It's a rhetorical question actually ... the article is posted for information only - not for political debate on the merit or otherwise of the government decision.
Cheers - John
[edit: one link changed to a 'subscription' link GRRR!]
-- Edited by rockylizard on Sunday 16th of October 2016 09:36:34 AM
Happywanderer said
11:15 AM Oct 16, 2016
One positive for not having any assets or investments. Mine won't change.
aussie_paul said
12:23 PM Oct 16, 2016
Happywanderer wrote:
One positive for not having any assets or investments. Mine won't change.
First time in my life I am glad I don't have heaps of assets or cash. lol
which I think is the calculator that the above item refers to.
-- Edited by LLD on Sunday 16th of October 2016 01:25:57 PM
LLD said
01:58 PM Oct 16, 2016
Just read the implications of this, I will lose out here due to the $3.00 reduction rather than $1.50. Instead of dropping by $1.50 for each $1,000 over $296,000, the pension is dropping by $3.00 for each $1,000 over $375,000. There is a point (I think it is probably $595,500) where your current pension will decrease and it's double the decrease of what it used to. Full to no pension is currently spread over $882,000 ($1,178,500 - $296,500) but come 2017 it's spread over $441,000 ($816,000-$375,000).
Now $600,000 in assets (cash, cars, van, household goods) is not a lot for two 60+ people to have accumulated over 80 years of working (and paying tax). Not complaining or tying to make it political, just wondering.
sandgrooper1 said
03:09 PM Oct 16, 2016
LLD,
I agree with your point, you may need to have a spend up to get your assets down to a point whereby you can get your pension back. About the only place money can be invested/not considered re pension asset assessment now is in a nice expensive home of your own.
A work mate/friend of mine has just retired at 58, he will just turn 59 when he is off the books after running out leave entitlements with about 730k and owning his home ,van, cars, motor bikes etc. His perspective is that there was not much incentive to push on further.
He did not consider he would be able to get to a position of being self funded totally by 67(from that point onward till departure from this world) and said he didn't like our job anyway after 30 years so why stay on......now he and his wife are going to travel, relax and enjoy
life without work commitments and pick up a part pension at 67.
His plan is about 45 to 52k a year income. I thought about it and tried to find arguments against his plan but find agree with his thoughts really.
From what I see you either need to be quite wealthy to the point whereby you will not need to claim a pension or plan to erode your assets to a point where by you can access part OAP. I think about 90 to 95% of workers will fit into the latter category.
If the worst happens and you lose your partner then its a whole new set of issues.
If the government wanted to provide an incentive to get the 50 plus group to work on then they, to me, have totally removed it as from what I have worked out you are heavily financially penalised.
Oh well gone off track.
Cheers AL
-- Edited by sandgrooper1 on Sunday 16th of October 2016 03:10:12 PM
LLD said
04:20 PM Oct 16, 2016
Done a lot of "what ifs". Spread sheets are handy.
Do you spend $25,000 on a new car for it to depreciate to $20,000 as you pick it up so you have $5,000 less?
Do you gradually milk you bank accounts of interest bearing money and put the money under the mattress so you can get more pension?
Do you update all your white goods, TVs etc and say they are worth a fraction of what you paid (legitimate but you have to be realistic)?
Not uncommon to totally renovate your house, get all new white goods / electrical goods so as to minimise expenses after retirement. Also, sell down to a new, smaller home or retirement village that offers parking space for a van.
$45-$52K per year is not unrealistic. My income is derived from investments, a now smaller age pension and a capital drawn down. I've just turned 65 (first pension payment last week) and my spreadsheet says I will run out of money at about 90. That was initially without an age pension. However, I have plenty of scope for belt tightening. The bit of pension I do get is a complete bonus as when I took a package at 53, my plan was to be a fully self-funded retiree. The age pension was only ever going to be a bonus. It's really the lower interest rates on term deposits that has caused me to draw on my capital and hence get a pension. Strange thing it happened to my dad and his generation too. In the early 1980s, they all put their retirement cash in 15-17% 10 years term deposits only to re-invest at about 6-7%. Some capital was kept out to top up their interest income and hence qualify for pension as their capital was now less. Caused the govt a bit of a headache in the mid-1990s as suddenly a lot of people's part pensions suddenly became larger.
So the best I can do is go on a SKI trips (Spend Kids Inheritance) until I get a full pension.
Roving-Dutchy said
04:43 PM Oct 16, 2016
I think you will find you cannot depreciate you car as soon as you buy it, there is now awaiting period before you can lower its value with Centrelink.
If you are right on the borderline of the assets test you can gift $10,000 now and another $10,000 each year for up to 3 years to a max of $30,000. At the end of 5 years you can repeat the process again
You can also buy funeral bonds, which I think can be a maximum of $15,000 each which do earn a small amount of interest, Bendigo Bank was one of the suppliers of these bonds.
The above figures may not be correct so best talk to Centrelink, but there are some legal ways to lower your assets, but the best way would be to buy a bigger more expensive house.
LLD said
05:07 PM Oct 16, 2016
Trouble with buying an expensive house you become asset rich, income poor. Something farmers can get caught with on retirement. Having said that, I did buy a more expensive and newer house after retirement but that was really only to get a bigger shed (a man needs even a bigger shed in retirement) and a much lower maintenance house.
My kids can pay for my funeral. I've spent enough on them for them to pay for my final trip. My dad cost me nothing. With a bit of cash in the bank and then 7 weeks of pension and sale of his car to put back in the bank, mum & I gave him a good sendoff. Cheap funeral, big wake. Just what he wanted.
brickies said
05:24 PM Oct 16, 2016
There would be some who wish they were in a position to receive such letter , Why is the grass greener on the other side of the fence , Because it's full of Bull sh-t
bilbyg said
09:00 PM Oct 16, 2016
Struggled to pay the 18% plus mortgage. Now with a bit put away, frugal interest returns. Pensioner couple will be able to have up to $375,000 in assets before pension reduces.
Now the sneaky part. If one loses a partner, one would have to get rid of $125,00 in assets to maintain the pension. Lose a partner, lose assets or lose pension. How cruel can these people be. I suppose this is necessary for their generous pay rises.
The Belmont Bear said
09:13 PM Oct 16, 2016
I decided to retire after taking a redundancy package 18 months ago at the age of 59. I will now be self funded for another 7 years as I won't qualify for an age pension until I reach 67 and I have no intention of claiming unemployment benefits. According to our financial advisor drawing $60K a year we will still have just over $500K (not including our assets incl. house, cars, caravan) when we hit that mark I am going to be really upset if we don't then qualify for for at least a part pension. The other option is that we just sell up, buy a fancy rig and put the money into investment to support our nomadic lifestyle. It would be nice if these guys stopped moving the goalposts.
brickies said
07:46 AM Oct 17, 2016
The more you spend in the next 7 years the more pension the more pension you will get then so have fun in the next 7 years .
Ron-D said
08:26 AM Oct 17, 2016
No wonder this country is so much debt every body expects a free lunch at the taxpayers expense , the cap the government are putting on this is very reasonable an effects hardly any body...
brickies said
08:35 AM Oct 17, 2016
You are so right and some people will get more pension .
baysidetas said
08:37 PM Nov 5, 2016
Selling your house and buying a more expensive one is the wrong thing to do. Agents commissions, selling costs, legal fees, fitting out the new house etc. will cost you many thousands of dollars.
Far smarter to go on an all expenses paid holiday which will probably cost you less than the above costs, will reduce your assets, and if you plan it well may get your assets down below the pension cut-off figure or at least get you a part pension.
Buying a pre paid funeral, the cost of which is not counted in your assets will also work to entitle you to a part or full pension.
Bryan said
09:23 PM Nov 5, 2016
Ron-D wrote:
No wonder this country is so much debt every body expects a free lunch at the taxpayers expense , the cap the government are putting on this is very reasonable an effects hardly any body...
I wonder if they capped their pension as well.
Two sets of rules methinks, one for the powerful and mighty and the other for the guys who put them there.
By the way I don't get a pension. I'm self funded
Retiredatlast said
10:06 PM Nov 5, 2016
What if you have 3 kids weddings to pay for at 10k each in one year ?
Is that a gift or a parent responsibility.
-- Edited by Retiredatlast on Saturday 5th of November 2016 10:07:20 PM
Big Gorilla said
10:39 AM Nov 6, 2016
When I previously lived in Australia, I paid plenty in taxes, so I consider I am entitled to claim the Age Pension. After returning to Australia after 20 years living and working overseas, I returned with a suitcase full of clothes and $20.00 in my pocket. The rest I left behind. Straight to Centrelink and on the Pension. Bit different now, the goal posts have been moved. If you previously lived overseas and return to Australia, you must be back in Country for 2 years before you are eligible to claim the Age Pension. No, I wont get a Xmas letter, maybe one day I'll get one from the Queen if we are both still around !!
Gday...
http://www.news.com.au/national/breaking-news/christmas-wait-to-see-if-pension-to-be-cut/news-story/5a086fb446456bb6304e9d0a243f6339
It's a rhetorical question actually ... the article is posted for information only - not for political debate on the merit or otherwise of the government decision.
Cheers - John
[edit: one link changed to a 'subscription' link GRRR!]
-- Edited by rockylizard on Sunday 16th of October 2016 09:36:34 AM
First time in my life I am glad I don't have heaps of assets or cash. lol
Aussie Paul.
Look at
https://www.humanservices.gov.au/customer/enablers/changes-pension-assets-test
which I think is the calculator that the above item refers to.
-- Edited by LLD on Sunday 16th of October 2016 01:25:57 PM
Now $600,000 in assets (cash, cars, van, household goods) is not a lot for two 60+ people to have accumulated over 80 years of working (and paying tax). Not complaining or tying to make it political, just wondering.
LLD,
I agree with your point, you may need to have a spend up to get your assets down to a point whereby you can get your pension back. About the only place money can be invested/not considered re pension asset assessment now is in a nice expensive home of your own.
A work mate/friend of mine has just retired at 58, he will just turn 59 when he is off the books after running out leave entitlements with about 730k and owning his home ,van, cars, motor bikes etc. His perspective is that there was not much incentive to push on further.
He did not consider he would be able to get to a position of being self funded totally by 67(from that point onward till departure from this world) and said he didn't like our job anyway after 30 years so why stay on......now he and his wife are going to travel, relax and enjoy
life without work commitments and pick up a part pension at 67.
His plan is about 45 to 52k a year income. I thought about it and tried to find arguments against his plan but find agree with his thoughts really.
From what I see you either need to be quite wealthy to the point whereby you will not need to claim a pension or plan to erode your assets to a point where by you can access part OAP. I think about 90 to 95% of workers will fit into the latter category.
If the worst happens and you lose your partner then its a whole new set of issues.
If the government wanted to provide an incentive to get the 50 plus group to work on then they, to me, have totally removed it as from what I have worked out you are heavily financially penalised.
Oh well gone off track.
Cheers AL
-- Edited by sandgrooper1 on Sunday 16th of October 2016 03:10:12 PM
Do you spend $25,000 on a new car for it to depreciate to $20,000 as you pick it up so you have $5,000 less?
Do you gradually milk you bank accounts of interest bearing money and put the money under the mattress so you can get more pension?
Do you update all your white goods, TVs etc and say they are worth a fraction of what you paid (legitimate but you have to be realistic)?
Not uncommon to totally renovate your house, get all new white goods / electrical goods so as to minimise expenses after retirement. Also, sell down to a new, smaller home or retirement village that offers parking space for a van.
$45-$52K per year is not unrealistic. My income is derived from investments, a now smaller age pension and a capital drawn down. I've just turned 65 (first pension payment last week) and my spreadsheet says I will run out of money at about 90. That was initially without an age pension. However, I have plenty of scope for belt tightening. The bit of pension I do get is a complete bonus as when I took a package at 53, my plan was to be a fully self-funded retiree. The age pension was only ever going to be a bonus. It's really the lower interest rates on term deposits that has caused me to draw on my capital and hence get a pension. Strange thing it happened to my dad and his generation too. In the early 1980s, they all put their retirement cash in 15-17% 10 years term deposits only to re-invest at about 6-7%. Some capital was kept out to top up their interest income and hence qualify for pension as their capital was now less. Caused the govt a bit of a headache in the mid-1990s as suddenly a lot of people's part pensions suddenly became larger.
So the best I can do is go on a SKI trips (Spend Kids Inheritance) until I get a full pension.
If you are right on the borderline of the assets test you can gift $10,000 now and another $10,000 each year for up to 3 years to a max of $30,000. At the end of 5 years you can repeat the process again
You can also buy funeral bonds, which I think can be a maximum of $15,000 each which do earn a small amount of interest, Bendigo Bank was one of the suppliers of these bonds.
The above figures may not be correct so best talk to Centrelink, but there are some legal ways to lower your assets, but the best way would be to buy a bigger more expensive house.
My kids can pay for my funeral. I've spent enough on them for them to pay for my final trip. My dad cost me nothing. With a bit of cash in the bank and then 7 weeks of pension and sale of his car to put back in the bank, mum & I gave him a good sendoff. Cheap funeral, big wake. Just what he wanted.
Now the sneaky part. If one loses a partner, one would have to get rid of $125,00 in assets to maintain the pension. Lose a partner, lose assets or lose pension. How cruel can these people be. I suppose this is necessary for their generous pay rises.
No wonder this country is so much debt every body expects a free lunch at the taxpayers expense , the cap the government are putting on this is very reasonable an effects hardly any body...
Selling your house and buying a more expensive one is the wrong thing to do. Agents commissions, selling costs, legal fees, fitting out the new house etc. will cost you many thousands of dollars.
Far smarter to go on an all expenses paid holiday which will probably cost you less than the above costs, will reduce your assets, and if you plan it well may get your assets down below the pension cut-off figure or at least get you a part pension.
Buying a pre paid funeral, the cost of which is not counted in your assets will also work to entitle you to a part or full pension.
I wonder if they capped their pension as well.
Two sets of rules methinks, one for the powerful and mighty and the other for the guys who put them there.
By the way I don't get a pension. I'm self funded
What if you have 3 kids weddings to pay for at 10k each in one year ?
Is that a gift or a parent responsibility.
-- Edited by Retiredatlast on Saturday 5th of November 2016 10:07:20 PM
When I previously lived in Australia, I paid plenty in taxes, so I consider I am entitled to claim the Age Pension. After returning to Australia after 20 years living and working overseas, I returned with a suitcase full of clothes and $20.00 in my pocket. The rest I left behind. Straight to Centrelink and on the Pension. Bit different now, the goal posts have been moved. If you previously lived overseas and return to Australia, you must be back in Country for 2 years before you are eligible to claim the Age Pension. No, I wont get a Xmas letter, maybe one day I'll get one from the Queen if we are both still around !!