Understanding Account-Based Pension Payment Changes

pension-payments
Share on linkedin
Share on facebook
Share on twitter
Share on email

If you are over 60 and retired, you may be receiving a monthly pension payment from an Account Based pension fund. As both the earnings in the fund and the payments made are tax free, the government mandates that a minimum amount needs to be withdrawn each year.

However, due to the impact that Covid 19 has had on some businesses, their profits and dividends paid, the government has temporarily cut the minimum pension payments that are required to be paid by half. This increased flexibility is a positive move as it now allows clients who are drawing more than they require to leave the additional funds in the tax-free environment.

Pension payments are normally re-set each year in July and are based on the balance on 1 July. So if you currently have your pension payments set as ‘minimum’ (but don’t really require drawing down this amount), there may be an opportunity to reduce payments and leave more in the fund.

Feel free to call to schedule a meeting to discuss.

More insider tips

Stay up to date and in the know

Saige Financial Planning Pty Ltd and its advisers are Authorised Representatives of BD Financial Advisory Pty Ltd AFSL 502401 ABN 34 621 612 548. Please read our Financial Services Guide and consider our privacy policy.

Any information on this website is general advice only and does not take into account any person’s objectives, financial situation or needs. Please consider your own circumstances and consider whether the advice is right for you before making a decision.

Always obtain a Product Disclosure Document (if applicable) to understand the full implications and risks relating to the product and consider the Statement before making any decision about whether to acquire the financial product.

Liability limited by a scheme approved under Professional Standards Legislation.

Thank you for subscribing!

To confirm your email address, we have sent an email to you. You need to click the link in the email so we can complete your subscription.