Retirees and those nearing retirement with large superannuation balances and other assets and investments will likely be affected by new pension asset test changes, which passed Parliament on 22 June, 2015.
Liberum Financial, advise that under the new legislation, wealthy couples who own their own home and have over $823,000 in assets (not including the family home) will see their pension entitlements reduced or cut entirely.
Every quarter, the Association of Superannuation Funds of Australia (ASFA) research and publish their findings detailing the cost of living in retirement. The survey benchmarks the annual budget needed by Australians who own their home to fund a comfortable or modest standard of living in retirement. It provides detailed budgets of what singles and couples would need to spend to support their chosen lifestyle.
According to Liberum Financial, the costs associated with aged care should be factored in to your overall financial plan, regardless of your age today.
Some people may prefer to ease into retirement gradually by cutting back working hours and drawing some income from their super before they fully retire. They can do this by utilising the ‘transition to retirement’ strategy.
Family succession planning can be complex. None the less it’s important to take action and there are a range of matters that you will need to work through to not just achieve financial outcomes but also to establish the legacy you wish to leave for the next generation.