What to ask yourself before selling $70k in bank shares

Fiona is about to start a retirement pension through her super fund

Q I have $70,000 worth of CBA shares. Should I sell them and use that money to live on before I start the retirement pension from my superannuation account?

You have given me a seemingly simple question, Fiona, but it’s a little like an iceberg: I can see 10%, but 90% is hidden below the surface. It is often like this with money questions, and how much simpler can a question be than yours? I’d love to be able to just say yes or no, sell or don’t sell.

What I do know is that you must be getting close to retirement age. But here is a list of things I don’t know. It is worthwhile you looking at this list, because while I am not going to be able to give you a yes or no answer, your own answers may allow you to make a decision. Or if you talk to your super fund or an adviser, they will certainly want to know the answers.

So, here we go:

• How much do you have in super?

• What is the cost base on your CBA shares? In other words, what price did you pay for them? This determines your capital gains tax if you sell.

• What other assets do you have?

• How much income do you need in retirement?

• After looking at your assets and income, would you now or in the future qualify for the age pension?

• What is your tax position?

This is a great time to build your future financial plan. You can do this yourself or, as I mentioned, talk to your super fund, as it will have an advice service or a professional adviser.

So, while I can’t tell you to sell or not sell, on top of these questions I would be asking myself about my experience with the CBA. I imagine it has been a good investment and it pays a fully franked dividend of around 4%. To get the correct answer to your question, you need to go back to my list and start building your long-term financial plan.