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Client Profile
Jessica is a Gold State Super member with 30 years of service. Her final benefit is calculated using the average of her last five years of salary. She earns $120,000 annually but is considering reducing her hours in the last few years before retirement.
- Name: Jessica
- Age: 57
- Employment Income: $120,000
The Risk
If Jessica drops to part-time and her salary falls to $80,000 for the last three years, her average salary becomes:
Average Salary = $120,000 + $120,000 + $80,000 + $80,000 + $80,000 = $96,000
This reduces her final benefit significantly because Gold State Super uses this average in its formula.
The Strategy
Profusion Planning advised Jessica to maintain her full-time salary for the last five years where possible, consider alternatives such as leave without pay or salary packaging instead of reducing her hours, and plan transition-to-retirement strategies that preserve her benefit while supporting her lifestyle needs.
The Result
By maintaining her salary, her average remains $120,000 instead of $96,000, her final benefit increases by $72,000 compared to the reduced-salary scenario, and she avoids a permanent reduction in her defined benefit.
Why This Matters
Gold State Super is a defined benefit scheme, so salary decisions near retirement have a direct and lasting impact on your final payout. Without advice, members risk losing tens of thousands of dollars.
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