Ask Noel

I am 58 and retired last year. I have $300,000 in an industry fund and don't expect to need to access this for a few years, as I have money in a fixed-term deposit and will use the interest as needed.

I am 58 and retired last year. I have $300,000 in an industry fund and don't expect to need to access this for a few years, as I have money in a fixed-term deposit and will use the interest as needed. My wife is nine years younger, works part-time and earns enough to cover our living expenses. My super fund returns (conservative strategy) are 1.71 per cent (five-year compound average) and 3.91 per cent for 10 years. More aggressive options have returned even less. It appears there would be no tax disadvantage to withdrawing my super and putting it into a fixed-term deposit paying at least 5 per cent, as the returns would still place me in the 15 per cent tax category and I would be earning a guaranteed rate and not paying the management fees to the super fund. Is this correct?

What you propose would give you guaranteed returns for the period of the term deposit but you may have at least 35 years of living ahead. In that period, a diversified portfolio would almost certainly give much better returns than cash. Talk to an adviser and try to agree on a portfolio that suits your goals and risk profile. You could then have an annual meeting to decide if the funds you choose are meeting their benchmarks.

I am 60 and have been working overseas for 12 years. What is the maximum amount I can contribute to super annually without tax?

You can make a non-concessional contribution of up to $150,000 a year or $450,000 over three financial years if you are under 65 in the financial year when you make the initial contribution and a concessional contribution of up to $50,000 for the 2011/12 financial year and $25,000 per year from July 1, 2012. These figures include contributions from all sources. Take employer contributions into account.

I am 59 and earn $100,000 a year. I have an investment property with a mortgage totalling $335,000, at 7.1 per cent interest. I am paying interest only. Should I start paying principal and interest? I also have $50,000 in a term deposit earning 5.9 per cent a year. I was thinking of putting that money towards the loan so I can withdraw it in an emergency. What is best for tax purposes? I salary-sacrifice $45,000 a year and after all the deductions my last year's taxable income was $45,000.

As long as you are working, a better strategy may be to keep the loan on an interest-only basis to maintain the tax benefits while salary sacrificing as much into super as you can. The effective rate on your savings is 4.13 per cent after tax at 30 per cent has been deducted and, while paying $50,000 off the loan is reasonable, you may get a better tax result by contributing it to super as a non-concessional contribution. It is unlikely you will need it while you are working and the super is accessible when you reach 60 and change jobs.

I have had a self-managed super fund (SMSF) since 2004 and transferred a number of shareholdings in my name into the fund years ago via off-market transfers. This was properly and clearly stated in the super fund tax returns. The fund did not reimburse me, though I put a dollar value on the transfers. I turn 55 next year and understand that after-tax contributions to a super fund can then be taken out tax-free. Does this apply to the dollar value of these holdings? Could you recommend a publication that sets out such SMSF matters for trustees?

When the in-specie transfers were made to the fund, the accounts of the fund should have recorded whether they were concessional or non-concessional contributions. If they were non-concessional, they will form part of the tax-free component. If they were recorded in the SMSF's tax returns and tax was paid, they would be concessional contributions. If they were recorded as member's personal contributions, they would be non-concessional. It is important to seek expert advice when dealing with your fund but a useful book is The Self Managed Super Handbook by Monica Rule, available online.

Advice is general readers should seek their own professional advice.

Contact noel.whittaker@whittaker Follow him on Twitter: @noelwhittaker. Questions to: Ask Noel, Money, GPO Box 2571, Qld, 4000, or see


I am 29 years old and have just started earning $100,000 a year in my new job. I have an investment property where I earn $1200 a month in rent and make loan repayments of $1600 a month. I also have about $20,000 in managed funds and share investments. I have estimated that I can save at least $50,000 of my income over the next year. I would like some advice as to where I should invest my money. While I am interested in buying another property, should I diversify my money between other types of investments?

Congratulations on what you have achieved to date. As you have such a large exposure to residential property, my preference would be to continue to increase the money you have in share-based investments. Make sure the loan for the investment property is on an interest-only basis, which will maximise the amount of money that is available for the shares.

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