Can you increase your income and entitlements in retirement?
Last week we covered a couple of simple things people might want to consider to improve their Age Pension entitlements. Namely, paying off a mortgage, renovating the family home and gifting. Here are some other things that could be considered if you are looking to increase your income in retirement.
Don’t over value your assets and update them regularly
This is a common mistake. For insurance purposes, you might want to value a sofa at replacement cost but for your Age Pension, you should be thinking about what you might get if you had to sell it in a garage sale. Depending on your circumstances every $10,000 in assets could cost you up to $780 in pension so don’t overvalue them. Over time your assets often decline in value as well so it pays to keep Centrelink up to date about this. That 20 year old Corolla is more likely to decline in value than go up.
Pre pay some lump sum expenses
You can pre pay some expenses up to one year in advance. Again depending on your circumstance pre paying that dream overseas holiday costing $10,000 could see your pension increase by $780 that year.
Annuities
Annuities are a type of financial product that can provide a secure or guaranteed income over set periods or for the rest of your life. From the 1st July 2019 the Government made some changes to how lifetime annuities (uses superannuation monies) are treated for Centrelink purposes. Essentially only 60% of a lifetime annuity asset value and the income paid is assessed. Annuities can be quite complex and are certainly not for everyone so seek financial advice before considering one of these.
Part time work
If you are still able to do so you can earn up to $300 a fortnight before it counts towards the income test
Check out any other payments or supplements
Centrelink has lots of other payments that you might be eligible to receive. There are over 50 of them so it is worth checking out. Examples can include the Care payments or allowances, family tax benefits and mobility allowances.
Speaking of other payments and allowances
There are 2 stimulus payments of $250 each being made in the coming weeks to Age Pensioners or Commonwealth Health Card holders. To be eligible for the first payment you need to have submitted your application by November 27th. 2020. You can check your eligibility here
This article is provided by Retirement Essentials Representative Number: 001260855. We are an authorised representative of SuperEd Pty Ltd ABN 88 118 480 907 AFSL #468859. This information is not intended as financial product advice, legal advice or taxation advice. It does not take into account your personal situation, goals or needs and you should assess your own financial situation, consider if the information is suitable for you and ensure you read the relevant Product Disclosure Statement (PDS) if you choose to make any changes to your financial situation. It is always advisable to consult a financial adviser before making financial decisions.
