Review your retirement savings ahead of the new financial year
A new financial year is a good time to review your retirement savings and take some simple steps to make sure you’re getting the most out of your account-based pension.
To be eligible for the Age Pension, you must meet age and residency requirements, and also satisfy the means test. If you are not currently receiving the Age pension, the end of the financial year is a good opportunity to check whether you may now be eligible.
There are two elements to the test to determine whether you’re eligible for the Age Pension – the assets test and the income test. The assets test is a review of your assets while the income test considers your income from sources other than the Age Pension. You can find out the latest information about the test on the Services Australia website.
If you are already receiving the Age Pension, the end of the financial year is also a good time to review your assets to ensure that the amounts assessed to determine eligibility are correct. If there’s been a change to the value of your assets you could be eligible for a higher Age Pension.
Small changes to asset values can make a big difference. If you have a car that has depreciated, or the value of your investments has gone down, you could receive an uplift in the payments you’re eligible for as part of the Age Pension.
Given the Age Pension is the main source of income for most retirees in Australia, it’s worth ensuring the information on record is up to date. You can always talk to a financial planner to assess your options.
Drawdown rates staying at 50 per cent
As announced in the Federal Budget in March 2022, the temporary reduction to the minimum pension drawdown rates have been extended for retirees until 30 June 2023. The reduction was initially introduced on 1 July 2019 and has now been extended for an additional year.
The reduction is in place to shield retirees who don’t want to draw on their account-based pensions while the value of their investment options is reduced.
The rates are as follows:
|Temporary Reduced Minimum
Payment For The 2022/23 Financial Year
|95 or older||14%||7%|
The Government requires pension members to withdraw a minimum amount from their pension each year. At the beginning of the financial year, we review your regular payments and adjust them to ensure you meet the minimum requirements.
Review your drawdown options
Payment options are selected when establishing your account-based pension but you can review these options at any time if your needs change. For example, you may require more frequent payments than originally anticipated, or decide that the temporary reduced minimum drawdown rate is not enough to cover your needs.
You can review the current frequency and amount of your pension payments by logging into your online account. You can change the frequency of payments and check your balance online.
Have you nominated your beneficiaries?
Nominating your beneficiaries, the person or people that will receive your superannuation benefits if you die, is important. You work for most of your life to accumulate your superannuation savings and taking control of where your money goes provides peace of mind.
Unlike your other assets, such as your home and your car, your account-based pension doesn’t automatically form part of your estate when you pass away.
While it’s not something we often want to think about, in the event of your death, the Trustee of MyLife MyPension is responsible for distributing your money to your beneficiaries or your legal personal representative.
There are three types of beneficiary nominations.
- Binding Nomination
This means you nominate who you want to receive your pension so that it’s legally binding. The Trustee must pay the balance of your account-based pension to your nominated beneficiary, providing your nomination is valid.
A binding nomination ensures faster payment to your loved ones, as we do not need to make a decision on your behalf.
Binding nominations will only be valid for three years so we’ll ask you to confirm your nomination at least once every three years. You can make a binding nomination by completing the Death Benefit Nomination form.
- Preferred (non-binding) Nomination
You nominate who you’d prefer the Trustee to pay your pension to. However, it’s not legally binding meaning your preferred person may not receive it. The Trustee will make the final decision.
- Reversionary beneficiary
This means you nominate who you want to continue to receive your pension as a regular income. You can only nominate one dependent as a reversionary beneficiary at any time and, provided the beneficiary you nominate is still your dependent for tax purposes when you die, then we must pay your benefit in line with your nomination
Regardless of the option you choose, it is important to review your nomination from time to time and ensure it reflects your intentions for your benefit.
Review your wills and power of attorney
More broadly, when reviewing your beneficiaries, it could be a good idea to consider a review of your wills and power of attorney. It is very important that you review these documents on a regular basis to determine whether they are still appropriate given any recent changes to your circumstances. Relationship changes for you or a family member, new additions to your family, asset purchases or sales, recent inheritances or a death in the family can be a trigger to re-examine your estate planning arrangements.
Head of Retirement
Speak with a financial advisor
Make sure you're receiving all your pension entitlements.
Issued by Togethr Trustees Pty Ltd ABN 64 006 964 049, AFSL 246383 ("Togethr"), the trustee of the Equipsuper Superannuation Fund ABN 33 813 823 017 ("the Fund"). MyLife MyPension is a division of the Fund.
The information contained herein is general information only and does not take into account your personal financial situation or needs. You should consider whether this information is appropriate to your personal circumstances before acting on it and, if necessary, you should also seek professional financial advice tailored to your personal circumstances. Where tax information is included, you should consider obtaining personal taxation advice.
Before making a decision to invest in the Equipsuper Superannuation Fund, you should read the appropriate Product Disclosure Statement (PDS) and Target Market Determination for the product which are available at mylifemypension.com.au
Past performance is not an indication of future performance. Financial advice services may be provided to members by the trustee’s related entity Togethr Financial Planning Pty Ltd (ABN 84 124 491 078; AFSL 455010).