ASK NOEL

WE ARE a couple aged 31 and 37. We came to Australia in 2009 and will be staying. We are planning to buy a house and our monthly mortgage repayments will be $3000. Our combined income is $110,000. We don't have children and we have only $15,000 combined in super. We have ailing parents who live abroad and we visit them every year. We need your advice on how to save for our retirement.

By InvestSMART · 12 Nov 2011

By InvestSMART ·
12 Nov 2011

Comments

This is the perfect time to be forming a relationship with a financial adviser, who should be able to help you clarify when you want to retire and how much you will need at that time. As a general principle, I feel your first step should be to get your mortgage under control and then think about diversifying into growth investments such as shares.

I am 23 and earn about $55,000 a year. I have a HECS debt of about $20,000 and also a first home owners savings account. The government is offering a 10 per cent discount for all voluntary HECS repayments. I am yet to start making payments. I am planning to travel in the near future and will not be earning money during this time. I am in a position where I could pay off my HECS debt in total. I am not sure if I should put my money towards this debt or if I should keep it in a high-interest account and just make compulsory HECS repayments once I re-enter the workforce after travel.

My advice is to pay off the HECS debt and enjoy the 10 per cent discount, then you can make future plans secure in the knowledge that your HECS debt is gone for good.

Noel Whittaker, AM, is a co-founder of Whittaker Macnaught. Advice is general and readers should seek their own professional advice. Contact noel.whittaker@whittakermacnaught .com.au. Twitter: @NoelWhittaker

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Frequently Asked Questions about this Article…

Should I prioritise paying off my mortgage before investing for retirement?

According to the article, the recommended first step is to get your mortgage under control before moving on to retirement investing. Once your mortgage is manageable, you can start diversifying into growth investments such as shares to build long‑term retirement savings.

Is now a good time to form a relationship with a financial adviser for retirement planning?

Yes. The article suggests this is a perfect time to form a relationship with a financial adviser who can help you clarify when you want to retire and estimate how much you’ll need, then create a tailored plan to reach those retirement goals.

How should everyday investors diversify into growth investments like shares?

The article advises considering diversification into growth investments such as shares after you’ve brought your mortgage under control. A financial adviser can help determine the right mix of growth assets based on your risk tolerance and retirement timeline.

What can couples in their 30s do if they have a low combined super balance?

For couples with low super balances, the article recommends first tackling big liabilities like a mortgage. After stabilising debt, focus on building retirement savings by contributing to super and diversifying into growth investments (for example, shares) with advice from a financial professional.

Should I pay off my HECS (student debt) early to get the 10% government discount?

The article’s clear advice is to pay off the HECS debt and take advantage of the 10% discount on voluntary repayments. Eliminating the debt provides certainty and frees you to make other financial plans without that liability.

If I’m planning to travel and won’t be earning, should I keep savings in a high‑interest account or pay off HECS before I leave?

The article recommends paying off the HECS debt to secure the 10% discount, rather than postponing repayment while holding cash in a high‑interest account. Once the HECS debt is gone you’ll have more flexibility during and after travel.

How should I balance a $3,000 monthly mortgage on a combined income of $110,000 while saving for retirement?

The article suggests prioritising getting the mortgage under control as the immediate focus. After stabilising mortgage repayments, start allocating funds toward retirement by diversifying into growth investments like shares and seeking personalised guidance from a financial adviser.

Who gave this advice and should I seek my own professional guidance?

The advice in the article comes from Noel Whittaker AM, co‑founder of Whittaker Macnaught. The article notes the advice is general and recommends readers seek their own professional financial advice tailored to their individual circumstances.