Updated: May 6, 2020
As the Coronavirus (COVID-19) continues to cause economic upheaval, what does this mean for your retirement plans? You have saved for years, invested in a diversified portfolio and were looking forward to living a comfortable life at retirement. Maybe you were wanting to retire early, and now you're left wondering "will I have enough money for retirement?"
While earnings from savings have reduced and interest rate cuts have decreased the income on savings, the age pension which goes up twice a year is set to increase on March 20th 2020. The government has also announced details of a stimulus package that will have a positive impact on your retirement plan and you will continue to have access to other government programs, schemes, entitlements and rebates.
Here are 4 ways your retirement fund can weather the storm:
1. Deeming rates are going down. This will help people with large superannuation balances qualify for the Commonwealth Seniors Health Card. The Commonwealth Seniors Health Card gives self-funded retirees the same health benefits as an Age Pensioner - which could be worth up to $2500 per year. You could also receive a $200 Energy rebate and a $250 Regional Seniors Travel Card if you live in a regional area. So if you thought you did not qualify for it, check again once deeming rates are cut.
2. The Pension Loans Scheme interest rate could go down. This was already lowered from 5.25% to 4.5% in January this year and could go down again.
3. Changes to the market value of your investments could mean you become eligible for a higher Age Pension. Update Centrelink with any changes to your savings. As a part pensioner, for every $1,000 asset change, you could be entitled to an additional $78 per year in age pension.
4. Adviser managed portfolios will seize opportunities. It is at times like this that you will be thankful of trusting your fund to a Retirement Specialist. Having a long-term investment strategy and a diversified portfolio, together with a non-biased expert view of the economic market should mean your fund will only mildly be affected.
For more information on how to protect your retirement fund and for a review of your finances, click here and speak to our Retirement Specialist today.