Smart Retirement - Take 2

OK the post above is a lot to take in so I will start a new post here because I am about to once again explain the Big Grandfather Deception by the govt.

So far we have used the LOPS to show how a Retirement Income of DOUBLE the Age Pension is easily obtainable simply by having accumulated the Employer Contribution since 1990, and we mentioned that this Age Pension Application got snuck in just before Grandfathering came to be on 1 Jan 2015.

So given that the entirety of BigSuper called DOOM & GLOOM on those that came AFTER Grandfather, or those who were Grandfathered but had the temerity to do an Oliver and "ask for more", I am sure you will be saying I am not at retirement age so will I miss all this - boo-hoo?

Well the news is good as we pulled a little trick there and based the above result on NON Grandfather, so here is the sad news for those that bought the hype that "Grandfather is GOOD, STAY with Grandfather".

So for Robin as a bloke, under Grandfathered Rules he would get $57,518 LESS in Age Pension over 20 years.

As if that is not bad enough, for Robin as a gal she would get $75,671 less, so you will be saying OMG OMG how is it possible Germain Greer missed this INEQUITY for 45 years after the small f feminist takeover of 1970?  Simple answer is Germaine and the sisterhood don't use spreadsheets so did not KNOW.

And then none of the "One Year Wonder" Financial Planners do either, or at least if they do, they don't look at 20 years.  So that leaves just the govt and myself that understand the horrible truth.  So one can understand it HAD to be repealed, but NOT accept that it be allowed to linger for another 20 years.

The reason the Grandfathered Test regime (now REPEALED but allowed to linger) has a real Sting in the Tail that jumps in at 75 years or so, works this way.

When you took out an Allocated Pension (changed to Account Based Pension) you were given an Income Test Free Amount which was your total account amount (minus any Lump Sums) divided by your longevity as determined by ABS.  On the surface that looked fair as you were essentially getting about 5% FREE, SO if you DrewDown the Minimum of 5% ALL of your income was Test Free.

BUT as you get older the Minimum Percentage goes up, ie to 9% at age 85, but the Test Free amount stays the same. So by 85 4% is NOT Income Test Free but is FULL INCOME under Income Test, so DOWN comes the Age Pension.

The bottom line is this is costing the Pensioners that can be INDUCED by SPIN to stay "Grandfathered" about $10 billion pa, or to put it the other way if ALL those existing Pensioners "swept" their ABPs and took out a new deal, then the govt would LOSE $10 billion pa for about 20 more years.  That is 25% of the present total Age Pension budget and enough to BREAK the budget if that Sword of Damocles comes SPINNING down (pun intended) on the feast.