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Changes to asset testing for pensioners: what you need to know

If you are a retiree or pre-retiree, now is the time to review your strategy, ahead of the Government's proposed changes to asset test thresholds due to take effect in 2017. So, what action can you take today to help protect your pension tomorrow?

The Federal Budget signalled changes to the pension asset test thresholds. As of 1 January 2017, the threshold will be cut to $823,000 for couples and $547,000 for single home owners. These changes are significant, when compared with the current pension asset test thresholds which are calculated at $1.15million for couples (with their own residence and other investments) and $775,000 for single home owners.

If you are among the 91,000 retires in line to lose your part pension and become a fully self-funded retiree, or perhaps you are set to be one of the 235,000 facing a reduced pension; seeking our professional financial advice now may bring to light a range of strategies for re-allocating your assets within a tailored financial plan designed to unlock an income stream appropriate to realising the retirement lifestyle of your choosing.

Given the changes are not due to take effect until 2017, you have the benefit of a lengthy timeframe in which to review your situation and a range of scenarios that may be appropriate to your set of circumstances.

Much has been made of the announcement that ‘retirees adversely affected by changes to the age pension have been guaranteed the Commonwealth Seniors Health Card or Health Care Card’ Gold has a long-held specialisation in the area of retirement planning and, when the time comes, can act as your central coordinator to help you navigate the complexities of securing your entitlements.

Further, ‘over 170,000 pensioners stand to receive an additional $30 per fortnight with the asset test limits for the full age pension set to increase to $250,000 from $202,000 for single home owners and $375,000 from $286,500 for couples who own their own home.

Whilst access to the pension may be considered a welcome development, have you contemplated the prospect of a retirement income stream not dependent upon Governmental entitlements? We are well placed to open up these types of discussions, well ahead of your exit from the workforce. We use real life scenarios to help you visualise the types of strategies that may be appropriate to your needs.

If you would like to discuss a tailor-made retirement plan suitable for your set of circumstances, please contact us on (02) 6041 8244.

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