How to get ahead as you move towards retirement


How to get ahead as you move towards retirement

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We migrated to Australia in 1995 with less than $1000 and have built up what we have since then. I am aged 55, my husband is 54 and we have two dependent children. We have combined salaries of $220,000 a year and $450,000 in superannuation. We pay $700 a week into a $70,000 mortgage on a home valued at $900,000. We live on about $10,000 a month. We have little financial expertise, coming from a culture where money is tight and people live week by week. We would like to live in Sydney’s inner west and be able to provide for our children and family overseas. I feel like we are treading water. How can we get ahead? E.M.

You have done well but there is more to do to achieve two goals that I often set people before they retire: To have a fully paid-off home in which you want to live and enough money to live on.

The more often you trade shares, the more likely you are to lose money.

The more often you trade shares, the more likely you are to lose money.Credit:Michele Mossop

Your mortgage will be paid off in about two years but, if you want to move elsewhere, do your sums and see if you can fully repay your proposed new mortgage in, say, 10 years.

At the same time, you will need to significantly increase – maybe triple – your super to generate enough income to maintain anything like your current expenses after you retire.


I live on my own and do not have a family. The COVID-19 lockdown increased my focus on share trading, as it offered an important interest. Not sure how much money I have made but some. I am a self-funded retiree and, like many others, the value of my holdings has fallen with the crisis. I have usually used my own super fund for trading and, while my current transactions have increased, I am by no means a day trader. What is the rule? What is too many? As I understand it, if I use my personal account and sell within 12 months I pay half of any profits in tax. R.F.

It is a bit of grey area. As long as your super fund trust deed and your investment strategy allow it, you can invest in shares.

What the law requires you to do is to invest with a sole intention of providing a retirement benefit for the fund’s beneficiary – you. Accordingly, if you buy and sell shares with the intention of making a profit, and do so, then you would win that argument.

However, if you buy and sell multiple times and lose money – as many people do – you are not exactly providing for your retirement.

As a rule of thumb, the more often you trade shares, the more likely you are to lose money.

Any profits made within 12 months of purchase are fully taxable, whether in your name or in the super fund (although with different tax rates) and a loss is an income loss.

If sold after 12 months, half the profit is added to that entity’s taxable income but a loss is a capital loss, only usable to offset a capital gain.

If you have a question for George Cochrane, send it to Personal Investment, PO Box 3001, Tamarama, NSW, 2026. Help lines: Australian Financial Complaints Authority, 1800 931 678; Centrelink pensions 13 23 00.

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