Head of consumer advocacy at Resi Mortgage Corporation, Lisa Montgomery says your 50s should be the time when you begin to simplify your financial situation.
Paying off the mortgage can signifcantly reduce debts so that funds can be directed to maximising superannuation and investments
"You should ideally be looking to have paid down the majority of your mortgage during this time so you can save as much on interest as possible to invest elsewhere,'' says Lisa Montgomery
Investment properties can offer rewards during retirement but be prepared for the tax you pay if it is positively geared or the capital gains tax you pay when you sell it.
Montgomery outlines several new products on the market that allow people to borrow money to buy a property through their own DIY super fund where the rental income and capital gains can be potentially tax-free.
AMP financial planner Tony Rigby asks empty nesters and pre-retirees to consider if they really need a big four-bedroom house. Mr Rigby doesn't think that three empty bedrooms every night of the week collecting no rent makes good financial sense. He says that once the children move out, it's time to think about downsizing to a more manageable property that could also free up investable capital or pay off any residual mortgage.
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