Daily Mail Australia’s new columnist James Wrigley, senior financial advisor at First Financial, answers readers’ money questions every Wednesday.
Hello James,
Congratulations on your column!
I’ve been following you on Insta to get your advice and opinions on money and finance related topics.
I have a question:
• Couple of 65 and 64 years old
• Woman who works part time
• Man with full-time job
• Exclusively owned house valued at more than 2 million dollars
• Super combined of more than 1.2 million dollars
• Cash savings of over $300,000
• I sold investment property last year.
• An accountant friend advised him that SOME super can be taken out to buy a unit.
• Plan to continue supercharging
• Is the advice to use super to buy an investment unit good?
Thanks in advance for your help/suggestions.
Greetings,
Maria.
James Wrigley says whether people should take money out of groceries is more than a simple “yes or no” answer.
Hello Maria,
Thanks for following us on Insta. I hope this column is useful to you and others who may read it.
Firstly, congratulations on developing the financial position you have; You should certainly be able to enjoy a comfortable retirement.when the time comes.
Unfortunately, I cannot comment on whether the advice given by anyone else is good or not through this column. Such advice must be provided in a particular form known as a Statement of Advice, issued by a licensed financial advisor. From what you’ve mentioned here, I think you could benefit from seeking financial advice.
Can you accept money from our supermarket? Yeah.
Should you? There is more than a simple yes or no answer.
People aged 65 will now have full and unrestricted access to their accumulated super balance, they are free to withdraw as much as they want from super; All they need to do is tell their super fund that they want to withdraw some money.
People aged 64 would be limited to a maximum of 10 percent of their account balance through a transition to retirement pension. However, once the 64-year-old turns 65, they too will have full access to their super balance.
Turning 65 is a condition of release, after that age it does not matter if you are working or do not have full access to your super.
On the topic of should you? It’s difficult to put money into super (given the annual contribution limits), but it’s very easy to take it out once you turn 65. Taking money out of super and investing in your own name exposes the income and growth of that asset to your personal margin. tax rates.
A 65-year-old could start an account-based pension and benefit from tax-free gains and asset growth within the super environment. Those tax-free gains are available on the first $1.9 million of super you have as an individual, so you both have room up to that limit given the super balances you mention.
If you think owning an investment unit is a good idea to help fund your retirement (remember that income is key to retirement, so investing your money in things that generate good income is ideal), then with the right type of retirement fund, you could buy that unit within retirement and benefit from the tax-free gains I mention above.
However, more often than not we find people selling rental properties as they approach retirement. Land tax, income tax, rates, body corporate/strata, repairs and maintenance come from the rental income you earn. You won’t have much rental income left to spend on your retirement. This then puts pressure on other things, such as your super fund, to make up the shortfall in your income requirements.
As mentioned at the beginning, you could really benefit from some formal financial advice.
I hope this helps.
Jaime.
Send your questions to James at thewealthbuilder@dailymail.com.au
James Wrigley is a representative of First Financial PTY LTD ABN 15 167 177 817 AFSL 481098
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