Hi, we are a couple considering an investment property as a potentially low risk alternative to Super. We are perhaps not what might be considered your "average" couple. There is a 17 year age difference. One of us is turning 60 soon and not working and hasn't been working for some years now. The other is 42 and is working full time. We believe the age-gap and our situation could be beneficial financially. That is assuming full time employment continues then the income from the older person, when taken, can be used to provide savings. That is, we've spent some years now living how we live one just the one income, so any extra wouldn't be needed. Financially:- To all intents and purposes, own our home. We owe 1c on the 300k mortgage and have done since 2008. Our annual income is from a 68K AUD salary. We are saving $450 per month into an account which has around 62K AUD in it. The older member has a Super fund with 285K AUD. The younger member has 120K AUD in Super. Additionally the older member has 3 UK Pensions. Two of which mature in five years. The other may or may not mature soon (i.e. at Age 60). If so, then this should realise a lump sum of 7K GBP and an annual amount of 1200 GBP rising to 1700 GBP at Age 65 as an Annuity (probably not relevant is that it should also include a "on Death/(Window(er)'s" Life Time Annuity at 50% of the former. It is anticipated, based upon guarantees and existing bonuses (info on the bonuses is pretty old) that at 65 the pensions combined will produced around 20K GBP pa, this would at Age 67 be complimented with a UK pension of 7K GBP. As a ball park figure, say about 40k AUD pa (this excludes Super income which would be around 15k based upon the 5% minimum (from age 67)). We have started considering matters due to the perhaps to mature very soon pension. Initially the first thought was to channel the UK income and Super income (from age 65-67) into Super or if not possible into the savings (62K AUD). However a couple of people had a stall at the local shopping center advertising 10 year guaranteed rental income (not DHA) with houses from 364K. This prompted thoughts of investing in property as an alternative. We aren't that keen on units though. Hopefully we can get some ideas here on the feasibility or be made aware of any misconceptions. Oh, the might pay now is a due to what were buyout policies. That is you worked and paid into a company pension scheme (defined benefits). If you left the company you would become a deferred member of the scheme. If the sharks got a sniff of this they would try to sell you a buy-out scheme for which pretty high commissions were paid. These schemes had some legal requirements in that they were required to cover a Guaranteed Minimum Pension (GMP) which was guaranteed to rise at 8.5% ( pre 1988 GMP's) and () 7.5% (post 1988 GMP's). e.g. at inception the GMP on ours was 190 pa and will be 1791 pa in 2022. As this was already guaranteed by the UK Government, the sharks had to add goodies in order to sell. One such goody was payout from 60. In short some of the goodies were too good and it looks as though there will be insufficient funds to but the annuities at age 60. However, the contract itself clearly obliges the purchase of the annuities. A similar case went to the Pension's Ombudsman in the UK and directed the Insurer to back date to age 60. We are currently in the pre Ombudsman stage of awaiting comeback from a complaint that the option to select enactment of the plan was not provided. Addition in out situation there is also another 7K GBP which was an endorsement for redress for bad advice, this complicating the matter as obviously the insurer cannot use this but it appears they may have been trying to hide it's existence.
Hi, Welcome to the forum. Just a few comments from me: 1. I would look for growth, even if partner 1 is near 60, s/he still has possibly 25/30 years of living left to do. But also see further comments below. The 40k pension sounds reasonable. Anything with a guaranteed rental income sounds alarm bells... stay away. Anyway, if you invest in anything, look for growth.... and I also think you shouldn't look for anything negatively geared as your combined income isn't high. So imo you need both yield and growth.... I think Brisbane houses will do it, but there's no crystal ball. Think about supply and demand. Demand is currently outstripping supply in Hobart, but it is a fairly small market. I suggest talking with a mortgage broker to know your borrowing capacity. Re: super, not sure how yours is currently invested but I suggest reading the other assets threads, you may be able to get a better return. If I consider your current income, IMO you have a reasonably decent amount of super.
