Ask Paul: My wife doesn't have any super, should I give her some of mine?

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My wife and I are retired, in our 60s. Our super is in a leading industry fund, but in my name only. I have asked for this to be placed in both my name and my wife's, and was told that this wasn't possible.

We recently sold an investment property that was in my name only and have a substantial amount to invest.

My wife hasn't any super but has $200,000 in the bank, which is not getting much interest.

ask paul clitheroe my wife doesnt have any super should i withdraw some of mine to start an account in her name

I could place property money in my super account, but my wife is hesitant with this as it isn't in her name.

We could put it in the bank, but it would get little return at present.

Am I better withdrawing my super and putting it into another super account in both names, and something else? What are my options? - Chris

Very good question, Chris.

Even in the longest of relationships, it makes a lot of sense for both people to have access to funds and for money to be held across both names. There are a lot of complex issues here, such as "what happens to me if you die or become incapacitated?"

The reality is that I cannot give you anything more than general information. I'd need a couple of hours with you to understand your goals and objectives, tax position, exact ages and so on before anything definite can be said.

But let me have a crack at relevant information for you both.

The solution depends on your attitudes and tax position. But you could easily invest in your wife's name in a managed fund or exchange traded fund outside super that holds the same assets as any good super fund. That would give you both a similar portfolio of assets - yours in super, your wife's outside super.

Please do call your fund to discuss this, but if your wife is under 67, she can, with limits, invest in super in her name.

Also, in the May 2021 federal budget, the government announced it would repeal the super rules that required people aged 67 and 75 to meet the work test if they wished to make super contributions. This is not yet law.

I really do not see the logic in you withdrawing from your super to invest in both names.

If your wife is under 67, I would think using your cash from the sale of the property to open a super account for her should be looked at.

Also, ask your fund about the potential changes to the law and when this may pass, to allow people to put money in super up to age 75 without a requirement to work.

Finally, as I mentioned, investing in a fund outside super, but with a similar mix of assets in your wife's name, could be a viable option. You are talking about big decisions here and a lot of money.

So talk to your fund - it is likely to be able to refer you to an adviser who would, I believe, be 
most valuable.

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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. Click here to ask Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section. Please view our disclaimer here.
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April 26, 2022 12.59pm

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