Ask Paul: We're stood down, should we access super to buy property?


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My husband and I are nearly 50 and were recently stood down from our jobs.

We have income from two rental properties ($3200 a month) and have $200,000 in savings.

My super is about $100,000 and my husband's is about $50,000.

paul clitheroe

Should we withdraw $20,000 each from super from the early release scheme this time around? And then should we buy another house for rental income? - Quyen

I am very sorry to hear that you and your husband have been stood down, Quyen. I hope that this situation resolves itself as the economy starts to recover.

That it will recover is, in my opinion, quite certain. But the timing is very uncertain. Based on all the uncertainty around us, I feel economic growth will take longer than we all hope.

What does cheer me up, though, is that you don't have to take money out of super to survive. If so, that would be fair enough, but you are looking to use the money to buy another property, so the debate we need to have is property versus super.

Here I am going to argue firmly that you should leave your money in super. This is for a few reasons.

First, I suspect that as well as your two rental properties you own a home, so you have most of your wealth tied up in property. Second, super gives you exposure to a great mix of assets, all over the planet.

Finally, just look at super returns over the decades. A typical balanced fund has returned over 8%pa. And these returns are generated in a very low-tax environment

It is your money, so your choice. But I feel that super spreads your risk away from property. Property may well outperform super or super may outperform property.

That, however, is not the point.

I have no problem with quality property in a growth location as a long-term investment, but diversification is a key investment concept and I really would prefer you to spread your risk.


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Paul Clitheroe AM is founder and editorial adviser of Money magazine. He is one of Australia's leading financial voices, responsible for bringing financial insight to Australians through personal finance books, the Money TV show, and this publication, which he established in 1999. Paul is the chair of the Australian Government Financial Literacy Board and is chairman of InvestSMART Financial Services. He is the chair of Financial Literacy at Macquarie University where he is also a Professor with the School of Business and Economics. Ask Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section. View our disclaimer.
Robert Kisiel
August 6, 2020 2.48pm

I would differ that advice..My father died with 70k in super..At 50 you are not a young chick any more.. Super has a good life insurance but gives you no income stream... Useless at old age...My tip calculate how much to leave in super that the fees don't eat it up..I have $30k that is enough to balance the income super produces with fees..Buy another rental that will give you extra income and capital gain and get out of Australia and live/rent in a tropical place from the income ..I live on 1500 a month in Vietnam...Look outside the square. You are in the top 5% of the richest people on the planet .. Enjoy the rest of your Life...

Steve Riley
September 5, 2020 11.55am

I agree Bob 100% on getting out of the expensive country as I call it now and relocate overseas, put your feet up and live for peanuts compared to the so called Lucky country that I would think not. True look outside the square and kick your feet up and enjoy life EARLY!!!