Ask Noel

The Age – Money

Successful property investments can offer capital growth, ongoing rental return and tax benefits.

Q: I have two super accounts. One is an accumulation fund with $160,000 and the other is a transition-to-retirement pension with $210,000. I also have $30,000 in savings in a bank account. Now that I’ve retired and turn 65 in few months’ time, how can I maximise my capacity to obtain the full aged pension, taking into account the asset and income tests applied by Centrelink?

A. The point at which the full aged pension starts to taper is $265,000 for a home-owner couple and $186,750 for a home-owner single. Therefore, you are unlikely to receive the full pension unless you run down your assets on expenditure such as travel or renovating your home. Take comfort in the knowledge that the extra assets you have give you a better standard of living than if you received the full pension. Also, most of the benefits available to a full pensioner are available to a part pensioner.

Q. I owe $89,000 on my unit, which is valued at $210,000. I’m also looking at investing in property. My mortgage broker tells me I can borrow up to $220,000 for the investment property but I don’t understand how he came to this amount. I’ve used online calculators to determine my borrowing capacity and made inquiries via other banks and they have given me a lesser figure.

A. You are the person who should decide how much you want to borrow, not the mortgage broker’s computer. Do a personal budget and factor in contingencies such as vacancies, repairs and interest-rate rises. You will then know how much you can afford to repay and not be out of your depth.