We have low super but four properties. How should we plan for retirement?

My husband (57) and I (55) are considering retirement planning. I earn $51,500 a year, while he is not working due to illness. I aim to retire at 65.

We have $160,000 and $435,000 in super. Our four positively geared investment properties generate $1500 per month after expenses, with a market value of $1.37 million (purchased for $801,000 in 2014-2016). They are all older properties.

We have $455,000 in savings, with debts of $294,000 on our home and $490,000 on the properties. How should we allocate our savings and adjust our super and property investments to ensure a steady retirement income?

In retirement, superannuation is likely to serve you better than some investment properties.Credit: Simon Letch

Your savings could clear the non-deductible debt on your home, and perhaps reduce the debt on the properties. With no personal mortgage to pay, and increased free cashflow from the rentals, your retirement needs are off to a good start.

You mention the properties are old, so perhaps a consideration here is future maintenance expenses. This is certainly a key distinction between property assets and listed assets such as those held by your super – properties wear out. Potentially a part of your plan could be to dispose of some or all of these properties in the future. This requires some CGT planning.

In retirement, superannuation is the best source of income because it is tax-free within the transfer balance cap (TBC), whilst also being very flexible, liquid, and most importantly, effortless.

As you have another 10 years of working life and plenty of room within the TBC, I would think it makes sense to focus on building this aspect of your personal balance sheet.

Finally, an important detail missing here is how much it costs you to live. Take some time to get an accurate number here. Retirement planning is not possible if you don’t know how much income you require.

I started a pension using the full $1.6 million cap that was applicable at the time. The balance has since grown to $2 million. I am soon to sell an investment property. Am I able to start a superannuation accumulation account and deposit any of the proceeds in, either pre- or post-tax?

To make after-tax (non-concessional) contributions your total super balance would need to be under $1.9 million on 30 June in the financial year before your contribution. Your balance is $2 million now, but maybe it was under that $1.9 million nine months ago. It’s worth taking a look.

With regards tax-deductible contributions (concessional), the $1.9 million is not applicable, but if you are over 67, you will need to satisfy a work test, and if over 75, no contribution will be possible. The maximum tax-deductible contribution that can be made is $30,000, which in the context of your financial position, would not appear to be especially impactful.

I think you’ve done well to squeeze all the juice out of the superannuation system. Perhaps a share portfolio with a healthy weighting to fully franked Australian shares would provide a good alternate solution for you.

I have had a pretty big drop in my super for the past 10 days. Should I give contributions a rest while Trump is so volatile and buy $25,000 of solar and batteries, then come back to contributions later this year? We have a combined super of $700,000 and no mortgage and I am aged 59.

When you contribute to super, you are buying investments. As a buyer, would you prefer higher prices or lower prices? Keep contributing to super and stop looking at your super balance.

Paul Benson is a certified financial planner at Guidance Financial Services. He hosts the Financial Autonomy podcast. Questions to: [e-mail]

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

Expert tips on how to save, invest and make the most of your money delivered to your inbox every Sunday. Sign up for our Real Money newsletter.