Ask Noel

I work full-time and will be turning 60 this year with no plan to retire just yet. I would like to start a transition-to-retirement (TTR) fund. Can I start this by rolling over my current super fund to a retirement pension?

I work full-time and will be turning 60 this year with no plan to retire just yet. I would like to start a transition-to-retirement (TTR) fund. Can I start this by rolling over my current super fund to a retirement pension?

You can certainly start the income from your current fund if it has facilities to offer a TTR. Just keep in mind that you cannot make contributions to a fund that is in pension mode, you will need a separate accumulation fund.

I am 53, live alone in my own home and have a partner who lives in his own rented place. Our finances are separate at the moment. My home is worth $380,000 no mortgage. I have two investment properties worth $820,000, with total loans of $260,000, pay $800 a week in mortgage repayments and receive $780 a week in rent. I expect the mortgages will be paid off in six to eight years. I earn $63,000 a year, plus super, and am considering salary sacrificing $5000 a year into super. My super balance is $93,000. I'm planning to pay off the mortgages as soon as possible. Should I sell one or both investment properties and put the money into super or should I keep them while I am still working full-time? Negative gearing is not doing me much good as the loan amount goes down, and maintenance of the properties and tenancy problems are ongoing. Given the weakness of the sharemarket, is it a good idea to build a share portfolio with blue-chip stocks to receive dividends as part of my future income rather than salary sacrificing into super?

You appear to be well on track for a secure retirement. My preference would be to hold the properties if they are well located instead of selling them now when the property market is down. Don't be concerned if you are losing on negative gearing because the government is paying only about a third of the shortfall the lower the debt, the more you'll have in your pocket. I would certainly treat this as a great time to be investing in the sharemarket but I suggest you enjoy the best of both worlds by salary sacrificing into super to the maximum and then investing in blue-chip shares within super.

I have a 16-year-old son who has a savings account. It will soon earn interest over $416. Being 16, I don't think investment bonds are suitable as he will probably want to access the money within 10 years. What are the other options to avoid paying the 66 per cent tax rate on the interest?

Money placed in investment bonds is not locked up for 10 years, it is accessible immediately. Certainly, you need to have the bonds for 10 years for all the proceeds to be redeemed tax-free but, even though the accrued income is taxable, if the bonds are redeemed before eight years, the 30 per cent tax rebate that goes with early redemption means they are tax-free for anyone earning less than $80,000 a year. My recommendation is to stick with the bonds.

I have $48,000 in my pension fund and $42,000 in super. I work full-time and salary sacrifice $700 a month, and also $50 a month after tax into super. My gross income for the year is less than $50,000. I turned 65 last November but enjoy work and have no retirement plans. Given what's happening in Greece, is it a good idea to transfer my pension account into a term deposit? My super is in a capital stable fund. Since super is ongoing through full-time employment, I'm only looking at the pension fund, which is just sitting there.

In my experience, there has never been a time when bad news from some part of the world has not made headlines. You need to decide on an asset allocation that fits your risk profile, and stick with it. Remember, you may have 30 years ahead of you.

Advice is general readers should seek their own professional advice.

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


Our mother lived in her house until her death 15 months ago. My brother and I are the beneficiaries and understand if we sell within the two years we are excluded from capital gains tax. I have moved into my mother's house and my brother is thinking of renting part (30 per cent) of the house out as he will not be there, and because he is entitled to do so. I, however, will receive no rent as I'll be residing there and I'm happy with this. I have decided to live in the house for the next four or five years, but when the time comes to sell, will I have to pay CGT?

If the house was always your mother's residence, the only CGT that could apply would be on any increase in value from the date of her death. If you use the house as your principle residence until you sell it, there will be no CGT on your share.

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