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Need help for retiree nest egg

Discussion in 'General Property Chat' started by Scotty3, 25th Jan, 2016.

  1. Scotty3

    Scotty3 Well-Known Member

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    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
     
  2. S1mon

    S1mon Well-Known Member

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    forget the family and move away to somewhere cheaper...sorry to be blunt
     
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  3. Scotty3

    Scotty3 Well-Known Member

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

    Hmmm....
     
  4. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    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?
     
  5. Scott No Mates

    Scott No Mates Well-Known Member

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    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.
     
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  6. aushousingcrash

    aushousingcrash Active Member

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    I just posted a thread about this. They should wait til the FY16/17 Budget in May !!
     
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  7. Scotty3

    Scotty3 Well-Known Member

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    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
     
  8. Scotty3

    Scotty3 Well-Known Member

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    Thanks Aushousingcrash!
     
  9. JacM

    JacM VIC Buyer's Agent Business Member

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    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.
     
  10. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    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.
     
    Last edited: 26th Jan, 2016
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  11. thegreat

    thegreat Well-Known Member

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    You could live in your in laws' and rent your property out to tenants;)
     
    Last edited: 26th Jan, 2016
  12. monalisa

    monalisa Well-Known Member Premium Member

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    Possibly build a granny flat for self and rent the house?
     
  13. Scotty3

    Scotty3 Well-Known Member

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    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
     
  14. Scotty3

    Scotty3 Well-Known Member

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    Haha ummm.. No
     
  15. monalisa

    monalisa Well-Known Member Premium Member

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    Would they look to invest the additional cash reserves (managed funds etc?) - so cash is not loosing value.
     
  16. Scotty3

    Scotty3 Well-Known Member

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    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.
     
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  17. HomePage

    HomePage Well-Known Member

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    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.
     
  18. Beyond Wealth

    Beyond Wealth Active Member

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

    thegreat Well-Known Member

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    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
     
  20. bashworth

    bashworth Well-Known Member

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    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.