ASK NOEL
Sydney Morning Herald
Saturday February 5, 2011
I could retire this year when I turn 65 and will have $390,000 in super. Once I've cleared the mortgage and debts, there should be $370,000 remaining. My wife, 59, wants to continue working part time for a couple more years. Given the poor performance of super funds and the fact I could get 7.25 per cent for a three-year term deposit, it seems I'd be better off taking a lump sum and investing in a term deposit rather than super, which, if history repeats, will only just keep up with inflation.You have possibly a 20-year investment frame ahead of you and you should have at least part of your funds in growth assets such as property and shares, which, in the long term, should outperform cash. Get advice on the best mix of assets. The longer your wife works, the better. Be aware account-based pensions have an advantage when a person is being assessed by Centrelink, so make sure your adviser does the sums before you exit the super system.I'm 37 and have $10,000 in super. Since I became ill in 2001, I haven't contributed anything and I don't know what to do with this money because my working options are not viable. Centrelink believes I have a case to claim my money with an early release.If you have been on Centrelink benefits for at least 26 weeks and are unable to meet reasonable and immediate family living expenses, you might have a case for early release of the benefits due to financial hardship. You will have to apply to the trustee of your fund but bear in mind you could lose 21.5 per cent in tax if you withdraw the money before age 55.Noel Whittaker is a director of Whittaker Macnaught. Advice is general and readers should seek their own professional advice. Contact noel.whittaker@whittaker macnaught.com.au.
© 2011 Sydney Morning Herald
