Less work, more fun

QMy wife and I are both about to turn 60 and our mortgage is around $60,000. We are both working full time but would like to slowly wind back our working hours/days. I have a good super plan and will be able to retire comfortably when the time comes. Our combined wage is around $150,000. I have about $60,000 in shares in BHP, CBA, CSL, Wesfarmers, etc.

Should I sell all of my shares and pay off our mortgage and enjoy a little financial freedom while still contributing to our super funds?

Mark, I’m loving the idea of a bit of financial freedom for you both. My problem is your mortgage is probably costing you around 2.5% to 3%, and even with dividends under pressure I reckon your shares are paying you more than that. Over time, your shares should also grow in value.

Taking into account the dividends, I suspect you could be worse off selling the shares and paying down your mortgage. I appreciate, too, many of us work most of our lives, then die too rich. But I am not sure that converting quality shares into no mortgage will provide more “financial freedom”. If it is a sleep-at-night sort of thing, then I’d do it.

But it seems to me that keeping quality assets is a darn good idea. My view is to do a complete “funding your lifestyle” plan. My suspicion is that paying off the small mortgage is a pretty low priority. Topping up super from your salary could be very tax effective and then a plan to draw down from super to improve lifestyle could also be an option.

There are many moving parts here. Seeing a good professional, fee-charging adviser may well be money well spent, or at least have a chat to your super fund.

I am about five years older than you, as is my wife Vicki, and we really get the importance of sleeping at night and using our assets before we drop dead!