Ask Noel

I'm 57 and my wife is 55. We have $830,000 in a self- managed super fund, plus cash and shares of $205,000.

I'm 57 and my wife is 55. We have $830,000 in a self- managed super fund, plus cash and shares of $205,000. We own our home, worth $550,000. We owe $4000 on our credit cards and also pay $800 a month for two more years on our car. I'm self-employed but with the poor economy I'm barely making a profit and, to be honest, I have just about had enough. My wife works three days a week and earns $30,000. We've one dependant child attending university until the end of this year. Do we have enough super for me to retire comfortably now or will I be better off to stick it out until I'm 60 so that I pay no tax? My wife enjoys what she is doing and is happy to keep working.

You can withdraw $165,000 from your super tax-free once you stop work so there is no reason to work until 60 just to be able to withdraw your super tax-free. How much you will need to retire on depends on such variables as the state of your health, how long you live, and the rate of inflation, but with financial assets in excess of a $1 million, you are well placed. The fact that your wife will continue to work means you will not need to draw as much as you would if you were both unemployed. An ideal situation would be for you to find a part-time job you enjoy it would almost certainly pay you more than you're getting at the moment.

I am 58, divorced, work full-time earning $83,000 a year and have one child still living at home. I have a $350,000 mortgage, no savings, and am finding it increasingly difficult to meet the mortgage repayments, although I haven't missed a payment so far. My home is probably larger than I need but I would prefer not to move as I love it. I have $446,000 in super $383,000 is a defined benefit component and $63,000 is an accumulation fund. I'd like to retire at 60 and have been considering using my accumulation super to repay my bank debt on retirement however, this would leave me with insufficient funds to live on for the rest of my life. My employer has assured me of part-time work and I also have an inheritance of $350,000, which would be realised in the next 10 years. Is my idea sound or ridiculous?

It's a sad fact of life that the future is promised to no one and, unfortunately, it is not uncommon for people you know to die suddenly. Therefore I suggest you follow your dreams, particularly as you are assured of part-time work to supplement your resources. The bulk of your super is virtually capital-guaranteed as it is a defined benefit fund, and your inheritance, when it comes, should mean you have enough assets for the rest of your life.

I'd like your opinion on a method I'm using to repay an investment loan. It was originally $295,000 and interest was paid in advance. My husband died and my accountant suggested I revert to a repayment loan. On checking with the bank I found that if I repaid $100,000 and then paid fixed-interest in advance on $195,000 for one year, I'd pay much less in interest. The bank has written saying my loan was to expire on June 30 and revert to a repayment loan of $1739-a-month payments ($20,868 a year). However, if I take another prepaid fixed-interest loan for one year, my interest in advance will be $12,000 at 6.14 per cent. I can further reduce the outstanding amount with the $8000 I've saved (or more if I have it) before taking out the next one-year loan. I'd like your opinion.

The main benefits of paying interest in advance are that you get the tax deduction in the current year, and you also fix the interest rate for the next 12 months. Your best option will depend on your tax position your accountant or financial adviser will be able to do the numbers for you and work out what the best option is for minimising tax.

Advice is general readers should seek their own professional advice.

Contact noel.whittaker@whittaker macnaught.com.au. Follow him on Twitter: @noelwhittaker. Questions to: Ask Noel, Money, GPO Box 2571, Qld, 4000, or see moneymanager.com.au /ask-an-expert.

I'm 27 and my wife, 26, has just fallen pregnant. I earn $85,000 plus super and my wife earns $72,000 plus super. We own a one-bedroom flat we bought for $380,000 in 2007. It's valued at $460,000 and would rent for $470 a week. Our mortgage is $280,000. We'll be staying with our in-laws until the baby arrives and aim to save $70,000. To take advantage of our lower living costs for the next eight months, should we pay off the mortgage or put the savings into a high-interest savings account? We plan to rent for two years until my wife is back at work and eventually buy a house. We're happy to rent, as we'll be earning interest from the savings. Would it be best to sell the flat now and then put all the funds into a high-interest account after the baby is born, or keep the flat and start to build on the $70,000 deposit?

In view of the high cost of selling and the present depressed state of the property market, my preference is to hold and re-examine your options in two years. The best place for your savings in the meantime would be an offset account linked to the mortgage.

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