Single retirees with $500,000 in assets can still get the pension. Here's how much

So, you've put in a lifetime of work and it's time to hang up your boots.

You've got $200,000 worth of ASX shares, $50,000 in cash savings, and $250,000 in superannuation.

How does your financial future look in retirement?

Let's do some numbers.

The joy of passive income

If we assume the average FY26 dividend yield of 4.23%, your ASX shares will deliver $8,460 in annual passive income.

Your cash savings should be earning about 5.5% these days, so that will bring in another $2,750 per year.

Let's assume your super is in a typical balanced strategy.

Balanced options delivered an average 7.6% return in FY26, according to Chant West, so let's base our assumptions on that.

A 7.6% return on $250,000 would give you $19,000 in income and capital growth, which you can withdraw if you wish.

Altogether, that gives you about $30,210 in passive income per year to fund your retirement.

According to Australia's Retirement Standard, that's not enough.

A 'comfortable' retirement currently costs $56,166 for single retirees who own their own homes.

A 'modest' retirement costs $36,548 per year for single homeowners, or $51,418 per year for non-homeowners.

So, you're going to need the age pension, and the good news is you qualify for it.

Australians born on or after 1 January 1957 are eligible for the pension at age 67.

The full age pension for single retirees is $1,237.70 per fortnight.

Means testing determines how much pension you are entitled to receive with $500,000 in assets.

Let's do the maths.

Pension means testing: Assets

Under the assets test, your home — if you own one — doesn't count.

Therefore, we're using $500,000 as your total asset base.

If you're a homeowner, you qualify for a part-pension.

If you're a non-homeowner, you're entitled to the full pension.

Now, we move on to the income test.

Pension means testing: Income

Your actual investment income of $30,210 has no relevance to the pension income test.

Instead, Centrelink applies deeming rates to determine an assumed level of income on most assets except rental properties.

This makes life much simpler, and deeming rates remain generously low, so this works in your favour.

The lower deeming rate for the first $66,800 worth of assets for singles is 1.75%.

Passive income above this amount is deemed to have earned 3.75%.

This is much lower than the 7.6% return on your super, the 5.5% earned on your savings, and your 4.2% dividend yield.

On $500,000 of assets, your deemed income is $670 per fortnight ($17,414 annual).

Under this test, you qualify for a part-pension.

How much pension will you get?

With $500,000 in assets, single retirees qualify for at least a part-pension under both tests.

How much you get hinges on which test entitles you to the lowest amount of pension.

Here are the results.

Single homeowners

Under the assets test, your age pension entitlement is $736.70 per fortnight.

Under the income test, your entitlement is $1,015.70 per fortnight.

Centrelink pays the lower of the two, so you'd receive $736.70 per fortnight or $19,154.20 annually.

Single non-homeowners

Under the assets test, your age pension entitlement is $1,237.70 per fortnight.

Under the income test, your entitlement is $1,015.70 per fortnight.

So, you'd receive $1,015.70 per fortnight or $26,408.20 annually.

Is this enough to fund your retirement?

To re-cap, a 'modest' retirement costs $36,548 per year for single homeowners, or $51,418 per year for non-homeowners.

So, you would receive enough pension on top of your $30,210 passive income to afford a modest retirement lifestyle.

The post Single retirees with $500,000 in assets can still get the pension. Here's how much appeared first on The Motley Fool Australia.

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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