We are inheriting a $750,000 share portfolio and some cash. We have investment properties that are borderline positively geared, with principle and interest loans, and we own our home. We have about $400,000 in combined superannuation and are looking at taking early retirement in the next year. We live a modest lifestyle. What should we have in terms of a safety net to ensure this is possible? L.N.
The Association of Super Funds of Australia (ASFA) estimates you need income of $41,446 a year for a modest retirement, starting at age 67.
You need income of $41,446 a year for a modest retirement, starting at age 67.Credit:Louie Douvis
Budgeting for a woman’s life expectancy of 19 years, plus a further five, you would go through about $830,000 – if the funds earn 5 per cent a year after tax and your expenses are indexed at 3 per cent.
As long as you are not too young, your shares and super should see you through. Review both the share portfolio, focusing on franked dividends, and your investment properties, since rising interest rates may convert the positive gearing to negative and eat away at your income.
I am a retired, 74-year-old widower with two independent daughters in their mid-40s. Apart from my home, I own a $250,000 interest in a holiday house and a $570,000 share portfolio, paying $33,500 a year, including franking credits. Am I eligible for a part aged pension or Commonwealth Seniors Health Card (CSHC)? I.G.
For a single homeowner, the assets test cut-off for the age pension is $593,000. So no age pension for you. However, the CSHC only has an income test that cuts out at $57,761 for singles.
Unlike the age pension, the CSHC income test relies, in your case, on actual taxable income, as evidenced by your latest Tax Notice of Assessment, plus any investment losses and foreign income.
So, you could successfully apply for the health card. Apply online at the Services Australia website.
My wife, age 70, and I, 78, are on a part pension of $88 per week each. We jointly own an investment property valued at $675,000 and the rental provides us with an additional income of $225 per week each before agent’s fees and expenses. We have 12,215 Telstra shares worth about $48,800. Are we getting the right amount of pension? Also, can I work a few hours a week from home (if I can get work) and, if so, how much am I allowed to earn? F.M.
How much do you really need for a modest retirement?
Source: Philippines Alive
