Should I withdraw $80,000 from my super to pay off my mortgage? The loan costs 6.18 per cent. Paying it off would free up about $400 a week, but I’d have less invested, a smaller emergency reserve and lose my redraw facility. Alternatively, I can comfortably keep servicing the loan while leaving my super invested. I’m 64, single and newly retired, with a $90,000 indexed-defined benefit pension and $400,000 in super.

It depends on how your $400,000 in super is invested, but assuming it has a strong growth bias (which would make sense given your risk-free defined benefit pension), then the spreadsheet answer would be to keep the mortgage and let your super continue appreciating.

We don’t live in a spreadsheet, though. In my experience, most people like to be debt-free in retirement. If clearing this mortgage would sit better with you, go for it.

I am 66 and currently work two days a week. I have an account-based pension at my full Transfer Balance Cap (TBC). My partner also works two days a week and turns 65 in September.  Would it be more advantageous for her to commence an account-based pension up to her current TBC and both continue making personal concessional contributions up to the annual cap, or should she commence a smaller pension and retain some unused TBC in case the cap increases next financial year due to indexation?

Well done getting yourselves to the point where you can each fully utilise your Transfer Balance Cap. The Transfer Balance Cap was indexed July 1 this year, and usually indexation only occurs every two or three years (if the RBA get their way), so it may be a little while until we get the next step-up.

By delaying putting some of your wife’s funds into the pension phase, she is incurring tax on earnings (15 per cent) on the portion that is left in accumulation.

Also, most years investment markets rise. The assessment against the Transfer Balance Cap only occurs once, at the point you shift to pension. Let’s say she shifts the full $2.1 million into pension today, and the market then experiences a 10 per cent return over the next year.

The balance in her tax-free pension, after allowance for the $105,000 of minimum pension drawings, would be $2,205,000, i.e. higher than the Transfer Balance Cap. By delaying commencing the pension, you have missed this growth in the tax-free environment.

My inclination therefore would be for her to move what she can into the pension phase now.

You mentioned making further contributions into super. Whilst you can certainly do this, with you each having maxed out your TBCs, give some thought to whether you could instead gift, donate, or spend this extra money. How much is enough?

**We have three adult children, two of whom are employed and have their own homes. The third one is on a disability pension and rents in a share house. We are retired and financially secure. Can we leave our house to our disabled son without it impacting on his disability pension? If the house is sold after we die, can he use that money to buy a more suitable home for him without it affecting his pension? **

You should speak to your solicitor about the establishment of a Special Disability Trust. These exist to provide for the care of someone with a disability, and they deliberately dovetail into the social security system, receiving special means testing treatment.

Special Disability Trusts can be built into your will and established as a testamentary trust.

Paul Benson is a Certified Financial Planner at Guidance Financial Services. He hosts the Financial Autonomy podcast. Questions to: paul@financialautonomy.com.au

• 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.