I got $700,000 from downsizing my home. How should I invest it?

My 67 -year -old mother just shrunk. The difference between sales and purchasing price left it about $ 1 million. According to the rules, he plans to put $ 300,000 in his super.

This leaves him about $ 700,000. Keeping this money in the bank means that it no longer has a pension of $ 1100 in two weeks. Is it better to live in balance or should it deposit the money in another way?

Your question brings a few interesting elements to the agenda. The first is that the shrinkage is a negative result of damaging your pension rights, although typically perfect.

Income is super, bank or other investment, all of them are treated in the same way under assets and income tests. 1 million dollars, which your mother managed to release to reduce the shrinkage, was previously ignored because of the exemption from the vehicle test of the family house.

To increase your mother’s retirement, it is likely to use the $ 300,000 -lower spraying service. However, you also have a non -compatible contribution limit of $ 120,000 per year.

You can contribute three years in a year, a provision that exists exactly for such cases. So he could put $ 360,000 if he wanted. This will prevent it from contributing to the following two financial years, but in this case it is unlikely to be a problem.

The retirement of $ 660,000 will receive a minimum of 5 percent (according to the age) and earn $ 1269 income within two weeks covering its lost pension. There is also $ 340,000 to allocate.

When it comes to what to do with the remaining revenues, a period deposit, annual income or high interest account may be a possibility. The funds can then be added to Super within three years. Your mother can contribute to retirement until the age of 75, so there is plenty of time.

It can also create a non -Super -free investment portfolio, or can either withdraw a regular monthly income or allow it to put this fund pool aside for a subsequent life.