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Minimum Pension Payments Increased from 1 July 2023 - Wealth Peak Financial Advice
Lipins Partners • Jul 19, 2023
Your pension payments are increasing
On 1 July 2019, the Federal Government temporarily reduced the minimum pension payments members must draw from their pensions each year by 50%. This temporary reduction will end on 30 June 2023 which means your pension payments each year are likely to increase. The changes for account-based pensions are outlined in table below.
What if I want to keep receiving the lower amount?
Minimum pension rates are set by the government, so you’re unable to draw less than the minimum they’ve set. Taking extra income you may not need reduces funds available in a tax-free environment. As this income builds up in your personal name, you could pay tax on income earned on investments in your personal name. It is prudent to organise a review to discuss other investment options for the extra funds. These options are likely going to reduce any tax payable on your personal income.
As always, you can reach us on 02 9121 4545 or email advice@wealthpeak.com.au for a review of your personal circumstances.
General advice warning: As always, information provided here is of a general nature only and does not constitute financial advice. We encourage you to speak to Wealth Peak Lipins 02 9121 4545 or advice@wealthpeak.com.au if you want to understand how these issues apply to your personal circumstances.
Traditionally, life’s big milestones were often summed up as getting married, buying a house, having a baby and later settling into retirement. And while all of these are still momentous and memorable life moments, today there are several other modern milestones to add to that list. These could be launching your own side hustle, investing in a property with a friend, choosing to have a child on your own, or deciding to travel in a campervan. Aside from all these moments being a cause for celebration, these milestones also mark an important point in your life to reconsider the security you have in place to not only protect yourself and everything you’ve worked towards but also the ones you love. Considering Life Insurances Big changes in your life are a time to take stock of the things you’ve achieved, your future goals and what’s important to you. And more often than not, life’s big milestones come with added financial responsibility. For this reason, it’s important to consider how you would continue to meet these responsibilities if something were to happen to you. Pooling money with family or friends to buy property can be a great way to break into the property market, however, it comes with its own unique considerations. In particular, having a plan for how you will manage and share the financial responsibility which extends to how you would cover both your shares of the mortgage if something were to happen to either of you. Life Insurance, Critical Illness Insurance and Total and Permanent Disability Insurance (TPD), are all ways to help protect yourself and people that are important to you, helping ensure that if you passed away or could never return to gainful employment, neither your friends or your family would be left to cover the cost of your financial commitment. Similarly, if you were diagnosed with a Critical Illness or experience a traumatic event that left you totally and permanently disabled, you would have lump sum payment to help offer you financial security and assist with ongoing expenses, or debts. Considering Income Protection While big life achievements are generally a result of considerable planning and preparation, you can’t always predict what will happen in life. This means that if you’re considering launching your own venture as your next big milestone, it can be helpful to have protections in place that can help prevent your goals from being railroaded in the event of an illness or accident. Often, increasing earning power is a motivator to launch a business, so it may be worthwhile considering how you would maintain this financial security if something were to happen to you. Income Protection can give you an alternative source of income if you’re temporarily unable to work due to an illness or injury that's left you totally or partially disabled. Whether you’ve launched a solo side hustle or are working with a small team, it can help you stay on top of personal living expenses, medical costs and business expenses, leaving you to focus on recovering. Every Australian is different and has their own unique ambitions, goals and milestones. If you’d like help reviewing your personal financial situation, please reach out. Any advice is general in nature only and has been prepared without considering your needs, objectives or financial situation. Before acting on it you should consider its appropriateness for you, having regard to those factors.
The March Board meeting of the Reserve Bank of Australia (RBA) concluded with a decision to maintain the official cash rate at 4.35%, following a thorough review of recent economic indicators. The official statement for this decision is available on the RBA's website .
Tax planning is a strategic approach to managing your business’ financial affairs, with the aim of legally minimising your tax liability. In other words, you plan ahead to make sure you pay the taxes you should be paying, but not a penny more. Working with your tax adviser, you can look for deductions, credits, exemptions and tax-saving strategies that will help to optimise your company’s overall tax position. How does tax planning affect your business? The primary goal of tax planning is to reduce the amount of taxes your business owes. But it’s also about making sure you stay compliant with all the tax laws and regulations applicable to your business. But what are the main advantages? Let’s take a look at five of the big benefits of careful, strategic tax planning. By planning your tax across the year, you can: Maximise your profits – strategic tax planning helps your company find the best available tax incentives, deductions and credits. This reduces your overall tax liability, cuts your annual tax costs and increases your overall profitability as a business. Boost your cashflow – tax planning is a great way to open up more liquid cash and achieve a better cashflow position for the business. When you cut down the company’s tax payments, that frees up cash and helps you achieve a positive cashflow position. Stay compliant and mitigate your risk – being proactive with your tax planning keeps the company compliant with the relevant tax laws and regulations. It’s a sensible way to tick the compliance boxes and reduce the risk of costly penalties and legal issues. Drive your strategic growth – smart use of tax planning helps you reduce your tax costs and reassign those funds to your strategic business goals. It’s a golden opportunity to invest in areas that promote long-term growth and competitiveness. Give your business a competitive edge – if managed well, efficient tax planning leads to lower operational costs for the business. This gives you a competitive edge when it comes to pricing, innovation, sales and revenue generation. How can our firm help you with tax planning? Getting strategic with your tax planning has many advantages for your financial stability as a business. But to maximise your planning, it’s important to work with an experienced adviser. As your tax adviser, we’ll help you look ahead across the whole financial year, looking for the opportunities to reduce your tax liability and find the best tax deductions and incentives. If you’d like to know more about the impact of tax planning, we’ll be happy to explain. Get in touch to talk about tax planning.