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Ask Noel

I'm in my early 60s and my wife is 3½ years younger than me. When I turn 65 (fully retired), I could be entitled to a Centrelink part aged pension. If my wife's super is still in accumulation stage, will her super be excluded from determining my pension eligibility? Is there an argument for boosting her super before I turn 65, possibly using strategies such as splitting my super by transferring contributions to her account? Should we meet more of our regular expenses from my income and less from my wife's to enable her to put more money into her super? What is the position in determining my aged pension eligibility if my wife has, by then, moved from accumulation to an allocated pension when she's 62 and I'm 65?

The money your wife has in accumulation inside super will not be assessed by Centrelink until she reaches pensionable age. For women born between July 1, 1947, and December 31, 1948, this is 64½ and for women born between January 1, 1949, and June 30, 1952, it is 65. Once an income stream is started, Centrelink will assess the asset irrespective of the member's age. Minimise your assets while boosting her super.

I'm 58, in full-time employment and have a portion of my super classified as unrestricted, non-preserved funds. I've sought advice from a variety of sources as to whether I can access these funds at this point in time but have received conflicting responses about whether I need to be fully retired or not. I'd appreciate your advice as to whether I can access these funds while still in full-time employment.

You can withdraw unrestricted non-preserved funds at any time but you should think carefully before removing funds from this low-tax environment, as there are now caps on the amounts that can be contributed to super. Also, depending on any previous withdrawals you've made, there may be tax on any withdrawals.

I'm 30, earn $75,000 a year between two jobs, and am paying off a unit that costs me about $400 a week including rates, mortgage, etc. If I rent it out for $220 and rent another unit myself for about the same amount, I figure I will be in the same position financially, except I will have tax deductions each year worth at least $250 a week (interest on loan and real-estate fees, insurance). It seems like this is a bonus. At the end of each financial year surely I will end up with less tax and, hence, get a refund big enough for an overseas holiday each year? I've already spent $15,000 this financial year on renovations. If I start now, could they also be a deduction as they were preparing the unit for rental? I know that long term I should be paying the loan off as quickly as possible, but I want to travel for a few years and have money for a change.

Provided you don't suffer tenant damage, or long vacancies, I see nothing wrong with your proposed strategy. Don't forget you can be absent from the property for up to six years without losing the main residence capital gains tax exemption. To maintain maximum flexibility, accumulate all your spare funds in a separate offset account. Parts of your renovations may be tax deductible if they are repairs, whereas overall improvements to the property would not be, so make sure you liaise closely with your accountant.


Why don't savers get any attention from the media? When interest rates go down, savers get less interest, feel poorer and spend less. Perhaps if the interest rates went up, savers would earn more interest, feel richer, spend more and stimulate the economy. Does the Reserve Bank or the government care about savers, or should we all give up saving cash and invest in shares and property?

The media thrives on bad news and there are more headlines in rising interest rates and mortgage foreclosures than there are in rising interest rates and wealthier investors. By all means spread your investments but make sure you keep an appropriate proportion of your money in cash so you have liquidity when you need it.

My wife and I are 33 and 30 respectively. We purchased an apartment in Coogee six years ago for $465,000. We've renovated it and reduced our mortgage to $290,000. A recent valuation indicated it's worth $700,000. We're now looking to buy a second property but want to hold on to our first property because we could generate rent of up to $800 a week. Are we fooling ourselves taking out an $800,000 mortgage for our second purchase? It's a little daunting to have a mortgage of more than a million dollars.

There's an old saying "bite off more than you can chew and chew like hell", so if your incomes are secure and you don't intend to stop work to have a family, it's not impossible to make the stretch to buy the additional property. If the Coogee property returns $30,000 net and your interest bill is $21,000, you will have a positive cash flow, but you will be paying tax on the difference. You need an accountant and a financial adviser to crunch the numbers for you. If you go ahead, make sure the current loan is interest only to maximise funds to pay off the new mortgage as quickly as possible.

Advice is general; readers should seek their own professional advice.

Contact Follow him on Twitter: @noelwhittaker. Questions to: Ask Noel, Money, GPO Box 2571, Qld, 4000, or see /ask-an-expert.