Comments

  1. Pam Penno says:

    Hi Regan, After reading comments today I would like some help. My Husband is comeing up 65 and still working(ready to retire) and I am 60 not working(ill health) with reasonable assets and a private super fund having rolled over supers into it.
    We need to set up assets so he can get a pension when he retires. We live in Tasmania

  2. Hi Trevor,
    Thanks for your interest =)
    The first example (John) has no employement income but I have not provided any examples of a couple that have completely retired.
    If you would like me to go through your specific circumstances I’ll be more than happy to go through the calculations and look at maximising your overall income. There are plenty of strategies that we can look at with their being an age gap between yourself and your wife (especially with your wife being below age pension age).
    If you would like to send me an email my address is regan.welburn@humanservices.gov.au
    I am a representative of the Financial Information Service at Centrelink which provides free financial education to all Australians. I’m happy to talk to you over the phone or even see you face to face if you are in the South Eastern Suburbs of Victoria…if not I can get you in touch with your local officer!

  3. Trevor Dunkerley says:

    When ever there is an example of i.e. how much pension can you get.There is always someone
    still earning a wage.
    We are a average couple 65 my wife 61 we have no wage comming in we have a reasonable asset
    base.
    A lot of examples you give there are large ammounts in super(remember when compulsory came in
    people in our age have only had a short time to build our super.)

  4. Comletely agree with you Jon.
    Most couples that I see currently need around $40,000pa to live off as long as they own their own home.
    That is quite achievable just by having $200,000 in an account based pension.
    A couple that has $200K in an account based pension drawing 6% annual income will take home $12,000pa tax free along with the maximum rate of age pension $29,354pa (as long as their combined assets don’t exceed $265,000).
    That will give them a tax free take home pay of $41,354pa.
    Based on your investment strategy in the article recently published the $200,000 should go a long way to outlasting them!
    Cheers

  5. Jon Kalkman says:

    On the guest contributor section of this website, I point out how $1 million can last longer than you by using an account based pension from a SMSF where the asset allocation is mainly Australian shares with imputation credits.

    I have a friend who receives a part age pension from Centrelink which means he satisfies either the income or assets tests. He also use an account based pension from his SMSF and that means he benefits from the advantages listed above.

    Even though he is on the age pension, he also uses my strategy where his SMSF is mainly based on Australian shares with imputation credits. This brings him a number of benefits.

    1. He says he can achieve about 8% yield on his SMSF but his part age pension is determined by his deemed income not his actual income. So any SMSF income he gets above the deeming rate is a bonus and it does not affect his Centrelink pension.

    2. Because he has the income security of both Centrelink and the predictable income from dividends, he can afford to take on more volatility risk. That means he can afford to have an asset allocation with a higher proportion devoted to growth assets, in this case Australian shares. So he gets high income from growth asset. He gets the best of both worlds.

    3. Because his age pension is set by the assets test, when the share market has a periodic downturn, the market value of his assets (his SMSF shares) declines so he is entitled to a higher Centrelink pension, but his dividends from his SMSF are largely unaffected. So a market downturn actually means more income for him.. His Centrelink pension acts as a huge shock absorber to the volatility fo the share market..

    He reckons he has the opposite problem. Because his income comes from a growth asset, he is concerned that the assets in his SMSF may grow to the point where he is no longer eligible for the Centrelink pension. I tell him that is a high quality problem to have.

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