Optimise your future pension before retirement

TL;DR

Learn strategies to maximize age pension payments, including gifting assets, utilizing superannuation in accumulation phase, upgrading or renovating the home, and considering small gifts or funeral bond investments.

Transcript

g'day and welcome to this week's video my name is ashley rowan and i'm a financial planner with consortium profit wealth in today's video we're going to be looking at strategies and examples to best prepare yourself for a future age pension payment so if the age pension is going to make up a big part of your retirement income needs obviously in ret... Read More

Key Insights

• 🤕 The age pension eligibility age is 67, and implementing strategies before this date can help maximize pension payments.
• ☠️ The assets test allows for a certain exemption and a reduction rate for every thousand dollars over the threshold.
• ☠️ The income test allows for a certain exemption and a reduction rate for every dollar over the threshold.
• 💝 Gifting assets, utilizing superannuation in accumulation phase, upgrading or renovating the home, and considering small gifts or funeral bonds can all impact age pension payments.
• 🤕 Farm succession planning is an important consideration for maximizing age pension payments.
• 🤕 Different strategies may be beneficial depending on individual circumstances, such as age differences between spouses.
• 🚟 Consulting a financial advisor is recommended to assess which strategies will improve one's pension situation.

Questions & Answers

Q: How can gifting assets help in maximizing age pension payments?

Gifting assets valued higher than $10,000 in any one transaction can be considered a deprived asset and can boost pension payments. This strategy is especially relevant for farm succession planning.

Q: How can utilizing superannuation in accumulation phase benefit age pension payments?

By bringing funds out of a spouse's superannuation and reinvesting them in the name of the younger spouse, it is possible to increase pension payments until the younger spouse reaches age 67. This strategy is effective when there is an age difference between spouses.

Q: How can upgrading or renovating the home impact age pension payments?

Homeowners can reinvest funds back into their house or purchase a more expensive house, thereby moving more funds into an exempt area. This can result in higher pension payments.

Q: Are there other strategies to consider for maximizing age pension payments?

Yes, other strategies include small gifting of $10,000 per financial year and setting up funeral bond investments. Funeral bond investments can be exempted up to $13,500 each and offer flexibility in terms of use.

Summary & Key Takeaways

• The age pension eligibility age is 67, and it is important to implement strategies prior to that date to maximize pension payments.

• The assets test allows a single homeowner to have their house exempted and up to approximately $270,000 in assets before the pension payments start to decrease.

• The income test allows a single person to earn up to $178 per fortnight before the pension starts to decrease.