ASK NOEL

I'm 54 years old, with a wife and two kids aged 14 and 10. I work full time on a salary of $110,000 a year. My wife has a home-based business earning $5000 a year. We have $120,000 in super. Our home is worth $950,000, with a mortgage of $195,000. What strategy could you suggest for me to accelerate my net worth so I can retire by 65 with no mortgage and a reasonable sum in super? Is investing in one or more rental properties advisable at my age?

I'm 54 years old, with a wife and two kids aged 14 and 10. I work full time on a salary of $110,000 a year. My wife has a home-based business earning $5000 a year. We have $120,000 in super. Our home is worth $950,000, with a mortgage of $195,000. What strategy could you suggest for me to accelerate my net worth so I can retire by 65 with no mortgage and a reasonable sum in super? Is investing in one or more rental properties advisable at my age?

You should be salary sacrificing to the maximum, $25,000 a year from all sources, even at the expense of reducing mortgage payments. This will enable you to take advantage of the 15 per cent tax rate on concessional contributions. Now is the time to form an association with an adviser to help you set retirement goals and work out a strategy to achieve them. I doubt that investing in rental property is the best way to go at this time.

My wife and I are considering setting up an investment for our grandchildren. Are share-based insurance bonds best, or is there a better option?

There are a range of options but I believe share-based insurance bonds are the best. Because the earnings accrue in the form of bonuses, there is nothing to declare on anyone's tax return, and after 10 years, they can be cashed in free of tax in whole or in part, or left to grow. Furthermore, they can be transferred to the grandchild free of capital gains tax.

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.