Ask Noel

I am 47 and working on a two-year contract earning $60,000 a year. My husband is 53, self-employed as a writer and earns $10,000 a year. We have been back in Australia for three years, having been overseas for the past 20, and have negligible super of $6000. We have $70,000 in cash and are wondering how best to invest this money. Do you think we should buy a unit to rent out, or do you think we should leave the money in a high-interest account and buy an "Over 55" property to live in once my husband turns 55?

If you definitely intend to buy a property at 55, the best place for your money is in the bank, as there will be no entry or exit fees and you will be immune from market volatility. But if you're going to build a portfolio, you'll have to take advice and decide whether residential property or shares will best suit your risk profile.

I am 58, own my home and have two properties, which have interest-only loans being paid by rent they are enjoying good capital gain. I work for a large bank and recently set up my own self-managed super fund. I have $125,000 in my employer's fund and want to roll this over to my super. I hope to retire within five years, depending on the sharemarket. I also share trade and have a number of shares I'd like to have in the fund rather than owned in my name. I realise that once they go in, they need to be held there as an investment, not regularly traded. Is it possible to transfer the shares to my SMSF? I'm concerned I will pay capital gains tax if I sell them and contribute it to the fund.

The bad news is you cannot avoid CGT by transferring assets in specie because the transfer will be treated as a disposal for CGT purposes. However, you can trade regularly inside your SMSF if you wish to, though because of recent laws, gains and losses will be subject to the CGT provisions and cannot be treated as trading stock unless the assets were held as trading stock prior to May 10, 2011.

I am 57, working part-time, and my husband is 61, working in the mining industry. The money has been great, but I think the bubble will burst soon. We have an investment portfolio loan for $50,000 in joint names for a portfolio worth $40,000. We have been paying interest only of under $300 a month for five years. We have a rundown rental property in my husband's name in a great suburb, earning $230 a week. We would like to buy another investment property it is in excellent condition at a great price of $299,000, and the suburb is due for a resurgence. What do you think?

Only you can decide if buying an investment property is a better strategy than increasing your share portfolio. However, if the property is well located, and your income is secure so you are able to cope with vacancies and maintenance, I see no reason why not. In view of your ages, you should be trying to pay off debts as quickly as possible.

Before I turn 60 in November, I have to choose between a lump sum of $286,000 or a defined benefit pension for life of $620 a fortnight indexed to inflation, with my spouse getting two-thirds of the pension should I die before her. If the choice is at all complicated, I would go for the pension. Or is it a no-brainer?

Your decision should turn on your experience and confidence in handling lump sums, how long you think you will live and how much money, if any, you wish to leave to your beneficiaries. If you believe you can live happily on the pension and expect a long life, I would agree the pension would be best.

What minimum percentage do you recommend average workers should save into their super funds throughout their working life to gain a retirement income of at least 40 per cent of their wage?

A rule of thumb is you need to accumulate in super 12 times your expected annual expenditure when you retire. The proportion of your salary you need to invest will depend on your risk temperament because the highest returns should come from shares, but you also need to be prepared to accept volatility. You also need to take into account the possibility of your partner having a job and what bequests you might receive from family members.

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

My wife and I are both aged 61, in full-time employment and earn $180,000 combined a year. We have $600,000 in super, no debts and own a suburban apartment plus a rural weekender. We will soon receive $650,000 from an inheritance and the sale of another property. Should that money be ploughed into our super accounts or are we better looking at another investment? We don't anticipate any need for income from investments until we both retire in about five years.

In view of your high tax bracket, my preference is to contribute it to super as a non-concessional contribution. There will be no entry tax and you'll move it to an area where tax on its income is just 15 per cent. You should be able to take advantage of the three years bring-forward rule, which enables a one-off contribution of up to $450,000 a person. But take advice because there are very heavy penalties for getting it wrong. You could also take advice on a transition-to-retirement pension. If you start one of these the income will be tax-free as you are over 60, and the fund itself will cease to pay tax. Once the contributions are made, take advice on investment options inside super.