Help! My Partner Left Me Poor

HI Scott,

My partner left me in a poor financial state when he broke up with me. My house is worth $275k and I own $90k of it. I have $110k of superannuation, I earn $95k and I am 51 years old. I want to retire at 65. So, should I sell my house and try to buy a unit at around $280k on an interest only loan and salary sacrifice the balance of what I used to pay on my home loan into my super, or should I try to pay off my unit once I've bought it?

Wendy

Hi Wendy,

Hang around my inbox for a while Wendy, and you’ll find thousands of people who would happily trade places with you: you’re young, you’ve got equity in your place, and you’ve got more super than most women. Life is good. Now let’s make it better.

First things first: there’s no reason to sell your current home – you can refinance your existing home loan to interest only – though I wouldn’t recommend it.

Instead, I’d stay where you are, and aim to have it paid off by the time you retire – at 67 (let’s tack on another two years of work).

If you pay $1550 a month off your home loan, you’ll be on track to be debt free when you retire (though understand interest rates will likely increase over the next 16 years).

If you can get your non-mortgage living expenses down to about $2,500 a month, you’ll beable to salary sacrifice $1700 a month into your low-cost growth-orientated superannuation fund. And if you can do that, you’ll be on track to retire with a balance of $560,000.

Scott