Retirement Planning

Retirement Planning

Retirement Planning

We are living longer and staying more active in retirement means that we need more to support ourselves in retirement. Planning for your retirement sooner will provide you with more opportunities to reach your retirement goals with more ease and more opportunity for better results.

We are living longer and staying more active in retirement means that we need more to support ourselves in retirement.

Planning for your retirement sooner will provide you with more opportunities to reach your retirement goals with more ease and more opportunity for better results.
 

Now is the time to consider

There are many factors to consider when planning for your retirement such as the lifestyle that you wish to have, where you want to live, how much income your will need and what is the best way for you to transition into retirement.
 

Changing places

As you get closer to retirement and your dependent children have left home, you may consider moving home for lifestyle reasons, for example, you may want a sea change or move into something smaller.

From a retirement planning perspective, it may be more beneficial to make the move before stopping work altogether. By downsizing your home or moving to a less expensive area may provide substantial capital which could be invested into superannuation to provide a significant boost to your retirement savings.
 

What are your plans for work?

How long do you wish to work is up to you. The longer you work will provide you with more time to accumulate your retirement savings.

This does not necessarily mean that you have to work full-time, you may wish to commence part-time work and ease into retirement. A transition to retirement strategy may also assist you in boosting your retirement savings.

What is the best time to retire?

Mark Welch discusses retirement before age 60 and tax planning considerations.

There is essentially two ways to work out when to retire. You can decide when you wish to retire and work out how to fund it and potentially adjust your retirement lifestyle or you can work out how much you will need to fund your retirement lifestyle and plan your retirement.

You will need to meet a condition of release to access your superannuation benefits. For most people this means reaching your preservation age.

 

VIEW KBIQ TV

 

Asset test limits

Most pensions, allowances and concession cards have asset limits. These limits determine if your assets will affect your payment rate.

The asset test limits are updated in January, March, July and September each year.

Assets test limits for allowances and Parenting Payment Single

Family situation

For homeowners assets must be less than

For non-homeowners assets must be less than

Single

$253,750

$456,750

Couple combined

$380,500

$583,500

One partner eligible, combined assets

$380,500

$583,500

 

Assets test threshold for full pension

Family situation

For homeowners full pension assets must be less than

For non-homeowners full pension assets must be less than

Single

$253,750

$456,750

Couple combined

$380,500

$583,500

Illness separated couple combined

$380,500

$583,500

One partner eligible, combined assets

$380,500

$583,500

 

Assets test limits for part pensions

Family situation

For homeowners part pension assets must be less than

For non-homeowners part pension assets must be less than

Single

$552,000

$755,000

Couple combined

$830,000

$1,033,000

Illness separated couple combined

$977,000

$1,80,000

One partner eligible, combined assets

$830,000

$1,033,000

 

Trasitional

Family situation

For homeowners part pension assets must be less than

For non-homeowners part pension assets must be less than

Single

$504,750

$707,750

Couple combined

$785,500

$988,500

Illness separated couple combined

$882,500

$1,085,500

One partner eligible, combined assets

$785,500

$988,500

 

 

Assets test for Disability Support Pension under 21 with no children

Family situation

For homeowners part pension assets must be less than

For non-homeowners part pension assets must be less than

16 to 17 years, single dependent

$379,250

$582,250

18 to 20 years, single dependent

$395,750

$598,750

16 to 20 years, single independent

$446,250

$649,250

16 to 20 years, couple combined

$763,500

$966,500

 

The rate of payment is calculated under both the income and assets tests. The results with the lowest rate, or nil rate, will apply.

Limits will increase if Rent Assistance is paid with your allowance or pension.

 

Income Test Limits

Single, couple combined, illness separated (couple combined) pensioners

Single

Fortnightly income

up to $168

over $168

Reduction in payment

none - full payment

50 cents for each dollar over $168

 

Couple combined, illness separated (couple combined)

Fortnightly income

up to $300

over $300

Reduction in payment

none - full payment

50 cents for each dollar over $300 (combined)

 

Transitional rate pensioners


Single

Fortnightly income

up to $164

over $164

Reduction in payment

none - full payment

40 cents for each dollar over $164

 

Couple combined, illness separated (couple combined)

Fortnightly income

up to $292

over $292

Reduction in payment

none - full payment

40 cents for each dollar over $292 (combined)


Allowable income is increased by up to $24.60 per fortnight for each dependent child.
 

Disability Support Pension

Single

  • Under 21, single, no children, 16-17 years (at home)
  • Under 21, single, no children, 18-20 years (at home)
  • Under 21, single, no children, 16-20 years (independent)

Fortnightly income

up to $168

over $168

Reduction in payment

none - full payment

50 cents for each dollar over $168


Couple combined

  • Under 21, member of a couple, no children, under 18 years
  • Under 21, member of a couple, no children, 18-20 years

Fortnightly income

up to $300

over $300

Reduction in payment

none - full payment

50 cents for each dollar over $300


Single, saved status

  • Under 21, single, no children, saved status, 16-17 years (at home)
  • Under 21, single, no children, saved status, 18-20 years (at home)
  • Under 21, single, no children, saved status, 16-20 years (independent)

Fortnightly income

up to $168

over $168

Reduction in payment

none - full payment

40 cents for each dollar over $168


Couple combined, saved status

Fortnightly income

up to $300

over $300

Reduction in payment

none - full payment

40 cents for each dollar over $300


Employment income is subject to a Work Bonus for eligible pensioners over age pension age.
 

Cut-off points

If you earn enough income your payment reduces to $0, this is called the cut-off point. This table outlines the cut-off point for each family situation.

The amount of income you can earn before your payment reduces to $0 may be higher if you are eligible for Rent Assistance.
 

Disability Support Pension

If you are

payment reduces to $0 once your fortnightly income reaches this amount

Single

$1,956.80

Couple (combined)

$2,996.80

Illness separated (couple combined)

$3,877.60

Under 21, single, no children, 16-17 years (at home)

$920.60

Under 21, single, no children, 18-20 years (at home)

$1,019.20

Under 21, single, no children, 16-20 years (independent)

$1,323.00

Under 21, member of a couple, no children, 16-20 years

$2,597.60

 

Other pensions

  • Age Pension
  • Wife Pension
  • Widow B Pension
  • Bereavement Allowance
  • Carer Payment (caring for a person 16 years or over)
  • Carer Payment (caring for a child under 16 years)

If you are

payment reduces to $0 once your fortnightly income reaches this amount

Single

$1,956.80*

Couple(combined)

$2,996.80*

Illness separated (couple combined)

$3,877.60*

Transitional rate pensioners – Single

$2,049.00

Transitional rate pensioners – Couple (combined)

$3,1335.00

Transitional rate pensioners – Illness separated (couple combined)

$4,062.00


*These amounts maybe lower if you are a non-resident of Australia.

 

Preservation table

The table below illustrates what your preservation age is based on your date of birth.


Date of Birth

Preservation Age

Before 1 July 1960

55

01 July 1960 – 30 June 1961

56

01 July 1961– 30 June 1962

57

01 July 1962 – 30 June 1963

58

01 July 1963 – 30 June 1964

59

From 1 July 1964

60


Eligibility for the government pension is also based on when you are born. Currently accessible from age 65 for men and 64.5 for women, this age is gradually increasing to age 67 for both men and women born in 1957 or later.
 

How can a financial planner help?

Seeking expert advice from a financial planner is an important part of your preparation for retirement. Consulting with a financial planner can help you:

  • Prepare for your retirement

  • Ease into retirement

  • Minimise the tax that you pay

  • Maximise your Centrelink entitlements

  • Maximise your retirement savings