ASK NOEL

I'm 49, earning $65,000 and my wife is 44, earning $55,000. We have two kids, 14 and 11. We're thinking of moving to another suburb for better schooling. Our home has a mortgage of $260,000 with $450 weekly repayments. It's worth $400,000. Do you suggest we sell our home and buy in the new location, or should we rent out our home and rent near the school?

I'm 49, earning $65,000 and my wife is 44, earning $55,000. We have two kids, 14 and 11. We're thinking of moving to another suburb for better schooling. Our home has a mortgage of $260,000 with $450 weekly repayments. It's worth $400,000. Do you suggest we sell our home and buy in the new location, or should we rent out our home and rent near the school?

In view of your relatively low incomes and the high cost of selling and rebuying, my preference is to rent elsewhere, but keep the present home, provided you are happy to live in that home when the children have completed school. You would receive substantial tax concessions and would not lose the CGT exemption provided you returned to the property within six years and did not claim any other properties as your principle residence in that period.

I read about Retirement Savings Accounts and their role in self-managed super funds. I have cash and term deposits. What's the difference between a RSA and deposit account in the name of the trust and the advantages?

An RSA is a bank account that sits within the super system. They were originally designed as a simple, low-cost product for small super balances. You could shop around but you will most likely find the best investment for your SMSF is a high-yielding term deposit with one of the major institutions.

Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature. Readers should seek their own professional advice before making decisions. Email: noelwhit@gmail.com.

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