Judging by reader feedback, current and future retirees are unlikely to allow the tougher assets test applying from January 1, 2017 to frustrate their desire or plan to obtain a part age pension. When announcing the change the Treasurer estimated that up to 300,000 retirees would lose part or all of their age pension when the new 7.8 per cent assets test taper rate came into effect.

Since that time, interest rates and investment returns have fallen, increasing the pressure on retirees to draw upon capital to live. The financial reality in today's low interest rate regime is that a part or full age pension is an increasingly valuable asset providing a fortnightly government-guaranteed income stream.

Many retirees are planning to spend savings on home renovations or holidays in order to qualify for a part age pension under the stricter rules that come into effect in January 2017. Credit:David Clemson

While older retirees may be reluctant to dissipate large amounts of capital to retain their previous pension entitlement, the investment returns now provide compelling reasons to do so. Put simply, for a married couple, owning $1 million of assessable assets removes all entitlement to an age pension from January 1, 2017.

But spending $700,000 of those assets on home improvements, holidays and other personal outlays would allow access to the full age pension of an indexed $34,000 a year with an actuarial value today of around $1 million. Unlike for other investments, the benefits of receiving the age pension are certain and not dependent on trends in financial markets.