Retirement planning is rarely straightforward, and when one partner reaches Age Pension age before the other, the rules can feel even more complicated. But with the right strategies, couples can often qualify for more and make their money go further without compromising on lifestyle.
The challenge for age-gap couples
Centrelink assesses couples differently when one partner has not yet reached Age Pension age. Some assets are excluded, some income is treated differently, and the thresholds are not always intuitive.
Without careful planning, you could miss out on entitlements you are eligible for or lock yourself into decisions that reduce long-term flexibility.
Four key planning opportunities
1. Leverage superannuation timing
Before your younger partner reaches pension age, funds in their superannuation may not count towards your assessable assets. Redirecting savings here can improve your eligibility while keeping money invested for the future.
2. Understand gifting and caps
Gifting can reduce your assessable assets, but Centrelink has strict limits: $10,000 per year or $30,000 over five years. Going beyond this could backfire if not managed carefully.
3. Think about home ownership strategically
Because your home is exempt, using savings for renovations, debt repayment, or upgrades can reduce your assessable assets and improve lifestyle comfort.
4. Consider income stream products
Some annuities and lifetime income products are only partially assessed for the assets and income tests, meaning they can provide reliable cash flow and boost your Age Pension entitlements.
The bigger picture: Planning ahead
When there is an age gap, planning for the transition into aged care also matters. Decisions around accommodation payments, super drawdowns, and how assets are structured can affect not just your pension today, but your financial options down the track.
Get advice before making big decisions
Every couple’s situation is different. What works for one family may not work for another, especially when age and income dynamics are unique. Getting advice early can help you maximise your entitlements, manage future costs, and make confident choices for retirement.
If you would like to understand your options, we are here to help you navigate them.