Need help for retiree nest egg

Situation is a couple in sixties.
1 retired with 100k super. 1 near retirement and no super.
Good news is house paid off, approx worth $900k in Sydney.

They want to stay in Sydney due to family.
They want to do away with pension but be set up with a place and a good amount of cash for their non working lives in retirement

Any suggestions of a strategy?

Cheers

Scotty

 

forget the family and move away to somewhere cheaper...sorry to be blunt

 

Haha, well in this case they're my in laws. So we're part of the fam they'd be moving from.

Hmmm....

 

Realistically
There is not much they can do other than work.

How much do they need to live on?
How much do they get from the pension, if any?

 

If they sell & downsize, they need to remain below the amount for the assets test otherwise they may lose eligibility for a % of the pension.

Possibly a bit late to start planning however they should see the financial planner who comes with their super fund.

 

I just posted a thread about this. They should wait til the FY16/17 Budget in May !!

 

How much do they need to live on?
How much do they get from the pension, if any?[/QUOTE]

Thanks terry
Live on?
$50,000


Pension for 1 is 150 a fortnight whilst the other is working

 

Thanks Aushousingcrash!

 

Hi @Scotty3

Without pension and/or working and/or downsizing it leaves the super pot of $100k. To provide income of $50k per annum they would need it invested in something that consistently returns 50% per annum which is of course unrealistic. Then there are reverse mortgages which are a scary proposition.

As the others have said, keep working and wait for the 16/17 budget and seek financial advice.

 

Yes that nest egg will probably run out in 2.2 years.

They could possibly rent their house out and living in a cheaper place, but that would effect the pension and would still not be enough to live on. Even if they lived rent free themselves it would not be enough.

 

You could live in your in laws' and rent your property out to tenants

 

Possibly build a granny flat for self and rent the house?

 

This is a great idea.
I was thinking something similar like:
Move to central coast buy a cheaper house with either a granny flat or a house with dual occupancy. Also they'd have so cash reserves too

 

Haha ummm.. No

 

Would they look to invest the additional cash reserves (managed funds etc?) - so cash is not loosing value.

 

They are not too keen on this or investing generally.

I also suggested buying 2 properties. 1 to live in with GF and 1 to rent out.

 

The house could be transferred to intended beneficiary family member/s under a formal family agreement whereby your in-laws get to stay in their house, that is no longer considered their asset for Centrelink or Aged care purposes, and claim the full aged pension for the rest of their lives. In return for receiving this generous portion of a large value asset that is now in their names, these beneficiaries would pay equal shares of the house rates, insurance, maintenance and possibly amenities, thus relieving your in-laws of paying this financial burden themselves and giving them more disposable income than they would otherwise have. Other "in-kind" financial support, which I'll leave up to your imagination, could also be provided by these beneficiaries to further bolster your in-laws effective disposable income. In short, a properly set up family agreement could easily achieve your desired outcome.

 

This type of arrangement would likely be deemed a gift under Centrelink gifting rules?

 

I would not encourage any of this event. Many stories about this which causes family breakdown. older person was asked to leave the home and became homeless because they no longer owned a property legally

 

As they are asset rich and cash poor I would look to sell the house and rent.

We are currently in the opposite position to their existing position having downsized to a rented Melbourne apartment with close to $1 million in super and cash, but no fixed assets.

With rent at $20,000/annum we can last a long time with pension and rent support kicking in down the track.