Retirement Planning & Experiences

[love_the_life]

Don't forget to factor in that when superannuation goes to retirement phase (pension) there is a minimum % draw down which increases with age. Currently it ranges from 4% @ 65 to 14% @ 95.

 

[Pushka]

Don't forget to factor in that when superannuation goes to retirement phase (pension) there is a minimum % draw down which increases with age. Currently it ranges from 4% @ 65 to 14% @ 95.

Yes, that defined how much we converted to pension phase from the accumulation account. We didn't want to draw down too much when we are still receiving salary and SS and just wanted to receive what we did before starting pension. Which does have other benefits like reduction of Medicare levy etc.

 

[Pushka]

And this is why MrP at nearing a zero birthday does not want to retire.

Awarded last Thursday.

https://www.adelaide.edu.au/newsroo...mni-awards-recognise-outstanding-achievements

 

[Black Duck]

And this is why MrP at nearing a zero birthday does not want to retire.

Awarded last Thursday.

https://www.adelaide.edu.au/newsroo...mni-awards-recognise-outstanding-achievements

Congratulations to Mr P.

 

[RooFlyer]

And this is why MrP at nearing a zero birthday does not want to retire.

Awarded last Thursday.

https://www.adelaide.edu.au/newsroo...mni-awards-recognise-outstanding-achievements

Deserves a trip away, don’t you think?

Paris? Barbados?

 

[MARTINE]

And this is why MrP at nearing a zero birthday does not want to retire.

Awarded last Thursday.

https://www.adelaide.edu.au/newsroo...mni-awards-recognise-outstanding-achievements

Congratulations to MrP

 

[MonteCristo]

Today marks two months since I finished work.

Almost half way into a 10-week trip in Greece, and I have to say that nothing feels more natural.

This is the first time life is basically filled with things to look forward to. Previously there was only sporadic things that sparked some glimmer, while the prospect freedom was what really gave hope. Work was the dark void in between.

Have a trip to Cairns later this year; and a trip to Vietnam as well. In the process of booking a 10-week trip to Italy, Malta, Cyprus and Thailand for early-to-mid 2026... And waiting to book a trip to Turkey, Jordan, Egypt and Oman (if everything lines up logically, that is) for later next year.

My wife was asking me a couple of days ago about some of the volunteer stuff I do - to mark in her calendar when I'll be away for those. Between personal travel I barely have a free weekend before December.

Early retirement was a joint plan over a dozen years; both on the financial side, and the time side. It's still early days, but so far it's amazing. I'm young enough to do active things that younger me would want to do - just not quite as quickly as I might have 20 years ago. But I feel fitter and healthier already than I have for years. Just before this trip, I finished 2nd in my age in a Parkrun - a few months ago I could barely jog 2km without keeling over.

I have a window to do things before I properly slow down, and live life without regrets.

To anyone umming and ahhing over it, I'd just ask you to think what you'd have preferred to do with your life when you're 80 and looking back at what you did, and maybe what you could have done instead.

 

[cove]

We are now less than 3 months to go to retirement. Have multiple trips booked so should be fun.
Have to get a younger GP as ours is retiring in October.

 

[drcam]

I'm still a fair way off retirement, but I may be in the medium term running into the following situation:

50 years old, with my main residence (MEL) paid off and an investment property in Ballarat (rented, paid off). I need to relocate to Sydney to be closer to my elderly parents who are in their 80s. I will have about 650k in super. Should I sell either my primary residence or the investment property in Victoria, keep both and buy a place in Sydney, or just rent in Sydney? I plan to retire in my early to mid 60s. What is my best strategy tax-wise?

 

[cove]

Currently your residence should be tax free provided it has never been rented out. Next your investment property would currently be subject to a 50% discount on Capital Gains Tax. That discount may change as there is a tax review in August.
If you buy in Sydney the prices are like telephone numbers but somehow folks are still buying.

 

[drcam]

Also note that I will probably not stay in Sydney forever unless I find Miss Right in Sydney although my parents will never move to Melbourne. Moving back home in middle age is also not an option. So should I just rent? Sydney property is impossibly expensive.

My retirement plans consist of a lot of travel...... should I rent my residence out for the 3-6 months I am away at a time?

 

[cove]

Wow @drcam you are out there now!
Based on what you said renting would be a good idea in Sydney.
Do talk to a tax accountant about renting out your Melbourne residence.

 

[mrsterryn]

Also note that I will probably not stay in Sydney forever unless I find Miss Right in Sydney although my parents will never move to Melbourne. Moving back home in middle age is also not an option. So should I just rent? Sydney property is impossibly expensive.

My retirement plans consist of a lot of travel...... should I rent my residence out for the 3-6 months I am away at a time?

Wouldn't that mean both properties would have limited deductions being paid off and then little taxable deductions and large tax bill ?

 

[drcam]

@cove oh no!

Post automatically merged: Yesterday at 5:09 PM

Wouldn't that mean both properties would have limited deductions being paid off and then little taxable deductions and large tax bill ?

Sadly, yes. So would it be possible to "re-mortgage" my MEL residence and turn it into an investment property for tax purposes?

 

[CaptJCool]

@cove oh no!

Post automatically merged: Yesterday at 5:09 PM

Sadly, yes. So would it be possible to "re-mortgage" my MEL residence and turn it into an investment property for tax purposes?

There’s a 6 year rule on CGT exemption on principal main residence

Treating former home as main residence | Australian Taxation Office

How the CGT main residence exemption works if you move out and use the 6-year rule when renting out your former home.

www.ato.gov.au

 

[33kft]

Sadly, yes. So would it be possible to "re-mortgage" my MEL residence and turn it into an investment property for tax purposes?

You really need a tax accountant to answer that in a way that will hold up to ATO scruitiny - it depends on what the borrowed funds are used for, this is not much different to people who reborrow against mortgages on investment properties and the ATO has very strict rules around that and what proportion of that interest can be claimed as a deduction.

The ATO really like to look carefully at the tax returns of people in this sort of situation.

 

[CaptJCool]

You really need an accountant to answer that in a way that will hold up to ATO scruitiny - it depends on what the borrowed funds are used for, this is not much different to people who reborrow against mortgages on investment properties and the ATO has very strict rules around that and what proportion of that interest can be claimed as a deduction

The whole re-borrowing against the main residence is most likely non-deductible for tax purposes because once the original loan is paid off, it’s hard to argue it’s done for anything but private purposes

 

[33kft]

The whole re-borrowing against the main residence is most likely non-deductible for tax purposes because once the original loan is paid off, it’s hard to argue it’s done for anything but private purposes

It isn't that simple - it could for example be used to improve or repair the residence in order to make it fit for rental, there's some ATO provision about the funds needing to be used for "income producing purposes" and who knows what that might or might not entail other than a well paid accountant who finds that sort of thing exciting....

 

[CaptJCool]

It isn't that simple - it could for example be used to improve or repair the residence in order to make it fit for rental, there's some ATO provision about the funds needing to be used for "income producing purposes" and who knows what that might or might not entail other than a well paid accountant who finds that sort of thing exciting....

Well that’s cause the borrowing (and the spend) is before income is produced so this has hallmarks of “capital expenses” rather than “on-going deductions.

The definitive guide on spending is here

Repair and maintenance expenses | Australian Taxation Office

Find out how and when to claim your repair and maintenance expenses.

www.ato.gov.au

 

[33kft]

Well that’s cause the borrowing (and the spend) is before income is produced so this has hallmarks of “capital expenses” rather than “on-going deductions.

The definitive guide on spending is here

Repair and maintenance expenses | Australian Taxation Office

Find out how and when to claim your repair and maintenance expenses.

www.ato.gov.au

You've linked to ATO's guidance on standard rental deductions which is not what I am talking about and not relevant here, as those deductions would be available to @drcam regardless, who was instead asking if they could reborrow against the property and then claim that interest as a deduction. Reborrowing against property which is rented out is called debt recycling and the test applied for what if any proportion of that loan's interest can then be claimed is how that money is used:

ATO Community

The problem is that "produce assessible income" is sufficiently vague. Improvements to the property might produce assessible income, so might borrowing for another rental property (but what's the point, you'd just take a loan out on that property and claim it against that property's rental income, surely?) and so would buying shares which pay a dividend I guess - I don't know, I'm not a tax accountant clearly. I return to my earlier point that I would be asking a tax accountant what could or could not be allowed here.