Good morning daily

[Shirley]

Our land rates in NSW are calculated on the unimproved capital value of the land.

[jon_d]

At least I'll get a pension concession on those, but the other plus is tying some of Margaret's Super Fund money back into real estate and in this case, a home that isn't assessed when it comes to a pension.

It's all a great big balancing act.

Draw down on the super to build a bigger house, super is reduced, less income, get pension but rates and insurance go high over the years. Causing more money to be spent.
Possibly to the point of unsustainable ownership.... bearing in mind other costs are increasing too.

A full cash flow spreadsheet needs to be be done right up to the expected end of life.

If super is increasing to the determent of a pension, I believe this is a good thing.

When in super "pension mode"; all interest is tax free in that account.

super.jpg

[BruceS]

I've never had any super.
It's just Labor's way of avoiding using Gov capital to pay pensions.
It's also aimed at super companies to 'buy' into companies to employ union workers.

[T1 Terry]

We would really need a lot invested to pay $500 plus a week, I would lose my part pension as well if we don't tie the cash at bank into real estate.

It's those unstable parts shown in your graph between march and may that I sense is about to hit for a lot more than a few mths ... maybe even yrs.

Superfunds lost so much money in the bad times with supposed experts in financial investment, this is an average, no commercial superfund has a better loss record than this average

Superfund averages.jpg

yet, once we converted to our own self managed superfund, we have never lost money.
Real estate may not fully avoid a few steps backwards, but when it also the roof over your head, it doesn't hurt as bad .... I'd hate to be looking into what I think is coming with a mortgage over my head or renting the roof over my head .....

T1 Terry

[Dot]

Financial advisor that knows the stock market.

[jon_d]

We would really need a lot invested to pay $500 plus a week, I would lose my part pension as well if we don't tie the cash at bank into real estate.

If you spend your all your disposable assets to build a house to live in. Then the house and the so called assett conversion isn't part of the asset test. But the trouble is, you have no money to spend afterwards.

Ie become Purely dependant on the pension and any increases the govt might give.

If the house you build is to big, the rates and insurance may exceed what you can afford on the pension.


However, if you build a smaller place, the build and annual costs will be less giving you most freedom and control.... before becoming fully pension dependent.


Which is about $3600 a month for a couple.
Building insurance on a $1000,000 place is about $5000 and growing each year. Throw in contents, rates, car rego, winnie rego, winnie insurance, 2k per litre winnie tax, food, heath costs etc. The pension cash soons run out.

The build future budget and cash flow needs to be planned carefully.

Don't build something that you can't afford to live in afterwards.... that's all I'm trying to say.

The big build - like Victoria is doing, can bite you in the arse.


Re the chart. 7% compounding is about doubes the balance every 10 years. The last couple of years have boomed for super. Even cash is going ok allowing people to take a safer risk if they want.

When in pension mode, you must withdraw a fixed % per year. Each year it increases. Starts at about 4%.

You can't have all your super in a fixed single assert like real estate and be in pension mode unless you can extract that 4% in cash.

Remember, earnings in pension mode is tax free.

If you have your super tied up in real estate, it will only grow from rent and asset increases. The assett increase is the thing you've been noticing when house shopping. It can't be both ways.