Kaye Fallick

Kaye is a retirement commentator and coach, with 25 years’ experience writing about retirement income. She has authored two books on life stage changes – Get a New Life and What Next? – and enjoys regular radio and podcast appearances. Her favourite mission is to offer plain English explanations of complex rules so that all retirees can benefit. She is based in Melbourne but enjoys escaping to Italy whenever possible.
Back to basics: How the income test works

Back to basics: How the income test works

by |

Last week we went back to basics by explaining how the assets test works. 

This week we share the ‘second-part’ of this important retirement income update –an explanation of the way the income test is used to assess Age Pension eligibility.

What is the income test?

The income test is one half of the means test for the Age Pension. Applicants must pass both parts of the means test, i.e. both the income and the assets test. If either one of these aspects -income or assets – results in a lower Age Pension entitlement, then that is the test which will determine how much you will be paid.

What does this mean?

Let’s say, under the income test, you qualify for a modest part-Age Pension payment of $200 per fortnight (plus supplements). 

But using the assets test, you qualify for payments of $292 per fortnight (plus supplements). Your actual Age Pension will be paid at the lower rate of $200, based upon the income test results.

Funeral gardening: Time to get started!

Funeral gardening: Time to get started!

by |

Most of us are really squeamish about the word ‘death’ – we run a mile from it. Similarly with the term ‘funeral’ – it’s difficult to bring ourselves to read articles about planning for our own demise. We’re more interested in living, than dying, right?

But there is a compelling reason why we do need to think ahead and plan.

And that’s because most of us would walk over burning coals for our loved ones – so leaving them with a mess is not how we want them to remember us.

That may be a reason for the increasing popularity of TV shows such as The Gentle Art of Swedish Death Cleaning. While this program concentrates more on the emotional and clutter clearing aspect of leaving things in good order, it does prime your mind about your legacy, be it material, financial or spiritual.

Important things you may not know about pension withdrawals

Important things you may not know about pension withdrawals

by |

Minimum pension withdrawals are a fairly straightforward aspect of moving from the saving to spending phase of retirement. Or they should be. But in recent adviser consultations, Retirement Essentials members have revealed a degree of concern and confusion about what is usually their main income stream. Today we explain how these withdrawals work, what the government requires you to do – and some of the options you have to maximise your overall income. You may be surprised at the flexibility you have and how, by reviewing your drawdown settings, you can improve your overall financial outcome.

Let’s start with the ‘what’…

What are minimum drawdown rates?

When you reach Preservation Age, you are able to access your super. The majority of Australians will do so by ‘rolling’ all or part of their savings into an Account-Based Pensions (ABP). This decumulation account pays no tax. But regardless of whether you are paying yourself from an ABP or your own Self-Managed Super fund (SMSF) you are required by the government to withdraw a minimum amount every year. The rate depends upon your age.