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According to Sydney Morning Herald article suggest "The harsher pension test gives retirees little reason to save"
The article reports that "Unfortunately, the work opportunities for most retirees are limited reducing scope for many to take advantage of the substantially more generous income test arrangements. Planning ahead for retirement in the future will nevertheless involve maximising opportunities for full or part time work and placing less emphasis on accumulating assets other than the family home exempt from the asset test."
Whaaat?? "...less emphasis on accumulating assets" - Where's the logic? Surely that commentary has to be purely for the sake of political posturing.
Let's look at what that "less emphasis on accumulating assets" approach achieves - Mindful it is in a bid to 'be eligible' to receive what is at best a 'subsistent standard of living' pension that the state is able to provide. The advice is recommending abandoning any plans to become asset wealthy prior to eligiblity for a pension, because you'll be reducing your potential age pension payments.
To us at InvestorGroup that's ridiculous application of what can only be dubbed 'Fool's logic'. The proposed alternative is to not acquire assets that create passive income streams and leave no choice but to HAVE to work to create survival income.
Many of us perhaps happily choose to remain active in the workforce for longer, but that should be your choice not a necessity.
ARE YOU PLANNING TO ENJOY LIFE ON YOUR AGE PENSION? Look at the numbers below - Good Luck if you are!
Age pension rates
Each year, the Commonwealth Government reviews the fortnightly pension rates. Below are the current maximum fortnightly payment rates for 2016/17 :
| Single Person | Couple Living together | Couple Separated | |
| Maximum Basic Rate | $794.80 | $599.10 each | $794.80 each |
| Maximum Pension Supplement | $65.00 | $49.00 each | $65.00 each |
| Clean Energy Supplement | $14.10 | $10.60 each | $14.10 each |
| Total Per FORTNIGHT | $873.90 | $658.70 each | $873.90 each |
IMPORTANT: For most people, the Age Pension alone is not enough to fund their retirement goals. This is why a healthy superannuation balance is so critical.
Simply put, Australians will end up having to work longer in years, change their retirement plans and / or accept having less in their old age!
When the tide is running against you - Paddle harder!
Work now to accumulate significant appreciating assets both inside and outside of superannuation. Do NOT wait. The compounding power of time is the element that works fiercely either in your favour, or against your favour.
Published in The Australian Social Services Minister Christian Porter defended the changes, warning that life expectancy would be higher in 2050 and that the number of people of pension age would have doubled.
“It is just not realistic when the proportion of people of pension age is growing so quickly and the proportion of people paying taxes to support the pension payments is shrinking to have a situation persist where a couple with a million-dollar-plus home and more than a million dollars in other investments is able to get a part pension and grow their assets base,” he said. “People affected by the loss of a part pension because of higher asset bases will not need to draw down more than 1.8 per cent of their assets to be in the same position and of course that’s what the government expects most people will do. That does not reduce long-term incentive to save.”