There have been little good news for retirees lately, so thought I might share some you may want to take advantage of.
The Government has announced that the temporarily reduced minimum pension drawdown requirement will be extended for another year. This means, for those who have elected to withdraw the minimum amount from their pension funds, this amount will be halved for the 2122FY. This allows pension members to withdraw less of their retirement savings, preserve their wealth, and avoid solidifying any loses during Covid.
If you can afford to reduce your drawdown, and still live within your means, it may be well worth considering. Effectively it allows your funds to sit in a tax free environment for as long as possible and recover from any market volatility. The benefits of this strategy increase with age due to the minimum you are required to withdraw.
| Age at 1 July |
Previous annual minimum pension payment prior to 1920FY |
Temporary reduced annual minimum pension payment to 30 June 2022 |
| Under 65 |
4% |
2% |
| 65 to 74 |
5% |
2.5% |
| 75 to 79 |
6% |
3% |
| 80 to 84 |
7% |
3.5% |
| 85 to 89 |
9% |
4.5% |
| 90 to 94 |
11% |
5.5% |
| 95 or more |
14% |
7% |
If you have any questions, or unsure how the changes might impact you, please get in touch – the team at Apollo is always here to help.
