$1 million to put my grandkids on property ladder
I am concerned my eight grandchildren now aged between 9 and 18 may not be able to buy a home and propose to leave $1m in my will to be invested for capital growth and income compounded in a managed fund to be selected by family executors, with each grandchild taking out his/ her eighth share on attaining age 25 years. Can you advise on this and the management funds that might suit?
I well appreciate your situation and have had many clients comment similarly in recent times. My first response to this is to make sure that you get good legal advice to ensure that your wishes are carried out after your death. This also means having an executor and trustees of any Testamentary Trust who understand what you seek to do. I’m unable to give any personal portfolio recommendation in this format, and would recommend you seek the advice of a professional financial planner. I can, however, suggest that you consider a well-diversified investment portfolio that offers sound, and steady, longterm growth. I would also be suggesting any earnings of the portfolio are compounded.
I earn $90,000 p.a. and my wife earns $40,000 p.a. before tax. I am 58 and my wife is 55 years old. We live in company-provided accommodation. We do not own a house or any investment property. Our savings are in superannuation in a Growth Fund. Our combined super balance is around $520,000. We plan to retire at age 65. Online
Retirement Calculator shows that with a modest 8 per cent return per annum, our combined superannuation should be
around $850,000.00 when we retire. We can then buy a property for $500,000 and use the rest of the super with the pension for our retirement. My wife is concerned that we do not have a house now. However, I feel ramping up the super is the best tax effective strategy. We do not have any debts and hold $25,000 in bitcoin and minimum savings of $5000 in a bank account.
A: One of the first questions I suggest you ask yourselves is “what sort of income do we need in retirement to be comfortable?” The answer can assist you to establish whether you want to spend a significant portion of your superannuation on a home, and rely on the Age Pension, with some income from your remaining superannuation portfolio. The house versus superannuation question is quite a common one, with no right or wrong answer. It depends on your individual situation. If you were to look at buying a home, you’ll need to get a significant deposit together first. A professional financial planner would be able to work through this issues you have raised, and offer appropriate advice. Brenton is a director and an authorised representative of Goldsborough Financial Services Limited. His advice should be considered as an opinion. Readers should consider engaging their own personal financial adviser. Questions and answers may have been edited for length.