Ask Noel

I am an Australian pensioner considering Chile as a place to retire. I own a home in Australia and would like to know if I sell it, would I be able to buy a home in Chile without forfeiting my Australian pension?

I am an Australian pensioner considering Chile as a place to retire. I own a home in Australia and would like to know if I sell it, would I be able to buy a home in Chile without forfeiting my Australian pension? I am concerned that the amount of money I would receive in Chile would not be the equivalent of what I would receive in Australia.

Centrelink advises that the age pension can generally be paid for the total period of the absence. However, the rate may change after 26 weeks' absence if the person's Australian Working Life Residence (AWLR) is less than 25 years. The AWLR is the length of residence between age 16 and age-pension age. While the age pension may still be paid, other components of the payment, such as the pension supplement, may reduce, or cease to be paid. A pensioner's principal home is an exempt asset whether they live in Australia or overseas. If the pensioner buys a home in Chile, when they move into the home it will be an exempt asset. When they sell the home in Australia the share of proceeds that will be used to buy or build a new home will be exempt for 12 months from the assets test.

I am a single mum aged 54, with two children aged 14 and 12. My home is worth $450,000, and I have super worth $420,000. My net wage is $2060 a fortnight and I salary sacrifice $400 a fortnight into the cash component of my super. I receive $300 a week child support and save $200 a month. I hope to work until 61, then retire and do supply teaching for as long as I can. I would like to have a reasonable retirement with enough to pay bills and travel, plus have super to provide for me until age 90. Is there anything else I should be doing?

You appear to be very well placed for retirement but in view of your age, I would be salary sacrificing to the maximum to take advantage of the tax benefits that super offers. The cap is $25,000 a year from all sources. You should also have regular meetings with your adviser to ensure that your asset mix in super is appropriate for your goals and risk profile. If you hope to live to 90, you must keep in mind that you've got 36 years of investing ahead of you.

In 2009 I took a gamble and locked in my mortgage of $270,000 at 7.49 per cent for 10 years. This looked good until the recent tumble in rates. Would you recommend my renegotiating with my bank or would the fees outweigh the benefits? Do you expect rates to stay low for a considerable period?

I expect rates to stay low for at least a year or more but the problem you face is that the exit costs to move from a fixed to a variable rate will probably be at least as much as you would save by having a lower interest rate.

I have been salary sacrificing $2000 a month into a balanced fund. However, with the current uncertainty in Europe I wonder if, for the time being, I should contribute the $2000 into a capital-guaranteed fund to avoid loss?

The great benefit of monthly contributions is that you are practising dollar-cost averaging, which should enable you to boost your profits when the market recovers. My preference would be to leave things as they are but if you are particularly nervous you could certainly move to the capital-guaranteed area to stop any further losses. If you are still worried, another option would be to move the entire balance to the capital-guaranteed area but continue to place your monthly contributions into the balanced area.

Recently the husband of a friend passed away in a horrific accident. He had super and life insurance however, with the police and coroner involved, it appears it may take months before a death certificate is issued. Without it, my friend cannot access his super or life insurance. An interim certificate has been issued to her but the funds won't accept it until the police investigation is finalised and a "proper" certificate has been issued. I'm a sole parent and have life insurance and super but if something unexpected happens to me I need to ensure my family is able to keep the mortgage payments going, and can eat and pay the school fees and meet all those everyday expenses. What products are available that, without a death certificate proper, I can make sure my family can survive financially until my super and insurances are accessible.

Unfortunately this does happen the life cover can only be paid out once a cause of death is determined. There is no other cover a client can take out in the event of death. Another option may be to have savings in a joint account that can be easily transferred to the remaining account holder, but I appreciate this may not be available in this case.

I am recently retired and receive a part pension. Due to my circumstances, I have no home but $200,000 deposited in an online account because I need to protect my capital. I live rent-free with a long-term friend. I understand I can earn up to $18,200 a year before I must pay tax. Is the pension included in the calculation of my annual income for the purposes of paying tax? If not, am I able to earn casual income and bank interest to a total of $18,000 before paying tax?

If you are a single person and are eligible for the senior Australian tax offset, you can earn $30,684 a year and pay no tax. This includes income from all sources, including the age pension. A pensioner can earn $6500 a year from employment this money is not taken into account when assessing their eligibility under the income test.

Email: noelwhit@gmail.com.

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