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A word from Elise Hamill - One of our fantastic sponsors

Investing once you are debt free

We have noticed a trend in clients approaching us for advice once their mortgage is close to being paid off.

After having regular withdrawals for the past 20-25 years, clients are often at a loss as to what to do with the reduction in fixed expenses.

Without a plan, often the normal everyday expenses creep up and this surplus is not being utilised as efficiently as it could be. It’s important to ensure your long term retirement needs are met beyond having a debt free home.

Some options for your money when you get to this stage in life:

  • Boosting your super fund. This is essentially what will fund your living expenses in retirement.

    There are two types of contributions:

    1 – Concessional contributions, which are tax deductible. The annual contribution limit is $25k and you must take your employer contributions into account when determining how much you can contribute of the $25k limit (each year).

    2 – Non-Concessional contributions, which are after tax contributions as they are not deductible. The annual contribution limit is $100k with an ability to contribute $300k in one year under the ‘bring forward’ rule.

    When clients receive an inheritance or downsize their home, they usually make contributions under this type of contribution.

  • Investments outside of super
    This may be setting up a portfolio of shares or managed funds which you contribute into regularly. This could also be an investment property, depending on surplus monies you have and ongoing savings capacity.

  • Helping to set up your children
    This could be achieved by putting aside money for their education, their first car or even helping them into the property market. Depending on your goals and objectives, the options to achieving this will vary.

Without denying the fact you have worked hard your whole life to become debt free and likely want to celebrate by splurging the surplus money, it is important to keep focused on the long term. Generally the most wealth clients have is in their family home. We often find that many clients are reluctant to downsize once they are debt free and it’s important to ensure you build wealth outside of the family home to help fund those retirement years. You always need a house to live in, so even by selling the family home, it’s likely you will need to buy another one. With current Shire prices, there isn’t generally much leftover in the downsizing exercise!

If this resonates with you, we would only be too happy to sit down and have a conversation with you. Determining your goals and objectives is the first step, implementing and ensuring you stay on track is the next. We can help you.

Kind Regards,

Elise Hamill

Financial Adviser CFP®
mail │
Address│Level 13, 23 Hunter Street Sydney
Phone│02 9223 0911 Fax│02 9223 0922 Web│

Please note this information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, we recommend you consider, with or without the assistance of a financial advisor, whether the information is appropriate in light of your particular needs and circumstances.

Copyright in the information contained in this article subsists under the Copyright Act 1968 (Cth) and, through international treaties, the laws of many other countries. It is owned by EFDB Pty Ltd unless otherwise stated. All rights reserved. You may download a single copy of this document and, where necessary for its use as a reference, make a single hard copy. Except as permitted under the Copyright Act 1968 (Cth) or other applicable laws, no part of this publication may be otherwise reproduced, adapted, performed in public or transmitted in any form by any process without the specific written consent of EFDB Pty Ltd.

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