Returning to work after retirement

29 August 2024

Thinking about going back to work or you’ve heard about ‘unretirement’? Research by National Seniors Australia found 16% of age pensioners re-entered the workforce after initially retiring, while another 20% said they would consider returning to work¹.

Why retirees are choosing to work after retirement

There are many reasons why retirees choose to return to work. These range from needing extra money from rising living costs, wanting to save money for things like home renovations, a trip or a car or to help other family members. For others the return to work provides social connection, the opportunity to stay active, or even for some, an escape from boredom. 

Also worth noting is the fact that Australians are now living longer. Over the next 40 years, life expectancy at birth is expected to continue to increase, from 81 years for men and 85 years for women in 2022-23, to 87 years for men and 90 years for women, by 2062-63². This suggests that in the future retirement funding may need to last longer and may motivate some retirees to join the ‘unretirement’ movement.

No matter what the reasons, for those thinking about returning to work, there are often a few questions.

Common questions about returning to work

Can I return to work after retiring and accessing super? 

Yes, however it’s important to think through any potential impacts on your pension or tax. 

How will my government age pension payments be affected if I return to work after retiring? 

The amount you earn could affect the Age Pension.

According to the Services Australia website (as of 1 July 2024) single people can earn up to $212 per fortnight before pension payments are affected and couples can earn $372 per fortnight combined.

For every dollar above these income thresholds there is a reduction in benefit, up to the cutoff point. If you’re an eligible pensioner, the work bonus may help you earn more income from working without reducing your age pension. Detailed information about the Work Bonus and the amount of income retirees can earn, can be found on the Services Australia website.

What happens to my super once I return to work?

Whether you’re returning to work full-time, part-time or casual - you’re entitled to be paid super in line with the Super Guarantee (SG) rules. This means your employer will need to contribute at least 11.5% of your earnings in this financial year 2024-2025 and 12% on the period 1 July 2025 - 30 June 2026. This will need to take place at least once every 3 months.

Your employer will ask you for your super account details to pay your SG payments. If you don’t have a current accumulation account, you can open one yourself or your employer can open one for you.

What happens to my account based pension? 

When you're retired, you may have accessed your super balance to either start a super pension or take as a lump sum. If your circumstances change and you return to work, you will still be required to draw down a minimum amount each year from an account based pension.   

What is the maximum super I can transfer to pension?

For those who are yet to commence any retirement income stream, the general Transfer Balance Cap is $1.9 million from 1 July 2023. This cap is assessed at commencement of any retirement income phase pension. 

You can find more information on the Transfer Balance on the ATO website.

For more information

Returning to work after retirement can provide valuable benefits, however before making the move it’s important to think through any potential impacts on your super or pension payments. This is a complex area, so if you have any questions or concerns, it’s important to seek advice before taking any action. A qualified financial adviser can³ help steer you in the right direction. 

 

Find out more

1. NSA-2022 Post Retirement Work Report dated 22 June 2022
2. The 2023 Intergenerational Report – Australian Treasury 
3. Personal financial product advice is provided under the Australian Financial Services Licence held by a third party and not by AustralianSuper Pty Ltd. Fees may apply.

This may include general financial advice which doesn’t take into account your personal objectives, financial situation or needs. Before making a decision consider if the information is right for you and read the relevant Product Disclosure Statement, available at australiansuper.com/PDS or by calling 1300 300 273. A Target Market Determination (TMD) is a document that outlines the target market a product has been designed for. Find the TMDs at australiansuper.com/TMD. 

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