Ask Noel

I am 61, separated, and have an inheritance of $125,000, which I intended using for my children's private school fees. As I will want to withdraw annual fees each year, is a term deposit a suitable investment? Or is there a superannuation component that could meet my needs?

Provided you stay within your cap for the financial year, which is $150,000, the money could be contributed to super as a non-concessional contribution. There would be no entry tax on this. As long as you have satisfied a condition of release, you could then withdraw it tax-free as needed. Make sure you take advice because you should hold the money in a low-risk area within superannuation.

I am 63 and have just been laid off from work. In ANZ super, I had about $61,000, which in six months has gone down to $57,000. I use a transition-to-retirement scheme and the $61,000 is getting eaten away. I also have super with Maritime Super and, several months ago, I had it put into cash and cash enhanced. At present, there is about $80,500 there. I have been thinking of shifting ANZ super to my Maritime account and put it into cash, temporarily stopping transition-to-retirement until I get work again. What are your thoughts?

There is little point in a transition-to-retirement scheme if you are not working, so talk to your adviser about stopping it. Keep in mind the Maritime fund has probably only outperformed ANZ because it is in cash at a time when markets have been falling. I suggest the asset allocation within the fund is more important than which fund you choose.

Contact noel.whittaker@whittaker macnaught.com.au.