DIY WILL KITS
Australia Post sells Will Kits and there are a lot of online DIY offerings available.
These are better than nothing (as long as they are filled out and signed properly) but really they only cater for very simple circumstances.
If you don’t currently have any will, then you may want to use a kit as a temporary solution.
This will give you time to consult a solicitor or public trustee (see left).
BEWARE OF THE SOLE PURPOSE TEST
Your fund must be maintained for the sole purpose of providing retirement benefits to members, (or to their dependants if a member dies before retirement).
If you contravene the sole purpose test, the fund may lose its concessional tax treatment, and the trustees could face civil and criminal penalties.
So you will need to make sure your property investment satisfies this purpose.
BEWARE OF THE ILLEGAL SCHEMES TO GET EARLY ACCESS
These usually involve transferring your balance from your existing super fund to a self-managed super fund (SMSF).
SMSF’s are of course totally legal but the promoters of the early access schemes will tell you that you can then access your super to pay off credit card debt, buy a house or car, even go on holiday.
Beware - these schemes are illegal, usually involve high fees and commissions, and may expose you to further fraud and identity theft.
SO WHEN IS YOUR PRESERVATION AGE?
For most of us it is either 55 or 60.
If you were born before 1 July 1960, your preservation age is 55.
If you were born after 1 July 1964, your preservation age is 60.
Between 1960 and 1964 the age steps up year by year (see the table below)
All the figures on this page are ‘in today’s dollars’ which means they’ve been adjusted for inflation.
And it makes a big difference: save $500 per month for 35 years at 5% p.a. and you’ll end up with $570,913. Hooray! Job done! …except that in 35 years inflation will erode the purchasing power of that money and it won’t buy you the lifestyle it would today.
That’s why these figures - and the calculators we link to - must and do adjust for inflation.
MONEY FOR NOTHING?
Some companies may offer you an income stream — not for part of the existing value of your home — but in return only for its capital appreciation.
This may sound very attractive. (Almost too good to be true?)
These agreements, called property options, are generally valued very conservatively though. The income you receive will probably be much lower than the capital appreciation of your home which you are giving up.
This is one to think about before 30 June. If you need to borrow to contribute $1,000 to invest in your superannuation, in order to receive the $500 Government co-contribution (and you’re confident you can pay the loan off quickly) it may be worth considering.