Personal Finance
Newcastle Herald
Thursday January 8, 2009
Q I am more than 60 years of age, am not working, and have $110,000 from a super fund. I want to invest in a term deposit or some safe high-interest account and then return the money to super in say six to 12 months. Is this feasible? What type of accounts should I look at?
A It is certainly possible to remove the money from super tax-free and recontribute it before you are 65. However, I wonder why you need to do it as you could switch the money to a cash option within super if you were concerned about market movements. One benefit of your proposed strategy is that you would be converting $110,000 of the taxable component into the non-taxable component, which would have tax savings if you died and left the money to a non-dependant.Q Early last year I took a gamble and locked in my mortgage of $270,000 at 7.49 per cent for 10 years. This looked good, until the recent tumble in rates, which now look like dropping to an official Reserve Bank rate of 3.75 per cent. Would you recommend re-negotiating with my bank or would the fees outweigh the benefits? Do you expect rates to stay low for a long period?A I expect rates to stay low for a year or more, but the problem you face is that the exit costs to move from a fixed rate to a variable rate would probably be at least as much as you would save by having a cheaper interest rate.QI am 28 years old and will soon be buying my first property for $247,000. I am borrowing 100 per cent of the purchase price and wonder if salary sacrificing the mortgage repayments would be beneficial to me. My salary is currently $52,362.A Unless you are working for a non-profit organisation you would be worse off if you salary sacrificed the mortgage payments, due to the effect of fringe benefits tax. However, if you are working for a non-profit organisation, by all means do it your pay office will be able to guide you.Send your questions to noelwhit@gmail.com.
© 2009 Newcastle Herald
