I retired in 2014 at age 60 and rolled over my superannuation into an allocated pension, drawing down $40,000 a year. My pension account is now at $443,000 – I’ve lost $40,000 since January. I own 40 per cent of my home as tenant-in-common with my partner, who is 76 and has $200,000 in his super pension from him, paying $25,000 annually. Our house is valued at $1.8 million and we each receive a Centrelink part-age pension of $223 per fortnight. My mother recently passed away, leaving me $587,000. I am thinking of putting $200,000 into my allocated pension, and buying another 10 per cent share of the house, so that my partner has additional funds. I’d use the remainder for long-overdue renovations on our home and the rest on travel. Is this the best strategy? vs.
It seems a well-thought-out use of your inheritance. However, you are probably aware that you will likely lose the age pension, as the upper assets threshold for a homeowning couple is $915,500.
What should you keep in mind when planning to spend a sizeable inheritance?Credit:Michael Kempf
If your assets later diminish, and you reclaim a part-age pension, your allocated pensions would be classified as “post-2015” and subject to deeming.
Looking down the track, you also need to consider what would you do if one of you succumbs to illness and needs to move into an aged-care facility. The lump sum refundable accommodation deposit – required on entry – varies, but $500,000 could be seen as an average figure.
Each of you would probably be able to only put down part of this, from which the interest on the unpaid portion can be withdrawn.
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So, I would prefer that you use the new ability (since July 1) for people over the age of 67 to contribute as much as $330,000 as a three-year forward non-concessional contribution into super. You cannot add it to a super pension fund, so simply open another account.
And, yes, renovations that keep your house in good nick, and a long holiday, are both wise and reduce the assets test count.
My elderly mother-in-law inherited shares in a Malaysian company in the 1960s and they are now worth about $50,000. She wishes to sell them – a process we have found to be frustrating. Her financial advisor to her has asked the Malaysian broker who holds the shares a number of times. Recently, the broker advised of the requirements to be met, many of which were irrelevant and assume she is living in Malaysia. My mother-in-law is a UK citizen and a permanent resident of Australia. One form she asks for details of a Malaysian bank account, which she does not have, although she has an ANZ account into which the dividends have been deposited for years. We asked the Malaysian embassy in Canberra for some guidance. They were polite but essentially could not assist us. Can you point us towards a successful sale of the shares? FM