‘I lost $60K on bad decisions! How should I use the money I make when I downsize?’

May 17, 2019
When most of your wealth is tied up in your home, making the most of your property sale proceeds is vital. Source: iStock.

Q. When I retire in about three years’ time, I will own my home, worth approximately $430,000. The only money I will have will be my superannuation balance of approximately $350,000. My partner, who will be 70 when I retire, has no money at all. Given my assets, will we still get the full Age Pension?

A. It’s dangerous to predict three years ahead because the laws may change. But as it stands your home will be exempt, and your money in superannuation will be subject to the deeming rules.

I suggest you go to my website www.noelwhittaker.com.au and look at the deeming calculators, followed by the Age Pension calculators. That should give you a good indication.

Q. I am about to turn 60 and am no longer work after caring for my partner during his illness for the past four years. He has now passed away. I own my home outright, which is worth about $450,000 and I’m about to sell it. I bought a unit to move into from my current house, which cost $260,000. I bought the unit outright. I have only $45,000 in super. Once I sell my house, what should I do with the $450,000? My measly superannuation, plus the money from the sale of the house, is all I have in the world. Please help me decide what to do, as I have already lost about $60,000 from making really bad decisions.

A. You may have as much or more than 30 years or life ahead of you, so it’s important to have a balanced portfolio with some growth assets. I suggest you talk to a good financial advisor about a balanced portfolio that fits your goals and your risk profile. Alternatively, progressively contribute the proceeds to superannuation without exceeding the limits, and choose a conservative asset mix.

If you have a question for Starts at 60’s money experts, email it to [email protected].

Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.

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