Super trumps bank savings in a low interest rate environment

If you are planning to apply for the old age pension at 67, remember that your wife’s full-time job will be counted by means tests, which will also consider your super income to earn.

If the total exceeds the maximum threshold – currently $ 3,192.40 per fortnight, or $ 83,002 per year – you will not get a partial pension.

You may find it helpful to work longer.

Make sure you get two or three quotes for your renovations and choose a reputable builder. And since renovations usually go over budget, don’t plan for excess money until they’re completed.

You then need to make sure you have enough money to cover your daughter’s educational needs.

Once you have decided what is really excess in your funds, add it to your wife’s super.

As she is younger, her super will be ignored by Centrelink until she too turns 67.

You need about three times your current combined benefits after you both retire.

I’m 65, work one to two days a week, and earn $ 240 to $ 350. I have $ 7,000 super plus $ 130,000 in Transition to Retirement Pension (TTR), paying $ 280 bi-weekly. My wife, 63, works full time and earns $ 1,800 a fortnight. She has $ 250,000 super plus $ 25,000 in a TTR fund paying $ 58 bi-weekly. I have half of three properties, one valued at $ 950,000 with a mortgage of $ 380,000 and the others valued at about $ 1.3 million with mortgages of $ 750,000. We plan to sell the first property and keep the other two tenants. Our personal debt is a $ 90,000 renewal facility that costs $ 395 per month and a car loan with a repayment amount of $ 39,000. Do I have to repay the car loan on my TTR fund and keep the withdrawal facility, because it is tax deductible? BL

I am a little confused.

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If the $ 90,000 debt is a mortgage on the property you are selling, it will not be tax deductible if it is not held as a loan intended to produce taxable income. Also, the lender will likely ask you to erase it during settlement.

If you walk away with half of some $ 570,000, or $ 285,000 before capital gains tax, you should be able to write off both personal loans, which I would recommend, rather than lowering your super. advantages.

  • The advice given in this article is general in nature and is not intended to influence readers’ decisions regarding investments or financial products. They should always seek their own professional advice that takes their personal circumstances into account before making any financial decisions.

If you have a question for George Cochrane, send it to Personal Investment, PO Box 3001, Tamarama, NSW, 2026. Help lines: Australian Financial Complaints Authority, 1800 931 678; Centrelink pensions 13 23 00.


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