The big decision will be whether the money is to be a loan or a gift. If it is a gift, there could be complications if his relationship breaks down.
I am aged 74 and have my 75th birthday in January. My wife will be 75 in October. We both have some money in super and would like to withdraw $70,000 and, in a few months, put it back in again. We are also keen to add more to our super. Would we be able to do this?
From July 1, anybody may make non-concessional contributions to super until the age of 75 without passing the work test.
Provided your super fund balance does not exceed $1.7 million when you wish to make the contribution, you can withdraw the money and then re-contribute it.
There is no entry tax on re-contributed funds.
I don’t quite understand the logic in the answer you gave to a recent question. You recommended that a person set up their super pension account with the equivalent of four years’ expenditure in the cash option, and to put the rest into a balanced option. Normally, such a generic structure is designed to allow a person to live on cash reserves during a period of poor stockmarket performance, and not have to effectively sell shares at depressed prices to finance living expenses. However, in the case of pensions drawn from super funds, it is my understanding that they must be paid proportionately from all pension options held. Therefore, in market downturns, there would be some selling at depressed prices. Am I missing something?
Most large super funds give you an option as to which sectors of their offerings you wish to hold your money. Furthermore, you are allowed to choose the sectors from which you draw a pension.
Some even have an option of allowing you to take, say, 80 per cent from the cash option and, say, 20 per cent from another option.
If your fund does not offer this service, I suggest you think about changing funds.
I have a small super account with Australian Super that I kept open when I heard talk of the changes taking effect from July 1. I have been in touch with the super fund, and they say that I cannot contribute any personal non-concessional contributions, as I am too old. I turn 74 next month. I don’t want to go to a financial advisor and be charged for a financial plan that I don’t need. I just need an answer to whether I can do this, how much I am permitted to put in (I have $400,000). I want to make use of the bring-forward rule to do this. I have made no super contributions for more than a decade.
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To make concessional contributions – the tax-deductible ones – between age 67 and age 75 you must pass a work test, which involves working 40 hours over 30 consecutive days in the financial year you make the contribution.
However, from July 1, when the rules change, you could contribute up to $330,000 as a non-concessional contribution to your super fund using the bring-forward rules.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
Noel Whittaker is the author of Retirement Made Simple and numerous other books on personal finance. Email: noel@noelwhittaker.com.au
Gift or loan? The best way to help your children
Source: Philippines Alive
