 66 with over a million dollars and will tell Centrelink he lost it at the casino so he can get the OAP

 

LoL, tell him that I said, good luck with that one.

 

On 2/7/2024 at 12:06 PM, georgegeorgia said:

I'm thinking better to retire at 60 with $600,000 live in Thailand on $40,000 a year come back at 67 for the OAP but...still won't get it because saved too much Super I believe??? 

 

If you do retire at 60 with $600k, you won't need as much as $40,000 a year to live on in Thailand, to then go back at 67 to claim the Age Pension, and you won't have too much in Super, because you will make sure that your Super is under the threshold amount, (see link below).

 

The link regarding the asset thresholds is simple, you just have to make sure that you plan well ahead, and be careful how you remit money here to Thailand because, if I am not mistaken, your Super will be taxable here, because it wasn't taxed in Australia, I say that because your residency status will change to a resident of Thailand after 180 days here. 

 

Whether Thailand enforces the residency rule here on expats is something to keep an eye on.

 

Also remember, if you retire at 60 and live here till your 67, you will have to do the 2 years when you return to Oz to claim the Age Pension.

 

A lot to consider, e.g. rent, cost of living for 2 years, and being away from Thailand, GF/BF miss you so muk, love you long time etc etc.

 

I retired at 55, now 63, no regrets, as for the Age Pension, my feasibility research tells me that it would take me 4 years to recoup the outlay, if I was to return for the 2 years to claim the Age Pension, so I would be 71 before I actually got back what I spent in those 2 years in Australia to claim the Age Pension, suffice to say it's a dead duck for me, exactly how the Oz government planned it to be, but most don't seem to do the math, that or they have accommodation and live on the very cheap, which would make it a possible break even scenario for them, which would then make it worth it for them. 

 

https://www.servicesaustralia.gov.au/assets-test-for-age-pension?context=22526

 

EDIT: Once you do receive the Age Pension and do your 2 years, when you return here, you will not pay tax on the Age Pension here under the DTA, DO NOT pay any attention to someone who says otherwise, or you be, as you say, "up sh-t creek, you can look it up for yourself under Article 18 which has been thrashed about on the Australian Age Pension thread, but that individual still doesn't get it and will provide you with misleading information. If you don't understand Article 18, have someone explain it to you who does, and don't even go near Article 19, as that person believes it is part of Article 19, which is only for Government Employee Pensions, not Age Pensions and annuities which were Article 18 covers.

 

https://www.austlii.edu.au/au/other/dfat/treaties/1989/36.html

 

 

 

Edited February 10 by 4MyEgo

[KhunHeineken]

On 2/10/2024 at 3:48 AM, 4MyEgo said:

EDIT: Once you do receive the Age Pension and do your 2 years, when you return here, you will not pay tax on the Age Pension here under the DTA, DO NOT pay any attention to someone who says otherwise, or you be, as you say, "up sh-t creek, you can look it up for yourself under Article 18 which has been thrashed about on the Australian Age Pension thread, but that individual still doesn't get it and will provide you with misleading information. If you don't understand Article 18, have someone explain it to you who does, and don't even go near Article 19, as that person believes it is part of Article 19, which is only for Government Employee Pensions, not Age Pensions and annuities which were Article 18 covers.

And let's hope the OP doesn't want to retire in Germany, and probably some other countries, because that makes everything you just said WRONG. 

Edited February 12 by KhunHeineken

[KhunHeineken]

On 2/7/2024 at 1:06 AM, georgegeorgia said:

One guy at my work tells me is retiring at 66 with over a million dollars and will tell Centrelink he lost it at the casino so he can get the OAP

He should tell Centerlink he lost it all to a Thai bar girl.  Way more believable scenario. 

[dinga]

On 2/10/2024 at 10:48 AM, 4MyEgo said:

 

my feasibility research tells me that it would take me 4 years to recoup the outlay, if I was to return for the 2 years to claim the Age Pension, so I would be 71 before I actually got back what I spent in those 2 years in Australia to claim the Age Pension, suffice to say it's a dead duck for me, exactly how the Oz government planned it to be, but most don't seem to do the math, that or they have accommodation and live on the very cheap, which would make it a possible break even scenario for them, which would then make it worth it for them. 

 

My understanding is that - provided you meet the eligibility criteria especially both the Assets & Income Tests - you get the OAP immediately you turn up and say you've returned to permanently reside in OZ (the 2 year period relating purely to portability, not eligibility).  Did your calculations factor in the receipt of the OAP during the whole of that 2 year period ??   

[4MyEgo]

On 2/20/2024 at 9:15 PM, dinga said:

My understanding is that - provided you meet the eligibility criteria especially both the Assets & Income Tests - you get the OAP immediately you turn up and say you've returned to permanently reside in OZ (the 2 year period relating purely to portability, not eligibility).  Did your calculations factor in the receipt of the OAP during the whole of that 2 year period ??   

 

Yes, thanks, I am well aware that the Age Pension is based on eligibility criteria, i.e. (Asset & Income Tests).

 

What I was banging on about was how long it would take me to recoup my outlay to go from here back to Oz to get it and stay there for the 2 years to have it made portable.

 

For starters, I would require an airfare ticket (domestic) to get to BKK, then an airfare ticket (international) to get to Australia, and of course it would have to be a return ticket so that I can come back and see my family once a year for a short break, e.g. 2 weeks.

 

Then I would require return tickets for the family (3) to visit me for the school break, e.g. March-April.

 

So I would require 4 return tickets (Domestic & International) per year for starters.

 

Then you have rent to pay, now for a decent one bedroom unit (not cockroach infested in Sydney with facilities such as a pool, gym, sauna, I would need to pay $600 a week as a minimum, that also being within a skip to train and bus transport & shops like Woolworths and or Coles.

 

The Age Pension for a Single bloke is $548.00 per week ($1,096.70) per fortnight with supplements, so I am already out of pocket on a weekly basis, then I have electricity, groceries, car if not using the public transport system, and to be honest, I think the public transport system will have to do so as to keep the costs down on having a car.

 

So 2 years in Australia on the Age Pension wouldn't cover my costs to live there, just looking at the rent I would be required to pay.

 

I would suggest that I would be out of pocket at least another 2 years of Age Pension money before I recoup those costs to live there for those 2 years, that is why I said that I would be 71 before the Age Pension money would start flowing to me, i.e. money in my hand here in Thailand, and then I would have to consider whether it will be worth it with the New Tax Code and if they implement Article 18 of the Double Taxation Agreement between Australia and Thailand which has been in force since 1989, however not really enforcing the tax on Age Pensioners that I am aware of to date, but are within their rights to do so, will they, well that is up to them, something to keep an eye on that with the New Tax Code, and if they do, go down that path, you have the deductibles and the threshold to claim, so it could be a minimal tax one would hope, but something to consider when doing the calculations.

 

I suppose if I went to a different state, or went bush and lived in cheap accommodation for 2 years and didn't have the family come over for 2 months a year, I could reduce my outlay and maybe save a year on the recouping of the outlay, but life is meant for living, and living for me means comfort, so I won't cut back on the things I like, especially having family time.

 

I workout if things are feasible and if not, will give them a wide birth, which I think I will do when I am Age Pension age.

 

The other thing I did mention was to buy a place to save forking out $600 a week on rent, then it would make it worth it, but I would have to make sure I could get my money back in 2 years, plus the stamp duty, legal fees, agents advertising costs and commission, then it would be probably be down to an almost break even point apart from the airfares, but could consider those as an annual expense anyway.

 

That's the skewed way I do my feasibility on whether it's worth going back to get the Age Pension, did I mention that if I did buy a place, that I would lose out on the tax free returns that I make per year here which is about double what I would be getting on the Age Pension, as I would require those funds to buy a place, suffice to say, your damned if you do and your damned if you don't.   

 

Edited February 21 by 4MyEgo

[georgegeorgia]

You would have to be in a "share" house

 Try going near a university then you can rent out the room.s

 

You can put 4 bunk bed in and international students 

[georgegeorgia]

You only need a studio not 1 bedroom,your only staying 2 years 

 

How much is a studio say in mount Druitt? 

I know the reputation but you will meet interesting people and I believe they need casual bus drivers urgently 😁

Edited February 21 by georgegeorgia

[4MyEgo]

3 hours ago, georgegeorgia said:

You only need a studio not 1 bedroom,your only staying 2 years 

 

How much is a studio say in mount Druitt? 

I know the reputation but you will meet interesting people and I believe they need casual bus drivers urgently 😁

 

I can tell you this much Georgie, you can read, but can't understand what others write. Try again, you might get it this time.

 

The bus driver suggestion is so you, you can finally meet real people while driving them to their destinations, who knows, maybe even pick up a Sheila or 2, I mean if that is your preference, and of course it would probably pay better and beat the heck out of spending most of your days on forums while cleaning offices in that empty building at nights, or have it as a 2nd job to make more money to add to your million $ superannuation account for when you retire here in the LOS, the 2nd job part could even help you pay for your $3,000 a quarter strata levies and you taking the Sheila's to McDonalds for dinner, before taking them back to your studio in the bus.

 

I know, I'm a genius oi, and your welcome.

 

Apply straight away, and get that studio before someone else takes it,

 

As for a studio, as mentioned, I have a family, bunks in a one bedder is a great idea, thanks, but a fold out in the loungeroom would be better for the kids and provide some privacy for me and mum, not a single bloke Georgie, I have a life.

 

Wow, I'm on fire this morning, to think I just got out of bed, and not even a coffee.

 

Your the man Georgie, and fire back with more thoughts when your ready as I am always up for your gas suggestions. 

 

Have a nice day now, Georgie the bus driver, now that's catchy, you know like, Bob the builder 

 

Edited February 21 by 4MyEgo

[KhunHeineken]

On 2/21/2024 at 12:22 PM, 4MyEgo said:

I would suggest that I would be out of pocket at least another 2 years of Age Pension money before I recoup those costs to live there for those 2 years, that is why I said that I would be 71 before the Age Pension money would start flowing to me,

This the unknown factor in the equation, life expectancy. 

 

Live to a ripe old age in Thailand, and the 2 years back in Australia for the pension was worth it.  Die not long after the 2 years back in Australia and it wasn't worth it. 

 

That said, their is a sense of entitlement, and rightly so.  Why let the government off the hook for it? 

[Rimmer]

Inflammatory post and reply have been removed

[TroubleandGrumpy]

Check your assets and income limits - easy to calculate if you will still get a partial pension.  You get a partial pension but full medical benefgits as logn as you are not too far over the base limits. 

When living in Australia is is good to not have too much Super - when you are over assets/income limits for Pension that means no free/subsidised medications when you are going to need them - 70+? 75+? 

Either study up or get financial advice - or both.

[KhunHeineken]

For those thinking of taking out their Super in a lump sum, moving it to Thailand, then going cap in hand to Centerlink for the Aged Pension.

 

  https://www.expattaxes.com.au/fifo-worker-with-a-foreign-bank-account-ato-know-about-it/#:~:text=This is done via the,office automatically every single year.

[TroubleandGrumpy]

Seems they are going to make it harder and harder - the limit is now 3 million - soon it will be 2 then 1