Q: I’m 72, work part-time and plan to do so for another three to four years. I receive a part-Age Pension from Centrelink and draw down the minimum pension from my super fund. I plan to move interstate next year and will sell my townhouse in my current location for around $1.7 million hopefully, to buy in my new location for around $1 million.

I would appreciate advice on what to do with the spare money as I understand I can put a maximum of $300,000 into my super – which currently has a balance of about the same amount. So should I put $300,000 into my super or buy an investment property for around $400,000 and maybe rent it out to my daughter. Which would give me the best return for the future and not affect my continuing ability to get a pension? And would I have to pay capital gains tax on the property I sell here to downsize?

A: This is another interesting question. Certainly, the opportunity to use the ‘downsizing rules’ to add money to superannuation is well worth considering. As you only have approximately $300,000 in super at the present moment, I would be inclined to consider adding money to super rather than acquiring an investment property, then putting the balance into a diversified portfolio of non-superannuation investments.

At 72, it is generally preferable, in my view, to look for more liquid and accessible investments rather than residential property.

Another option is to lend money to your daughter, secured against property, to allow her to buy her own home and charge her an interest rate close to the mortgage rate. This could potentially advantage both of you, however, you would need to consider the reaction of other children (if there are any). Any loan should be properly documented, including creating a mortgage on the property.

Additionally, whether you add this extra money to super or non-superannuation investments (including real estate) there will be an impact on your entitlement to the Age Pension. The additional $700,000 on top of your current super of $300,000 would give you assessable assets for Centrelink purposes of $1 million-plus. This would eliminate your entitlement to the Age Pension (assuming you are a single homeowner) and thus you need to ensure you have sufficient additional cash flow from your new investments to compensate.

I would recommend you also consider getting objective financial advice in the circumstances as the wrong decision could have unintended consequences.