Secure Retirement Income: A Retiree's Guide to Term Deposits

Retirement and Capital Security

After decades of working, your retirement savings represent a lifetime of effort. Protecting that capital while generating reliable income is the foundation of a secure retirement.

Why Retirees Choose Term Deposits

Government-backed term deposits address retirees' key concerns:

• Capital guarantee: Your principal is 100% protected
• Predictable income: Know exactly what you'll receive and when
• Government backing: Up to $250,000 protected per institution
• No market stress: No need to watch share prices daily

Creating a Retirement Income Stream

Structure your deposits for regular income:

• Monthly interest: Receive payments every month for living expenses
• Quarterly payments: Align with pension payments
• Laddered maturities: Stagger terms for regular access to capital

Sample Income Calculation

For $400,000 in retirement savings at 7.5% P.A.:

• Annual interest: $30,000
• Monthly income: $2,500
• Plus Age Pension: Additional $24,000+ per year
• Combined: $54,000+ annual income, capital preserved

Tax Considerations for Retirees

Interest is assessable income, but retirees often benefit from:

• Lower marginal tax rates after ceasing work
• Senior Australians and Pensioners Tax Offset (SAPTO)
• Tax-free threshold benefits

Centrelink Deeming Rules

Term deposits are assessed under deeming rules for Age Pension:

• First $60,400 (single) deemed at 0.25%
• Balance deemed at 2.25%
• Actual interest rate doesn't affect pension
• Higher rates = more income with same pension impact

The Retirement Sweet Spot

Current high interest rates combined with government protection create an ideal environment for retirees. Earn strong returns without risking the capital you've spent a lifetime building.