Last week we promised an update on deeming thresholds. Along with the main income and asset threshold changes on 1 July the deeming thresholds will also be increased. This benefits all those whose assets are deemed to earn income by Centrelink. We have reported previously on the rates which remain frozen until 1 July 2025, but an increase to thresholds will be good news for many retirees.
Well that’s a provocative headline. It was a question posed in a recent article in the Financial Review. The full headline was… “Baby Boomers are loaded. Why are they so stingy?” Now like most newspaper headlines they are designed to get a reaction and encourage people to read. And to be fair this article certainly didn’t make the case all baby boomers were rich, nor that they were all stingy. But it did highlight some really interesting points.
Firstly there are lots of baby boomers. And as they have been retiring this wave of boomers has major economic consequences. They are leaving the workforce depriving us of experience,skills and labour. But instead of working and building a nest egg there is also an expectation that once retired they will spend more than they earn and gradually reduce their savings. This would pump more money into the economy, potentially increasing inflation but also economic growth and the growth of wages for younger workers.
This hasn’t actually been happening. Recent evidence from around the world including Italy, Japan and the U.S.A indicates boomers are very often savers not spenders. Many die wealthier than when they retired.
July 1. It’s one of my favourite times of year. We have passed the winter solstice and the days, albeit still dark and cold (at least down south), are slowly getting longer. And for the financial nerd part of me it is also the start of a new financial year. For some people that is more work and tax returns. But for those on, or nearly on, the Age Pension it often means more money in your pocket.
This year is no different. The new Age Pension thresholds have been announced which means some people will get a little more money while some that didn’t previously qualify might just scrape in. And just scraping in by a dollar can mean a lot as you can qualify for the pension and energy supplements as well as the Pension Concession card.