Do the research on retirement pensions
Retirement pensions are important to ensure you can live comfortably and continue your lifestyle after retirement. You may receive a part retirement pension from the government in addition to your superannuation payout when you retire. If you receive super, ensure you choose your provider carefully. This is where a trusted financial planner may be able to assist.
1. Requirements may change on a yearly basis
The Age Pension is an amount you receive from the government when you reach retirement age, subject to conditions.
The conditions a person needs to meet in order to be eligible for the government funded retirement pension include age and residence requirements.
In the 2010 Budget, the Government proposed to change the qualifying age at which a person can access the pension. According to www.centrelink.gov.au, from 1 July 2017, the qualifying age for the retirement pension will increase from 65 years old to 65.5 years old. Every two years following that, it will increase by six months until 1 July 2023 when the age at which a person qualifies for the pension is 67. Different ages apply for people born before this date. For example, a person born from 1 January 1949 to 30 June 1952 will be able to access the pension when they turn 65. For people born before this date, the age at which they could access the pension is determined by age and gender.
2. Do you pass the tests?
There are also income and assets tests to determine eligibility for receipt of a government funded retirement pension. The payment rate as of 1 July 2010 for a single is $644.20 per fortnight and for a couple is $485.60 each per fortnight. These amounts can change each year following the May Federal Budget, so keep an eye on it. A person must also be an Australian resident to claim the age pension, and must meet the 10-year qualifying Australian residence requirements, except in a few circumstances according to Centrelink.
People on the age pension are also eligible for the Pensioner Concession card, which, Centrelink says, may entitle holders to bulk billing for doctors’ appointments as well as cheaper fares on public transport and on motor vehicle registration and so on.
3. Choose your super fund carefully
When it comes to super funds, choose carefully. Industry super funds argue that because they don’t pay commissions to financial advisers and their fees are lower, their returns will be greater in the long run. Retail master trusts pay commissions to advisers and this may cause a conflict of interest, that is, the adviser may choose one super fund over another because it pays a higher commission and not because it’s in your best interests. Before settling on a super fund, make sure you do the research.
Consider seeing a trusted financial adviser for more information about retirement plans and government or privately funded retirement pensions.
Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.
Published on: Wednesday, August 18, 2010blog comments powered by Disqus