From 1 July 2020, you can reduce your minimum pension payments from super.
The Australian Government is temporarily reducing the minimum pension limits from super to help retirees mitigate against the losses in financial markets resulting from the COVID-19 crisis.
This means you can reduce your minimum pension payment from your super fund by 50%.
The new reduced pension payments are based on your account balance on 1 July 2020, as follows:
|Age||Previous minimum annual pension payment factors||New minimum annual pension payment for 2020-21|
The reduced minimum pension payments will provide an important relief for people who want more flexibility in their wealth management.
It is not mandatory to go with the new reduced minimums. You have the option to maintain your current level of pension payments.
So, if your super fund has elected to automatically reduce your pension payment, make sure you ask them what you need to do to maintain your current pension payment.
Work out how much you need and adjust accordingly
All super funds will send you a letter in July to confirm what your pension payment will be for the 2020/21 Financial Year. This is a good opportunity to assess if it will be sufficient to cover your living expenses or if you need to make some adjustments.
Remember, you can always adjust your pension payments (unless there are legislative restrictions) at any time of the year if your circumstances change. It’s all about making your money work for you.
This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, we recommend you consider, with or without the assistance of a financial adviser, whether the information is appropriate in light of your particular circumstances and needs. Financial planning services are provided by Eastwoods Wealth Management Pty Ltd ABN 17 008 167 002 / AFSL 237853 trading as Beyond Bank Australia Wealth Management. Eastwoods Wealth Management Pty Ltd is a wholly owned but not guaranteed subsidiary of Beyond Bank Australia ABN 15 087 651 143 / AFSL 237 856.