Superannunation and Investment property.

[brocky05]

Hey everyone

Im about to go and see a financial advisor finally and to save me looking like a complet dodo wondering if someone can shed a bit of education my way. A bit of background info

1 x IP returning $300 per week hoping to have paid off before 65
1 x PPOR hoping to have paid off by 65
1 x Superfund with 60K currently 33 years old.

Now I salary sacrifice and add 200 per month extra into my super, my long term goal as I have a feeling my super balance at retirement will be dismall what issues will I have with my Investment property etc. My main reason for keeping the IP is to supplement my retirement income then when the time comes I can pass onto my children. All the super calculators etc predict a retirement figure of approx $450K but it shows for the first couple of years I use all of my own money then in the remaining years the government supplements in. I dont really want to rely on the government chipping in or should I rely on them and ditch my 200 extra im putting in a month and put it towards buying another Investment property? Im just unsure of what will happen when I retire and have an IP is their still tax obligations etc?

Also I currently have no income protection life insurance which im sure the financial planner will drill me to get. Just wondering what is an approximate cost per year for this kind of cover?

 

[JamesL]

Unfortunately mate, it's difficult to give you any information without giving you advice...

Generally, some diversification of your investments between IP's and share-based super is a good thing. Without knowing your asset allocation it's hard to comment, essentially you need to be comfortable with your weightings.

What do you mean by tax obligations when you retire? Income is income and will be taxed no matter what age you are or what source. Presumably though without your salary your tax % will be significantly lower.

In relation to IP insurance, very different depending on occupation, extras, benefit period etc.

If cash flow is tight you could pay it from super, there are limits on the benefit period and features of income protection when paid from super though,

 

[MIW]

Hey everyone

Im about to go and see a financial advisor finally and to save me looking like a complet dodo wondering if someone can shed a bit of education my way. A bit of background info

1 x IP returning $300 per week hoping to have paid off before 65
1 x PPOR hoping to have paid off by 65
1 x Superfund with 60K currently 33 years old.

Now I salary sacrifice and add 200 per month extra into my super, my long term goal as I have a feeling my super balance at retirement will be dismall what issues will I have with my Investment property etc. My main reason for keeping the IP is to supplement my retirement income then when the time comes I can pass onto my children. All the super calculators etc predict a retirement figure of approx $450K but it shows for the first couple of years I use all of my own money then in the remaining years the government supplements in. I dont really want to rely on the government chipping in or should I rely on them and ditch my 200 extra im putting in a month and put it towards buying another Investment property? Im just unsure of what will happen when I retire and have an IP is their still tax obligations etc?

Also I currently have no income protection life insurance which im sure the financial planner will drill me to get. Just wondering what is an approximate cost per year for this kind of cover?

Very hard to advise so take that as general information only.
If you have family and dependants and loans needing your income so yes, establish LI in Super, and Income protection outside Super and take basic covers. If your are self-employed you can claim then Income Protection.
You are still young, so I would keep buying more IPs outside Super first. IMHO, 1 IP would not be enough and the PPOR would not produce income. Have IP as IO loan, if possible you could set up PPOR loan as IO BUT, BUT, BUT, calculate the additional payment you are currently making and save it as a deposit for the next IP! Also, this can be done with the extra $200 being currently diverted into your IP not into Super.
Only a financial planner and you can really see what your risk appetite is like, whether you have a strategy, etc...
You see it may be more appropriate to invest outside of Super currently as you can leverage more to buy more IPs. Your funds in Super are insufficient to buy an IP so that's the reason for it. Eventually, once Super grows to $150K at present times you could then buy via Super and IP with borrowing (but these rules may eventually change). Also, you cannot leverage in Super!
Yes in Super after you retire, at present laws, your earnings and capital gains are tax free, but that's a long way off to predict what laws will preside then, so look at current situation outside Super first, increase equity there, or your asset base with investments, then concentrate on Super down the track.
I hope that helps, but only you can really decide how to move forward and what your circumstances will dictate.
Congratulations on looking at your finances at this point in time and yes talk with a financial planner (just beware and do not take too many insurances or other products they suggest before checking them out!).
I went sometime ago to a financial planner, many years back and had a recommendation for insurances, which would cost me then around $15K pa in premiums (suggested I needed $5mill in LI, etc...). You see I realised I didn't require it as I had choices, many personal investments, PPOR paid off, could sell some, so I do not like how ALL suggest we need these insurances. There is a time and place we do need them when having young family and growing debts but once we have choices we may no longer need them that much!!!!