Pension assets test: get ready for January changes

If you are near the assets test threshold and wish to continue to receive your age pension at the same level, you may want to consider spending some money by bringing forward your planned purchases such as a car, home improvements or holiday, or gifting a small amount of money.

You can give away up to $10,000 provided you meet the gifting rules.

You could also consider prepayment on a burial plot or other things that are not counted as assets for test purposes, and may legitimately depreciate values of some assets.

If you have an income stream product such as an annuity, look at when and by how much you can adjust the amount of income you receive against your needs to meet living expenses.

Generally, you can adjust the level of payments, frequency and investment mix.

More Australians are entering retirement with debt. Ensure the repayment of home loan/reverse mortgage, credit cards or other commitments are going to be affordable.

If not, contact the lender to discuss options.

My best advice is to be ready ahead of the January 1 changes so you don't experience a shock when they occur.

To get started have a look at the Department of Human Services website.

If you don't have an adviser or you need financial support or counselling, check the seniors section of the federal government website.

Alternatively, if you are a seniors card holder, inquire about financial planners in your state. You may be eligible for discounted advice.

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