Advice for a couple in their 60s

Discussion in 'Investment Strategy' started by VDK, 13th Feb, 2019.

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  1. VDK

    VDK Active Member

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    13th Feb, 2019
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    Hi there, we’ve had a few conversations with my parents and I am wondering what the best approach would be for them as they near retirement.

    Scenario:
    1 investment apartment, ownership split half/half. About $150k debt remaining, worth about $350k
    1 investment property that used to be a PPOR, paid off, currently rented out. Estimated at $650-$680k
    1 new house with $400k owing on it, current PPOR.

    One parent semi retired and earns about $30k per annum, another still working making about $90k and intends to work for another 5 years.

    Goal is best outcome for transition to retirement in 5 years time or so, maybe moving interstate/country.

    I know current structure is pretty bad (Low debts on investment, high debt on PPOR) - what would be the best way to go from here?

    Cheers
     
    VDK, 13th Feb, 2019
    #1
  2. Trainee

    Trainee Well-Known Member

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    What do they want? What do they want to live on? Are they willing to sell the ppor? Comfortable with shares? Any super? How much is the new house worth?

    Lots of options, but depends what they are comfortable with.
     
    Trainee, 13th Feb, 2019
    #2
  3. albanga

    albanga Well-Known Member

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    Heya VDK
    What’s the value of PPOR?
    They have around 850k in equity without knowing that figure but I’ll assume it wasn’t highly leveraged so they will likely have over 1mil in equity.
    It’s far from a bad position to be in.
     
    albanga, 14th Feb, 2019
    #3
  4. Indifference

    Indifference Well-Known Member

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    Yes, structure indicates a lack of financial acumen, but at least they have some assets.

    What's their super position?

    At that stage in life I would:
    1. Eliminate nondeductible debt.
    2. Maximize super.
    3. Transition to low maintenance investments.
    4. Create a cash buffer.
     
    Indifference, 14th Feb, 2019
    #4
  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    The low earner could consider selling part of their investment property with the largest equity, to the other, who could borrow to buy it, with the proceeds from the sale used to pay out the main residence loan. Get them to get legal advice on the implications and tax advice on the numbers.
     
    Terry_w, 14th Feb, 2019
    #5
  6. PandS

    PandS Well-Known Member

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    all investment should be in super to maximise tax benefit when you retire
    don't have anything in your name
     
    PandS, 14th Feb, 2019
    #6
  7. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    The OP doesnt mention existing super balances etc. I would consider getting licensed financial advice. There could be merits or no reason to throw everything to super. The plans should also consider future access to pensions
     
    Paul@PAS, 14th Feb, 2019
    #7
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