YOUR QUESTIONS

In a recent column on the subject of gifting by pensioners, would you please explain further "this will be dropped in a year's time", referring to gifting children more than $30,000 over five years, the excess being counted by the means test. We had not heard of any changes to this and can find no reference to it anywhere online, nor could Centrelink give us any information. B.L.

There are no changes announced with regard to the gifting rules. The letter mentioned some pensioners who had gifted a large amount to their children four years ago and the answer noted that amounts in excess of the gifting limits ($10,000 a year and $30,000 over a five-year period) are counted by the Centrelink means tests for up to five years. Thus their gift would be dropped from their tests in one year's time.

BALANCE KEY TO TRANQUILLITY

I would like to know if it is OK to keep some savings in an online account ($100,000), or should I add some to my super fund to avoid being taxed? S.B.

It's generally not a good idea to do something purely for tax reasons. Superannuation is a useful tax shelter but the money is locked away. You need to balance your priorities and, if you are young, you need to consider your need to buy a home, a car, travel around the world and so forth. At the same time you need to save for your retirement and a good rule of thumb is to arrange for 15 per cent of gross salary to go into a low-cost super fund from the start of your working life. In a nutshell, plan to lead a pleasant life and retire with $1 million in super savings!

If you have a question for George Cochrane, send it to Personal Investment, PO Box 3001, Tamarama, NSW, 2026. Helplines: Financial Ombudsman, 1300 780 808 pensions, 13 23 00.