Q: I’m about 18 months off retiring. I currently have $700,000 in an SMSF (50% Australian shares with balance in cash). I have left it in cash for far too long and am now buying more shares. I’m thinking of selling a Sydney investment property, as costs associated with renting seem over the top (probably spend $10,000 on costs out of the $50,000 income plus there is loss of rent between tenants). After I’ve paid out the mortgage and CGT, I was planning on putting the remainder in my SMSF. Not sure then whether too much in shares and although my focus is playing safe with high dividend quality Australian stocks, I wonder if there's a danger of putting (nearly) all my eggs in one basket.
A: I don’t know whether you have been down this path already or not, however I think you might wish to consider seeing a financial adviser. You are contemplating some fairly key moves – and getting a structured plan around the strategy might be a really good investment.
Prima facie, your SMSF is going to be a pretty tax-effective vehicle to hold your investments. As soon as you turn 60, you can draw a pension tax free – and the investment earnings within the fund are going to be tax free.