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Richard B.
Richard B.
Hawthorne, QLD
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Q:

My family is about to receive a bequeathment of approx $200K in fully franked shares.
Our house is would be approx valued at 1.1m on the open market and our outsatnding mortgage is $440k.
My personal super is only $50 plus thousand and my wifes approximately $100k
I am 60 years old my wife 55
We plan to firstly cash in shares to repay immediate debt of approx $25k.
Is my (our super) worth topping up at the max $35k each?
Should we keep any shares as is or cash in total to reinvest?

2 weeks ago

Responses

Hi Richard,

This can go may different ways, you should sit down with someone who can talk you through the pros and cons of each way.

There's the options you mention:
1. Keeping the shares
2. Selling to cash (you'll need to watch the tax implications of this as you could be stuck with tax on any gains earned by the previous owner of the shares)
3. Topping up super (the annual cap for the type of contribution you'd likely be making is actually $100,000 each. The $35,000 you mention was last financial years tax deductible contribution limit - this is now only $25,000).

There's also another strategy you could explore which involves cashing in and living off the shares for as long as that would support you and directing as much of your pre-tax salary to super for the next couple of years. This would save you lots in tax whilst building your super for retirement.

The other thing that stands out to me is your mortgage. Best if you had some type of plan around paying that off prior to retirement - the inheritance would wipe out almost half of what you owe, saving you lots of interest.

What's best for you would take some exploring & may not be easy to answer via an online forum such as this.

Regards
James

Senior Adviser
First Financial 03 9909 5800

Hi Richard,

I’m not an adviser! My preference would be to reduce your mortgage now as that interest is a dead weight on your finances.
Then because you will need to pay $1600 less per month on your mortgage I would top up your super by the pre-tax amount equal to that.
Give James a call or speak to another financial planner to ensure you do the right thing for your long term goals.

Best of Luck,
Scott

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