Retirement Planning & Experiences

[Happy Dude]

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's called debt recycling I think. I'm not convinced it is as simple as splitting a main residence mortgage for investment purposes (beefed up with equity). There's heaps of spruiking on social media about how easy it is.

edit: I see @33kft has also mentioned debt recycling.

 

[MonteCristo]

We debt recycled our PPoR home loan (in our case, when we fully offset the loan, and was no longer charged interest - in order to purchase some shares). Word at the time was if you can demonstrate that you paid off the initial loan, you can convert that line of credit into an investment loan.

Obviously, previous establishment costs can't be deducted. But ongoing costs of the loan (annual fee, interest) can be claimed as an investment expense. And obviously only at a proportional basis (eg: can only claim ... 50% of the annual fee if you start the investment loan period from 1 January... Only 40% of the interest if 40% of the outstanding loan was for investment purposes, etc).

Not financial advice! This was from an accountant some 5 years ago.

 

[cove]

My tax knowledge stopped updating mostly in 1983 as I left professional accounting. 42 years later I am close to finishing my life as a wholesaler and manufacturer. We will still be involved in social housing and investing.

 

[Freq Flier 2013]

My tax knowledge stopped updating mostly in 1983 as I left professional accounting. 42 years later I am close to finishing my life as a wholesaler and manufacturer. We will still be involved in social housing and investing.

But having an accounting qualification is a great help in running any business!

 

[cove]

Yes @Freq Flier 2013 it was a great help. I still pay attention to taxation matters in Australia. We still use E Super with our superfund and we were both glad we dumped AMP. While owning our business was fun it was also quite challenging. We did end up owning all the premises that we operated from.There is lots of red tape with BAS, Super contributions, payroll tax varying in each state,statistics reports,waste handling reports and a lot more.

 

[hydrabyss]

Apologies for dragging up an old thread but have found it interesting to read as I am currently at a cross roads on which way to go.
I have the option to keep working for average income or stop work and receive a pension that is not means tested but limited to what can be done to earn extra income if I take it.
Problem is at 53 I like to keep busy so may find it hard letting go although I did leave fulltime employment working for someone else 10 years ago so am used to being self motivated.
For those that retired early how did you find it and has anyone gone back to work after a few years even if part time.
From a financial point I am lucky I never invested much into super so I can access what I have today its just working out how much you will need each year. I have used chatgpt to work out what income would be possible while still allowing the assets to increase in value and as I am only 53 I will still being paying tax. They say a comfortable retirement can be had on 80k a year but my concern is when your not working theres more time to spend money.

 

[kookaburra75]

Apologies for dragging up an old thread but have found it interesting to read as I am currently at a cross roads on which way to go.
I have the option to keep working for average income or stop work and receive a pension that is not means tested but limited to what can be done to earn extra income if I take it.
Problem is at 53 I like to keep busy so may find it hard letting go although I did leave fulltime employment working for someone else 10 years ago so am used to being self motivated.
For those that retired early how did you find it and has anyone gone back to work after a few years even if part time.
From a financial point I am lucky I never invested much into super so I can access what I have today its just working out how much you will need each year. I have used chatgpt to work out what income would be possible while still allowing the assets to increase in value and as I am only 53 I will still being paying tax. They say a comfortable retirement can be had on 80k a year but my concern is when your not working theres more time to spend money.

I'm in my mid 60s and moving to retirement now, and went through the same types of questions etc 10 years ago. And the usual disclaimer, I'm not in the financial game, get your own advice etc.

The best advice I can give though, is find a good financial advisor who understands all of the rules around income and capital gains tax, accessing super for retirement etc, and how much a year you need - do you know now how much you're spending now, broken into the different categories? For example, as you get older, medcial bills can be bigger.

It sounds like you might have a government type scheme behind you and there are a lot of rules, obvious and hidden, around them. Ask around for recommendations for an advisor, meet them and check them out to see how knowledgeable they are around the rules of your particular scheme, what options they can provide, preferably not locked to a single product or brand. If you decide to proceed with them and get the full advice, it will probably cost you $5,000-10,000, but it's worth it.