Latest Financial Planning News
Hot Issues
Super growth reducing age pension drawdown
Big four firm outlines new financial year checklist for SMSFs
Asset allocation as you age
Australia - the story goes on.
Consolidate your super and save
Critical documentation steps flagged with switching SMSF loans
Good investment habits versus damaging biases
Control considerations flagged with death benefit pensions for children
Interest rate for SMSF loans set to rise under safe harbour terms
Recession on our mind
What it will take to close the super gap between men and women
Australia - How are we going as 2018-19 ends?
LRBAs, guarantees in need of review after property market falls
Average age for establishing SMSFs sitting at 48.9: Report
ATO updates valuation guidelines for pension reporting
ATO figures show jump in starting balances for SMSFs
Your personal financial register
Australia’s $4bn Super blackhole impacting self-employed most
The proper help can be a benefit - age pension
SMSFs on ATO’s radar in cryptocurrency review
Limited recourse borrowing arrangements - LRBAs
What a financial planner does to help.
Goodbye to ad-hoc portfolios
Wanted: More voluntary super contributions
Australia by the numbers – May Update
Federal Budget 2019 - Overview
How the 2019 Federal Budget affects you
The problem with getting to 53 years of age.
Paying for health care in retirement
Personal super contributions and the 10% test
Articles archive
Quarter 2 April - June 2019
Quarter 1 January - March 2019
Quarter 4 October - December 2018
Quarter 3 July - September 2018
Quarter 2 April - June 2018
Quarter 1 January - March 2018
Quarter 4 October - December 2017
Quarter 3 July - September 2017
Quarter 2 April - June 2017
Quarter 1 January - March 2017
Quarter 4 October - December 2016
Quarter 3 July - September 2016
Quarter 2 April - June 2016
Quarter 1 January - March 2016
Quarter 4 October - December 2015
Quarter 3 July - September 2015
Quarter 2 April - June 2015
Quarter 1 January - March 2015
Quarter 4 October - December 2014
Super growth reducing age pension drawdown

Less than half of new retirees accessed the age pension last year and of those who did, only one-quarter drew a full pension, according to new research from annuity provider Challenger, which claims superannuation is working on a mass scale.



       


 


The research, released by the Challenger Retirement Income Research (CRIR) team, found only 45 per cent of people who had turned 66 and were eligible for the age pension were claiming it and only 25 per cent of this age cohort were accessing a full age pension.


The CRIR team stated the data, which was drawn from the Department of Social Services from December 2018, also showed 70 per cent of all age-eligible retirees currently receive some form of age pension, but only 42 per cent were on the full age pension, however, this latter figure was an overall average and included retirees in their 90s who never had any form of superannuation.


“The apparent success of super in building savings at retirement is likely to be delaying age pension access for most people. As super balances continue to grow, most retirees can expect to spend longer in retirement before they receive any age pension,” the research said.


The CRIR team claimed superannuation was working on a mass scale and its success in creating retirement savings was not limited to a single sector or a handful of funds.


“While some funds have been particularly successful in building balances for their members approaching retirement, the rising tide of time in the system is lifting average consolidated balances across the system,” the report noted.


The CRIR team added the average retirement-phase member balance across all large Australian Prudential Regulation Authority (APRA) funds at June 2018 was $281,253, but this figure was not for consolidated balances, which were on average for a person with super aged 60 to 64 just over $300,000. When combined at the household level among couples entering retirement, this balance was more than $400,000.


These figures would, however, lead to an interaction with the assets test, which has its lowest threshold starting at $258,500 for a single person and $387,500 for a couple, and where a 7.8 per cent a year taper rate begins.


“This means that the average large APRA fund member in the retirement phase does not get the full age pension,” the report noted, adding access to the pension would increase as they spent their retirement savings from year-to-year.


 


 Jason Spits
June 26, 2019
smsmagazine.com.au


 


 




30th-July-2019
 

Investorplan is an Authorised Representative of GWM Adviser Services Limited trading as MLC Financial Planning | ABN 28 056 426 932 | an Australian Financial Services Licensee with its Registered Office at 105-153 Miller Street North Sydney NSW 2060
email: ownyourfuture@investorplan.com.au
General Advice Warning | Terms & Conditions | Legal Statement | Privacy Policy |Site by PlannerWeb