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Planning for aged care can feel overwhelming, especially when managing your superannuation alongside other financial considerations.

In this blog post, we’ll provide a clear and concise guide to handling your superannuation in aged care. We’ll simplify complex terms, explore key decisions, and offer valuable strategies to help you make informed choices about your financial future.

Understanding Superannuation in Aged Care

Imagine you’re ready to move into an aged care facility, but superannuation feels like a confusing puzzle? Let’s break it down! Here’s how your super fits into the Australian aged care system:

The Means Test

When assessing your aged care costs, the government considers your combined income and assets, including super. However, don’t panic! Some parts of your super are excluded from this test, making things a bit easier.

The Big Picture

Think of your super like a treasure chest with three compartments:

Locked Chest: Super in “accumulation phase” before retirement is usually off-limits for the means test. This means it doesn’t affect your aged care fees directly.
Open Chest: If you’re already receiving a super pension, its value counts as income in the means test.
Special Chest: This holds refundable accommodation contributions (RADs) and non-refundable accommodation contributions (DACs) you might pay for your aged care room. These count as assets in the means test, but there are limits to protect your savings.

Remember, navigating these rules can be tricky. Talk to an aged care financial advisor to ensure you’re making informed decisions.

Key Decisions and Strategies

Now that you understand the basics of how super interacts with aged care, let’s explore some crucial decisions and strategies to optimise your situation:

For Individuals Entering Aged Care

Lump Sum vs. Regular Payments

Choosing between a lump sum or regular payments for RADs/DACs depends on your individual circumstances. We’ll analyse your income, assets, and future needs to guide you towards the best option.

Timing is Key

Withdrawing super at strategic times can minimise its impact on the means test. This requires careful planning, and we’ll help you navigate it confidently.

Tax Considerations

Remember, super withdrawals come with tax implications. We’ll ensure you understand these implications and maximise your after-tax benefits.

For Family Members/Guardians

Power of Attorney

Understanding Power of Attorney and its role in super decisions is crucial. We’ll explain its scope and help you navigate its complexities.

Open Communication

Discussing finances with loved ones can feel sensitive. We’ll share tips on initiating these conversations respectfully and effectively.

Expert Guidance

We understand that you have unique concerns and questions. Seeking personalised advice from a financial advisor like us can make a significant difference.

Planning for aged care and managing your superannuation can feel overwhelming, but knowledge is power.

By understanding how super fits into the aged care system, exploring key decisions, and accessing valuable resources, you can approach this journey with confidence.