Hi All,
We have about $500K savings in a bank Superanuation managed fund (CFS). We plan to setup a Self Managed Superanuation fund (SMSF) and transfer this money to it. We will then buy an IP (+ stamp duties & other costs) to the amount of $450K (leaving $50K bucket in cash). Rental income (- expenses) will be taxed at 15%. When we turn 60 we will will convert this SMSF into an income stream and pay no tax.
Our annual income from the SMSF has to be a minimum of $20K (4% of $500K). With the current rental situation we will will get about $13.5K or 3% return after expenses. The $6.5K difference will be from the cash bucket. Hopefully the retal return will be at least 4% before our cash bucket empty.
We are seeking your advice in regarding the Pros and Cons of the above option, what else we need to know and should allow for. At the moment we have 1 IP (negative geared at 30% tax rate with a loss of $8K/year net) and will receive a public service superanuation pension of $80K/year combined when we retire in 2 or 3 years time.
Best Regards
Huey
We have about $500K savings in a bank Superanuation managed fund (CFS). We plan to setup a Self Managed Superanuation fund (SMSF) and transfer this money to it. We will then buy an IP (+ stamp duties & other costs) to the amount of $450K (leaving $50K bucket in cash). Rental income (- expenses) will be taxed at 15%. When we turn 60 we will will convert this SMSF into an income stream and pay no tax.
Our annual income from the SMSF has to be a minimum of $20K (4% of $500K). With the current rental situation we will will get about $13.5K or 3% return after expenses. The $6.5K difference will be from the cash bucket. Hopefully the retal return will be at least 4% before our cash bucket empty.
We are seeking your advice in regarding the Pros and Cons of the above option, what else we need to know and should allow for. At the moment we have 1 IP (negative geared at 30% tax rate with a loss of $8K/year net) and will receive a public service superanuation pension of $80K/year combined when we retire in 2 or 3 years time.
Best Regards
Huey