1.First Question
Hi Craig, I like reading your advice and articles. I want to know if the advise I received regarding my super investment choice was accurate. I am a sixty-five-year-old woman with about $300,000 in a balanced conservative fund. fortunate to own a house, land, and a few shares. Would having it in Balanced be better for me? For the next three years, I plan to continue working full-time. and question whether I will be missing out on some more returns in the conservative balanced fund.
Hi, and I appreciate your feedback.
One of the most crucial things you can do for your super is to choose a suitable investment option.
The majority of people leave their super in the "default" investing option of the fund.
The "Balanced" option is also frequently the default choice for funds. According to a major industry fund, over 85% of its members have chosen to remain in the default choice.
Many people may find that the balanced fund is the best choice, but everyone should at least look over the investing goals and risk category of that selection.
Every super fund is required to specify the standard risk measure for every option it offers. It does this on its investment handbook or website.
By calculating the anticipated number of negative yearly returns over a 20-year period, the Standard Risk Measure (SRM) assists you in comparing investment possibilities.
Balanced funds have outperformed conservative balanced funds by roughly 1.50% to 3% annually during the last five years.
There are significant differences in this, though.
It is also important to keep in mind that even though several funds may call an investment option "balanced," the actual investments it contains may differ greatly from one another.
For this reason, it is critical to consider:
Investment goals
Typical risk assessment
Basis types of investments, such as the proportion of shares and real estate compared to more defensive assets like cash and fixed interest
Minimum investment period suggested.
Because it should hold less volatile assets, a Conservative Balanced option would have a lower recommended minimum time frame than a Balanced option.
However, unless you intend to withdraw funds from your super at that time, your retirement date does not necessarily correspond to your investing period.
You could invest in the same or a comparable investment choice if you want to convert your super to a pension upon retirement, extending the period of time you will be invested.
People ask themselves, "Should I be investing in an option that has been yielding superior returns?" when markets are performing well.
They then wonder, "Should I be investing in an option that has fewer ups and downs and will not lose money?" when markets are down.
If your query indicates that you have already gotten counsel on this matter, I assume that this was based on a conversation and inquiries made by an adviser.
Regardless of the state of the market, you should strive to maintain your investment in the same strategy, one that fits your risk tolerance and time horizon.
Attempting to time the market has the worst outcome.
Alternatively, to lock in losses by switching to a more cautious option when markets are declining.
2.Second query
Hello Craig Both of us are still employed, and my partner is fifteen years younger than I am. Is it accurate to assume that since my partner will continue to work full-time for 15 years after my retirement, I will not be able to collect my pension at all? And that in order to be a completely self-sufficient retiree, I must save? If my savings are insufficient to support me, would I have to collect the pension and perhaps end up divorcing my partner? I would be very grateful for some guidance. Thank you.
If your partner is working and you are not, I would expect they would help support you financially.
Although they are more frequently shared, couples occasionally treat each other's assets and income differently.
It is crucial to have a conversation so that you are in agreement and know where you stand, regardless of the technique you choose.
Couples are treated as "one unit" by Centrelink. Consequently, when you apply for the age pension, your partner's income will be taken into account under the income test.
If the combined income of you and your spouse is less than $3725.60 every two weeks ($96,865 annually), you are still eligible for a partial age pension.
As a result, your partner should contribute, along with your super, other savings, and possibly a partial age pension.
3.Third Question
I am 64 years old and set to retire. I was born and raised in the family home, which I inherited in 2018. I am going to sell it and get an apartment instead. What taxes, if any, will I be required to pay on the selling proceeds?
Regarding the family home, I presume that this served as the deceased's principal abode.
I also inferred from your question that since you inherited it, this has been your primary residence.
There will not be any tax due at the time of sale if both of those presumptions are true.
I advise getting tax advice if my assumptions are wrong.
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