Noel Whittaker tells how best to use the money Ron has saved.
Ron is 76 and, due to some financial challenges, he has just started thinking about retirement. He asks Noel Whittaker how best to structure the assets he has in order to maximise his income.
I turned 76 in July and I’m thinking about retiring. However, it seems that because of my age, I am not allowed to put money into super, so I have to find some other way of getting a regular income to see out whatever life I may have left.
My wife died five years ago and investments since then – including in a taxi before Uber – have cost me dearly. Currently, I have a small management rights business, but feel it's time to relax a bit and do some more travelling.
I will probably have only about $550,000 to invest, and naturally want to find a way to safely maximise my income, including whatever Age Pension is available. I don't care if I buy a cheap house, unit or a caravan, or maybe rent somewhere. I’m just hoping to have enough coming in to see me out.
A. As you are now single, you are getting close to the cut-off point for the Age Pension. Certainly, if you buy a cheap unit you will be turning an assessable asset into a non-assessable asset and this should increase your pension enormously. To do the calculations, just go to my website and play with the Age Pension calculators. You will need to use the deeming calculator first to work out what notional income will be applied to your remaining financial assets. Don’t worry about superannuation – it’s mainly about saving tax, and in your situation, tax should not be an issue for you.
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Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature, and readers should seek their own professional advice before making any financial decisions.