Money in Your 70s: Simplify, Optimise and Enjoy

Your 70s can be a financially fulfilling chapter—if approached with intention. With the bulk of your working life behind you, now is the time to reduce financial complexity, take full advantage of available entitlements, and enjoy the rewards of your efforts. Whether you're well into your 70s or approaching them, clarity and prudent decision-making remain essential.

Below are four key areas to review with your financial adviser:

1. Optimise Government Entitlements

By your 70s, you may be eligible for key government benefits such as the Age Pension or the Commonwealth Seniors Health Card. However, eligibility criteria are subject to change based on your assets, income, and living situation.

For example, if you were previously ineligible for the Age Pension at 67 due to exceeding the thresholds, a change in your circumstances—such as downsizing or the impact of gifting—might improve your eligibility later. Conversely, a financial windfall or an increase in asset value could reduce your entitlement or trigger overpayment risks if not reported promptly to Services Australia.

To stay compliant and maximise your benefits:

• Review your eligibility annually.

• Be aware of allowable exemptions—such as up to $15,000 per person (indexed) held in funeral bonds—which are excluded from the Age Pension assets test.

• Understand the Centrelink gifting rules: You can gift up to $10,000 per financial year (and $30,000 over five years) without reducing your entitlements. Any amount beyond these limits becomes a “deprived asset” for five years and will be assessed.

Note: It is important not to rely on general assumptions about entitlements. A qualified adviser can assist in navigating Centrelink rules while meeting legal obligations around advice provision.

2. Manage Your Super Income Streams

If your superannuation is paying you an account-based pension, you are required to withdraw a minimum amount each financial year based on your age. For those aged 65–74, this is currently 5%, increasing with age.

Here are some key considerations:

• Minimum withdrawals: Ensure you meet the minimum payment to comply with superannuation regulations. Under-withdrawing may breach the conditions of the pension and could affect the fund’s tax status, particularly for self-managed super funds (SMSFs).

• Withdrawing more: You can draw above the minimum if your circumstances require it—but be mindful of liquidity and sustainability.

• SMSF liquidity: If you operate an SMSF, ensure your fund holds adequate liquid assets to fund pension payments. Illiquid assets (e.g., property) may cause compliance issues if cash is not available to meet obligations.

Advisers must also ensure the fund’s investment strategy supports its ability to pay pensions and consider diversification, liquidity, and the insurance needs of each member as per SIS Regulation 4.09.

3. Consolidate and Simplify Your Finances

Financial complexity often increases with age, but your 70s offer a good opportunity to streamline.

Consider the following actions:

• Consolidate accounts: Reduce excess bank accounts, super funds, or old investment holdings where practical. This can lower fees and improve visibility.

• Rationalise physical assets: If properties or assets are no longer serving your goals, consider whether selling or gifting them aligns with your retirement strategy.

• Consider super contributions: Subject to eligibility, you can still make certain types of contributions:

• Bring-forward non-concessional contributions up to age 75 (check contribution caps).

• Downsizer contributions of up to $300,000 per individual (no age limit beyond 55, no work test required) if you meet the conditions.

Note: All super contributions must comply with current contribution rules, caps, and conditions of release. Advice in this area must be documented appropriately, including assessing capacity to contribute and the impact on benefits such as the Age Pension.

4. Create a Legacy—And Enjoy Life Along the Way

Many Australians in their 70s have more financial resources than they’ll need in their lifetime. That opens up the possibility of thoughtful legacy planning—and enjoying the experience of giving during your lifetime.

Key steps to consider:

• Living gifts: Supporting children or grandchildren with education, housing, or other life goals can be personally fulfilling. But ensure it aligns with gifting rules for Centrelink and be careful not to compromise your own future needs.

• Estate planning: Ensure your will, enduring power of attorney, and superannuation death benefit nominations are up to date. Be aware that superannuation is not automatically dealt with under your will unless directed by a binding death benefit nomination.

• Enjoying now: Don’t forget to allocate funds to live well—whether it’s travel, hobbies, or time with family. This is a period where good health and freedom often intersect.

An adviser can assist in reviewing estate documents and ensuring nominations meet super fund rules, but legal documentation such as wills should be handled by a legal professional.

Special Note for SMSF Trustees

If you manage your retirement via an SMSF, it’s essential to understand the trustee responsibilities:

• You must ensure ongoing compliance with super and tax laws.

• Pension payments must meet minimum standards.

• The investment strategy must be reviewed regularly.

• Trustees should document decisions and keep detailed records in line with ATO and ASIC expectations.

If managing the SMSF is becoming burdensome, you may consider professional administration support or transitioning to a public offer fund. Before doing so, ensure the appropriateness of the advice is assessed and documented.

Final Thoughts

Your 70s are a chance to shift from accumulation to enjoyment. With the right structure, these years can be both simpler and richer in meaning.

Focus on what matters:

• Make use of government support available to you.

• Keep your super working efficiently within the bounds of regulation.

• Reduce financial clutter to give yourself more clarity and control.

• Create a legacy—both financial and personal.

Disclaimer
This article contains general information only and does not constitute personal financial advice. It does not consider your personal objectives, financial situation, or needs. We recommend speaking with a licensed financial adviser for tailored advice. Be sure to consult current ASIC guidelines, ATO publications, and Centrelink thresholds when making decisions.