Money Australia — May 2017

ROBSHAW

NAME:Michele Mossop

STATUS:Home owner who is planning for

the future.

QUESTIONS:DoIsellmyapartmentin

Sydney, unlock some capital, move out of Syd-

neyandbolstermysuper?OrdoIstaywhere

I am and take out a reverse mortgage?

ANSWERS:Don’tsellupwithoutrenting

andtestingoutthenewlocation.Subscribe

tothelocalnewspaperfor18months,talkto

alonglistofpeopleinthearea,includingreal

estate agents, police, medical services and

the chamber of commerce. A larger equity in

your home will result in a higher age pension.

Maximise your super contributions.

M

ichele Mossop, a photographer,

bought her two-bedroom apart-

ment in a beachside Sydney suburb

20 years ago when prices were low. Over that

time, the value has climbed as the area has

become sought after and old apartments like

hersareindemand.“IlovewhereIlive.Itis

beautiful and sunny and a great apartment,”

says Michele. She has renovated and the

street has a conservation order.

Butwithsuchstrongpropertyprices,

Michele is wondering if she should sell. She

hasadreamjobasafreelancephotographer.

But she is looking to the future and would like

to pump up the value of her superannuation.

Onewayistosellherapartmentandmove

somewhere with lower property prices.

“Icouldusehalfoftheequityfromthesaleof

my apartment to boost my super and draw

down an income when I retire.”

Oneoftheadvantagesofhavingnochildren

is that there is no need to leave an inheritance.

Shecanspendtheprincipalsuperamountas

well as the income it generates.

Michele has her eye on two beautiful coastal

spots: one six hours north of Sydney and the

SellingaSydneyapartmentcouldboostsuperandfundamovetoacheaperarea

Plan to unlock equity

CASE STUDY

ASK THE EXPERTS

other close to Adelaide. “I could have a garden,

acoupleofdogsandbeclosetothesea.”

But she would miss her friends. What would

bethecostofsellingherapartmentandrelo-

cating? Another strategy is taking a reverse

mortgage out on her apartment and staying

put. What are the advantages and disadvan-

tagesofthat?HowdoestheCentrelinkreverse

mortgagecomparewithothersonthemar-

ket? Are there options she hasn’t considered?

Micheleisabigfanofsuperandhasbeen

salary sacrificing extra contributions for many

yearsafteradvicefromthepayofficeatwork.

“I managed to make contributions without

losing cash in hand by shifting into a lower tax

bracket,” she says. But then disaster struck

when her savings were halved in the GFC in

2008. After nine years, her super has only just
      reached its pre-GFC level. “If I hadn’t lost it in
      theGFC,Iwouldn’thavetothink about selling
      my home,” says Michele.