On top of Government measures, there may be more you can do financially.
Some excellent options outlined by our Financial Planner, Bruce Chisholm.
With the measures in place to slow the spread, there will inevitably be economic impacts. This was bought home to me this morning when out for my usual early morning walk. I always take the shortcut through the neighbourhood shop car park, dodging all the tradie dual cab utes and trailers coming and going from the bakery for their breakfast. Today, not a ute in sight and the shop was empty with staff standing at the counter.
The key government measures of accessing up to $10,000 of your super in 2019/2020 and 2020/2021 have been covered already as well as the reduction in minimum pension requirements.
So, what other strategies may be available to assist?
Options may include:
- If you’re renting and your lease is coming up for renewal, consider options such as sharing with friends and family to halve or save the rent. Or ask your landlord for a rent reduction.
- If you’re having difficulty meeting your home loan repayments, speak to your bank. Banks are offering assistance which may include pausing repayments for a period.
- Pausing salary sacrifice into super to boost your take home pay.
- Electing to take cash dividends from your investments rather than dividend reinvesting.
- Those over 60 could start a Transition to Retirement Income Stream (pension) and receive tax free income to help with living expenses and loan repayments.
- Those under 60 who have reached their ‘preservation age’ (55 – 60 depending on date of birth) can also start a Transition to Retirement Income Stream (pension) with the income typically being taxed at your marginal tax rate less 15%. This may be tax free if your other income in the financial year is low.
- If over 60 and you lose any job including a part time one even where you continue in your main or other job, you can access your super as a lump sum, even if you are looking for another job. The lump sum would be tax free.
- Those who have made salary sacrifice contributions, and these are identified in their fund as such, may be able to access this as an income stream if made temporarily disabled from catching the coronavirus
- For those with super accumulated from early on, you may have Unrestricted Non Preserved Benefits that can be cashed at any time even if working.
- Stopping current regular investment plans to preserve cashflow.
Importantly, I would encourage you to reach out and seek professional advice.
We’re here to help.
We trust that you all stay safe and healthy through this crisis.
Article written by Bruce Chisholm, Financial Planner, Highview Accounting & Financial.
Authorised Representative No. 1235025 of InterPrac Financial Planning Pty Ltd Licence No. 246638 Highview Wealth Solutions Pty Ltd Trading as Highview Accounting & Financial.
Bruce has written his article for general information purposes only and it does not constitute personal advice. This information has been prepared without considering any individual’s objectives, financial situation or needs. You should not act solely on the basis of material contained in this article. We recommend that formal advice is sought which considers all your individual objectives and needs.