My question is what to do with the proceeds of the sale of the second property? After CGT,we will have roughly $1.2 million.I am in my early 50s,and I am looking to wind down from work when I return,hence the desire for that $1.2 million to generously supplement any future income I attain upon my return.
Being a landlord can be a headache,but choosing where to invest your proceeds can also be challenging.Simon Letch
I’d be keen to understand whether in addition to requiring income from these proceeds,you are also after capital growth or at least preservation.
If the clear priority is income generation,then I would set up an investment portfolio using a wrap facility with a mix of US,and Australian share exposure,perhaps combined with some infrastructure and listed property holdings. US shares would make up the largest exposure,as historically,they have produced the best long-term growth outcome.
I would then set the wrap facility up to distribute out to you a fixed amount each month,with it automating the required sell-downs based on predetermined proportions across the different assets.
With this approach,you can draw down the precise amount of income that you require,on a consistent and dependable basis.
Potentially,however,this may not work for you if capital preservation and/or growth is a priority,as the drawings will occur irrespective of what the investment earnings are.
If an unstated requirement is that your capital is preserved,then you would likely go with an Australian share portfolio,with a bias towards high-yielding investments,such as the banks.
Note,however,that whilst this will produce income for you,the income will be lumpy,with companies only paying dividends six-monthly,and somewhat unpredictably.
It’s probable that your total return will be lower with this arrangement than the earlier suggestion,as high-yielding Australian shares have tended to exhibit low levels of capital growth,but of course none of us possess a crystal ball.
I’m 64 and have been retired since I was 57. I have approximately $800,000 in a super pension,from which I draw down 6 per cent annually. My husband,also 64,has a PSS pension of $63,800 net after tax.
Next month,I will receive an inheritance from my mother of approximately $180,000. My preference is to allocate $150,000 to super.It has been suggested that I could open an accumulation account,deposit the $150,000 using bring forward provisions and then switch the account to pension mode.
If I do this,can I then combine the two pension accounts? Also,is the monies deposited into the accumulation account subject to 15 per cent tax?
There are various caps and limits to be mindful of here,but from the information you’ve provided,it would appear that you could contribute $150,000 into super as a non-concessional (ie. after tax) contribution. There is no tax levied on this contribution type.
To then merge this with your existing superannuation pension,you would have the existing pension rolled into the new accumulation account that you just created,and then once the money is all together in one account,convert that account to a new pension.
Given the sums involved here,the complexity around contribution limits,and the mechanics of bringing this money together into a single account,I’d urge you to obtain help from a qualified financial planner.
Paul Benson is a. Questions to:
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