Invest in shares to maintain nest egg

QI am 34 years old and recently received an opportunity: a five-year contract to move overseas for work (for the same company). My wife will move with me and may not work. We have no children, but it’s in the plan to start a family.

I will be receiving my salary in an overseas currency and this means there will be no more super contributions.

We own an investment property valued at $650,000 (with a mortgage, and rent is servicing the loan, which is to be paid off in another 25 years). Our family home is worth $690,000 ($500,000 mortgage). We plan to rent it out, but it will only cover 70% of the mortgage.

Our super is $80,000 combined. In my new job we will be able to save a couple of thousand dollars each month. Our biggest concern is not having super. Should we seek other long-term investments? Is there anything we should be aware of before moving?

Andrew, this is a great opportunity. Frankly, I am not overly fussed about your wealth creation during the time you are gone. You already own two properties and the rent will cover most of the costs there. Depending on where you are going, you may be in a lower-taxed environment.

But here I am no expert. The company you work for is likely to offer assistance, but the whole issue of becoming a non-resident for tax purposes is really important to look at before you go. If your company cannot assist, this is the time when an expert accountant’s fees will be worthwhile.

I imagine when you are overseas you will earn at least what you earn now. So my super replacement plan would be to save around 20% of what you earn and invest it in shares. An easy way of doing this is to invest with a major indexed fund provider such as Vanguard or BlackRock. They have low costs and you can make monthly contributions. When you get back you could keep those, and it is quite likely you could add the amount to your super fund as a non-deductible contribution. The main thing is to save a replacement amount to compensate for the lack of super.

I know your experience will benefit your career and your long-term earning potential.