Pension drawdown relief extendedDolfinwise Super Strategies

Pension drawdown relief extended

Managing pension payments and capital redemptions well can dramatically prolong the life of a retiree’s pension. Combined with prudent asset allocation and risk management and a wholistic view of a retiree or pre-retiree’s financial situation and lifestyle needs through active management it is possible to extend the life of income streams by many years. For some client’s poor income management can result in reduced social security entitlement and even unnecessary taxation. Good advice can improve lifestyle now and increase wealth in the long term.

In Early 2009 the government made temporary change to the minimum payment requirements for account based, allocated, market linked (term allocated) and transition to retirement income streams irrespective of when they commenced. From March 2009 retirees not needing the minimum income from their Allocated pensions were able to reduce the amount paid out of their income streams by 50% for the 2008/09 financial year. In the 2009 Federal Budget the government extended the pension drawdown relief to cover the 2009/10 financial year so that the calculated minimum payments may continue to be halved should the recipient choose this option. This temporary change was in recognition of the downturn in global financial markets over the past two years and the detrimental effect this has had on most retiree’s pension balances. The government is trying help retirees and those in transition phase who can afford to do so allow their balances to recover with markets instead of being forced to pay out large amounts in pension payments from reduced balances.