The Federal Government’s second set of measures, combined with previous announcements totals $189 billion or 9.7% of Australia’s GDP.
What you need to know
One measure which will have an immediate and practical implication to your retirement portfolio, is a reduction in Minimum Drawdown Rates for income stream accounts.
Temporary Reduction in Minimum Drawdown Rates
A temporary 50% reduction to the minimum rates you are required to withdraw from your retirement income stream has also been announced.
The reduced drawdown rates will apply for the remainder of this financial year and for the 2020/21 financial year:
This measure is similar to steps the Australian Government took during the GFC (2008/09) that helped reduce the forced withdrawal of assets from the tax-free pension environment, giving retiree portfolios greater time to recover.
Actions to consider
Clients with adequate cash reserves outside of their pension account may benefit from reviewing their current draw down rates:
If you are currently drawing a monthly income stream payment, then you are likely to have already met the reduced minimum drawdown amount for this financial year
If you elect to draw your pension payment(s) annually, then the amount set to be drawn in May/June can potentially be reduced (where appropriate).
To access our previous communications, click here:
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