Retirement Planning & the Pension

Congratulations - site looks great and I feel it's going to be of tremendous benefit to us all.

We have some investment properties which have done quite well over the last 4 years (lucky timing) as well as Navra shares and some money invested in the Navra share fund. Unfortunately we started investing a bit late in life because we had not realised we could actually use the equity in our PPOR to improve our situation.

Have some good equity in the properties, not a great deal of super and pretty average incomes. In other words, not enough to live on yet but too many assets to qualify for the pension in a couple of years

Problem is we are fast approaching the senior years and need to start doing some retirement planning. Is anyone able to pass on some recommendations of people who are good in this area and can provide solid advice which we can use in conjunction with Steve's structures. We need to do some more work with Navra but would like to educate ourselves in planning for retirement so we can make informed investment decisions taking into account the overall picture.

coops,

I assume you are a Navra client? If so, I would suggest the best thing to do is to sit down with your adviser to work out a solution that is best suited to you.

As far as education goes, keep reading this forum and Somersoft, read books (I would recommend Jan Somers, although you've probably already read hers) and just ask lots and lots of questions. Don't be afraid to ask them - the only stupid question is the one not asked.

Mark

Hi Coops,

If you're in Melbourne you could contact Katrina Nicholson - 03 9332 2589

Cheers, Medine

I agree that speaking to an advisor is the best course of action - but surely we can come up with some suggestions about what type of strategies to investigate ?

Anyone ?

Thanks Sim - I think you understand where I'm coming from. We definitely do need to make another appointment with NFS, however retirement planning involves looking at the situation with an eye also on the Social Security income and assets test and positioning yourself correctly.

Some education along the lines of how the system works would be beneficial.

If we can get some discussion happening in this area I would be happy to post some figures and a scenario to get the ball rolling.

Actually, I raised the need for education in this area with Steve at the recent client get together in Brisbane and he commented that this forum was coming and may be the way to go.

Hi Coops,

Generally, there are generally 3 strategies you may wish to consider using in retirement (or a combination thereof):

1) Maximise your Centrelink aged pension. This depends on the value of your investment assets, loans against those investment assets, and deemed income on those assets. If you have too many assets to qualify (this year, you are ineligible to qualify if you have more than $485,000 as a home-owner couple), then forget this option.

2) Maximise your superannuation. If you make the maximum after-tax contribution you can to your superannuation fund, and start an allocated pension, this is taxed very favourably in retirement. Any investment earnings in your allocated pension are tax free, and the allocated pension payments you receive will be taxed very favourably. (Please note, if you borrow money against your investment properties to make an after-tax contribution to your superannuation fund, the interest on the loan will not be tax-deductible, so this is not advised.)

3) Maximise your gearing. This is best and most easily done outside of superannuation. You can borrow up to 95% against your investment properties, and you can take out a margin loan (usually up to a 70% Loan to Value Ratio) against approved shares and managed funds. As long as the returns on your additional investment exceed the cost of the margin loan, you will be doing well.

Note that using any one of these strategies will impact on the other two, so it is very important to get individual advice in relation to your situation.

Hope this helps!

Thanks for setting it all out so clearly MichL. What we need to do now is find someone experienced in retirement strategies who understands the Navra structure to revew the figures for us. Any suggestions?

coops,

If you have questions regarding your pending retirement and structure, just come and see us in the office. Roger would be more than happy to sit down with you I'm sure. That way we can gain a more accurate perspective of what it is you wish to learn and can move forward from there.

Mark

Coops,
Have you also spoken to your local Centrelink FIS (Financial Information Services) Officer? They will certainly (or at least they should...) give you independant information (not advice!) on current legislation on pension/super limits/RBLs/annuities etc and how they might apply in your situation. hey, your taxes have paid for their services, might as well use them if only to expand your knowledge. If you happen to be in Canberra I can give you the name of an excellent person to speak to.
BSB

Hi BSB

Thanks for that idea. It makes a lot of sense to understand the Centrelink income and assets test - then maybe we can structure our investments so as to maximise our chance of receiving that all important health care card as well as any pensioner discounts being offered.

Whilst we do need professional advice, I feel it is important to learn as much as possible along the way as ultimately it is up to us to make the final investment decisions. I feel our society is lacking in financial education and knowledge so am trying to understand as much about our options as possible.

Unfortunately I am not in Canberra but thanks for your offer. Maybe someone on the Forum has dealt with a particular person in Brisbane.