The Australian Pension system has been set up in such a way that the more you earn, the less pension you qualify for. The same applies to assets whereby people with more assets are more likely to receive lower pensions. That said, it is important to learn tips that can help maximise pension entitlements.
You Don’t Want To Miss This: The Best Investment Strategy For Retirement
7 Tips on Maximising Age Pensions
Update Asset Values Regularly
Updating the value of personal assets such as vehicles, bank accounts or home contents is fundamental to maximising pension. This is because a majority of assets depreciate over time hence increasing pension levels. Contrary to common assumptions, the government cannot update asset values and individuals have to do so themselves. It is important to ensure you are not overstating the values of cars, contents etc as this will impact negatively on your entitlements
Pay Down Personal Debt
One advantage of paying down debt is the saving on interest charges. Additionally, it can increase pension payments after retirement. This is because by paying off personal debt, the amount of assessable assets is reduced. This automatically increases the amount of pension one qualifies for.
Utilise the Gifting Strategy
One form of expense that can reduce a person’s assessable assets and income is gifts. Even though there are limitations as to the amounts of gifts deductible, it is a sure way to increase pensions. The only trick is to strategise the gifts in such a way that they qualify for the deduction.
Investment into a lifetime annuity increases the amount of money retained as income. This increases the amount of age pension that a person qualifies for. A Financial Planner can show you projections of how an annuity can potentially increase your pension entitlements
Utilise having a Younger Spouse
Funds held in superannuation do not count as an asset if someone is under age pension age. Therefore moving funds to a younger spouse can help to increase Age Pension entitlements for the pension recipient.
Strategise on Investment Loans
Any loans secured against a principal home should be avoided. This is because they are exempt from assessment and cannot be used to increase age pensions.
Purchase a Funeral Bond
Prepaying for personal funeral expenses is an easy way to reduce the value of assessable assets to increase age pension whilst also ensuring your wishes will be adhered to. Apart from that, you will also love to know about: Does your life coverage cover funeral costs?
Getting the right financial guidance is the first step to increasing your age pension. Call Precept Financial Services today and book a consultation so we can show you how we can help boost your entitlements.
Please see our Financial Services Guide for more information.
Precept Financial Services Pty Ltd (ACN 140 538 147) as trustee for SF Unit Trust trading as Precept Financial Services is an authorised representative of Charter Financial Planning, Australian Financial Services Licensee and Australian Credit Licensee No. 234665