Skip to content

How Buying Caravans, Boats, and Other Lifestyle Assets Can Affect Your Income in Retirement

How Buying Caravans, Boats, and Other Lifestyle Assets Can Affect Your Income in Retirement

As you enter your 60s, thinking about enjoying your retirement is natural. Many Australians consider buying caravans, boats, or other lifestyle assets to make the most of their golden years.

However, it’s important to understand how these purchases can impact your retirement income, especially regarding the Australian pension rules.

Understanding the Assets Test

In Australia, your pension is calculated based on the highest of an “assets test” and an “income test”. Your potential pension payments are calculated for both tests and the lower of the tests determines your pension.

This test looks at the value of everything you own, except your primary home, and determines how much pension you can receive. Lifestyle assets like caravans and boats are included in this test.

Assets That Don’t Generate Income

Lifestyle assets such as caravans and boats are enjoyable and provide great experiences, but they do not generate income.

This is important because while they count towards your assets, they don’t help you financially. For example, if you spend a large sum of money on a caravan, that money is now tied up in something that won’t provide any income.

In other words, your income is reduced because the money you spent on your boat or caravan can’t be invested, but your assets still remain high.

The Impact on Your Pension

When you buy expensive lifestyle assets, you are maintaining your total assets.

This might reduce your pension payments, depending on the total value of your assets.

The more you spend on these items, the less you have available to invest in income-generating assets, such as shares or managed funds through your superannuation.

Lost Investment Opportunities

One of the key issues with spending a lot on lifestyle assets is the lost opportunity to invest that money.

If you invest your money in shares or other income-producing assets, you can earn returns that can help support you in retirement.

For example, if you buy shares with your savings, those shares can pay dividends, which is like getting paid regularly just for owning them.

Making Smart Financial Choices

While it’s tempting to buy a caravan or boat, it’s crucial to think about how this affects your long-term financial health. Here are some tips to consider:

  • Assess Your Financial Situation: Before making any big purchases, review your finances. See how much you have and how it affects your pension.
  • Consider Your Income Needs: Think about how much money you need to live comfortably in retirement. Ensure you have enough income-generating assets to meet your needs.
  • Talk to a Financial Advisor: A financial advisor can help you understand how big purchases will impact your pension and suggest ways to maximise your entitlements.


Buying caravans, boats, and other lifestyle assets can provide great enjoyment, but they also come with financial considerations.

These assets are included in the assets test for your pension and do not generate income. By spending wisely and considering investments that produce returns, you can ensure a more financially secure retirement while still enjoying your lifestyle.

Always consider seeking advice from a financial professional to make the best decisions for your retirement.

Secure your financial future today!