Get retirement ready in 2023 with Netplan's top tips December 31st, 2022
In this article we explain what’s lined up for 2023 and how it might impact retirees, or people preparing for retirement.
We discuss the current offers on the table from the government and when we expect changes to come through from the government. Additionally, there’s some issues that have already been flagged as being subject to review in the weeks and months ahead.
Make the most of the offers from the government
Income Work Bonus
The government has offered a $4000 income work bonus to retirees, allowing them to earn more income for 2023 before the pension is reduced under the income test. They also extended this offer so that it will last until the end of 2023, which means you now have 12 months to make the most of this offer. That’s explained in the income test content in Section 4 - The Income Test.
Super down-sizer eligibility boost
The super down-sizer eligibility age was recently dropped to just 55 years old effective New-Year’s day. So if you've been thinking about moving into a different home, now might be the time. We explain exactly what that could mean for your retirement income in Section 4 - The Asset Test of the retirement planning course.
Update Centrelink again!
It’s worth making sure that your assets are correctly registered with Centrelink particularly after all the gifts and expenses of the holiday period. Remember, Centrelink doesn't track your bank account balances.
Our perspective on 2023 market movements and changes to retirement
Market Turmoil likely to continue.
Notwithstanding any significant geopolitical events (Ukraine, China…), the first four months is probably where we’ll see a crystallisation of economic expectations for the rest of the year. The effects of rapid and significant interest rate rises should be really starting to show in company profits and expectations. If the expectations of a recession hold true, we’ll probably see some share-market lows in this period.
Unfortunately, there’s some pain ahead for those that borrowed lots of money. Netplan premium subscribers will be kept abreast of our unbiased views of where markets are heading and how they fit in with how to structure your super fund and other investments as explained in Netplan Section 2 - Asset Allocation.
Changes coming in March
In March we will see scheduled updates from the government come through. What will this mean for retirees? Well, there are a few things we know for certain.
March 20 is when we’ll see the 6 monthly increase to the rates paid on income support payments such as the Age pension and Jobseeker. It also means an increase in the upper cutoff thresholds so if you just missed out now, Australia’s rocketing inflation rate might mean you qualify after March 20 for the first time. All of this is explained in Netplan Section 4.
Changes coming in May
The first Tuesday in May is when the Albanese government hands down its first “full” federal budget. Normally, with a couple of years to run to the next election, governments like to introduce the “nasties”! While no one’s sure, there’s already some buttering-up going on regarding a limit on how much you can have in Super. Five million dollars is one number being thrown about and to be honest, that’s unlikely to trouble most of our Netplan Fans. But stay tuned and we’ll let you know as soon as we hear anything.
Changes announced in June
Late May, early June is when we get the new thresholds to apply from July 1. This includes possible increases to the super thresholds which are linked to Average Weekly Ordinary Time Earnings (AWOTE). Because of our high inflation rate, there’s a good chance we’ll see some increases to the Contribution Caps, possibly increasing them from the current level of $27,500 per annum to $30,000 per annum. That means you may be able to inject even more into super. All of that is explained through Section 3 - Putting money into super
Changes in July
For those that are still working, remember that compulsory super will increase to 11 percent and that’s now on every dollar you earn. Any budget announcements from May that get through the parliament in time, usually kick off in July.
Changes in September
In September we’ll see the next 6 monthly increases to the rates paid on income support payments such as the Age pension and Jobseeker. Australia’s inflation rate is likely to have receded from the highs of last year but they’ll be using the period from July 1 - June 30 as the reference point.
And that’s our wrap-up of what 2023 might hold for Netplan fans. We hope you have a fantastic and successful year ahead.