Written

For

The

Australian

-

Retirees

living

like

kings

on

the

age

pension

using

this

little-known

rule

What if I told you that the age pension alone — often dismissed as barely enough to scrape by — could fund a lifestyle that would place you in the top 25 per cent of income earners in Bali, Bangkok or Manila? It sounds far-fetched, but a growing number of Australian retirees are proving it can be done.

Here's the maths that caught my attention. A single retiree gets about $2,500 a month from Centrelink, and couples $3,750. In much of Southeast Asia, a one-bedroom apartment rents for $500 to $1,000 a month, with living expenses of another $800 to $1,000. That leaves plenty of breathing room — and remember, the average local income in these places sits between $500 and $1,500 a month.

The kicker is a little-known rule in our social security laws. Provided you've been an Australian resident for at least 35 years between the ages of 17 and 67, you can pack up, move overseas permanently, and still collect your fortnightly age pension. Yes, your concession card and some minor supplements drop off after six weeks abroad, but the core payment keeps rolling in.

Why does this matter? Because ASFA reckons singles need around $53,000 a year and couples $75,000 for a "comfortable" retirement — implying nest eggs of $750,000 and $1.05m respectively. Yet the average super balance is about $300,000 for men and $200,000 for women. Most Australians simply won't hit the comfortable benchmark on home soil.

Add in the fact that 80 per cent of retirees own their home outright — sell up, net $500,000, invest it into super at 7 per cent, and that's another $35,000 a year on top of the pension.

I'm not suggesting everyone should sell up and ship out. Leaving family, friends and Australia's healthcare behind is a significant trade-off. But for those short on super and long on adventure, this loophole is a legitimate strategy worth understanding.