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Aged Care Pension Effects Two-Thirds Of Australians Says Financial Expert
Almost 66% of Australians will qualify for some kind of aged pension
The aged care pension provides benefits to retirees. It pays an income until death that is adjusted for inflation, providing a benefit against poverty and higher prices in our later years.
Even though age pension benefits may sometimes be quite small, the fact that they continue until death can help manage the risk of living longer than planned for in retirement. For example, a male/female couple both aged 67 today has a 50 per cent chance that at least one of the couple makes it to age 90 and a 5 per cent (1 in 20) chance that one of them makes it to age 99.
“Because the age pension is means tested and personal situations and goals vary so much, this is one of the occasions when it makes sense to consider using a financial advisor to help understand the rules and factor the age pension into your broader retirement financial plan,” Mousa said.
“To decide how much age pension you are entitled to receive, the government considers your assets and your income. The level of pension received is based on which of those means tests produces the lower benefit,” Mousa explains.
Mousa says, “On a basic level, the lower your assets and income, the more age pension you will be entitled to as its role as a safety net kicks in up to the maximum amount of $843.60 a fortnight for a single pensioner and $635.90 each for a couple, as at June 2019.”
A financial advisor experienced in the interaction of the social security and superannuation systems can help understand how these rules work and in particular the key breakpoints where benefits reduce.
An advisor can also help make decisions about how these breakpoints interact with financial goals.
Financial advisors can also help guide through other key considerations, including Rules on the treatment of annuities for means testing; Pension loan schemes to increase age pension using home equity; and links between age pension and related benefits, such as the Commonwealth Seniors Health Card.
Mousa says, “Whether considering options for yourself or deciding how best to help someone close to you, aged care is a complex area that requires careful thought and planning. The uncertainty around where and when to move, how much it will cost and where the money will come from can be overwhelming and stressful.
Early and effective planning is critical to ensure that client affairs are properly structured to maximise benefits, reduce costs and retain control. The complexities in aged care may require legal, taxation and financial planning expertise, so you need a competent, experienced team to assist you. TLK Partners provide a range of options for clients to consider so they can make an informed choice that best suits their circumstances,” Mousa concluded.
TLK Partners Wealth Management Companies Kingsgrove, Beverly Hills | Tax Accountant & Agent | Property Advisers are financial management, retirement planning and wealth advisers serving enterprises and private individuals who hope to take care of their future through sound financial management. Visit their website or contact them at (02) 8090 4324 for an appointment to discuss your financial management and investment needs.
This material is of a general nature only, and it does not take into consideration your financial circumstances, needs or objectives. Before making any decision based on this content, you should assess your own circumstances, seek professional advice or contact our office to be directed to the appropriate professional. Whilst all care has been taken in presenting the material neither TLK Partners or its associated entities guarantee that the material is free of error and, the information may have changed since being published.
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The information contained in this article is based on the authors’ opinion only and is of a general nature which is not indicative of future results or events and does not consider your personal situation or particular needs. Professional advice should always be sought relevant to your circumstances.
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