Firstly you have some significant financial planning needs for the next four to five years, and you should really make an appointment to develop a specific plan (with a financial planner who is a member of the Financial Planning Association of Australia, such advisors will have a qualification known as AFP or CFP).
The issues emerging in your question include, debt reduction for semi retirement, having enough funds in super to retire (or semi retire) comfortably, and reviewing your super structure (i.e. retain current fund or start a Self Managed Super Fund – SMSF).
I think you do need to aim to have your debt either repaid, or significantly reduced within the next four years, so that your husband’s reduced income from work (at semi retirement time) is not being drained by debt servicing. Further to that, you need to also consider building up your retirement income asset base (buying shares as you have noted, or some other form of investing).
I also note that with your husband’s level of net income, he would likely be a “high income earner” and would be in one off the higher marginal tax brackets – probably paying at least 38.5% in tax on any extra dollar of income earned. If he is not already doing so, he could consider salary sacrificing some income to his super, up to the allowable concessional contribution cap (currently $25,000, but going up to $35,000 next financial year). You need to note employer contributions also count towards this cap.
This money “sacrificed” gets taxed at the 15% super contribution tax rate, rather than his personal marginal rate of say 38.5%. So this both saves a lot of tax, and further builds up the superannuation balance. Super is generally seen as the best retirement tax structure to use, due to the zero tax rate that can be achieved.
If you work out with your financial planner, what retirement cost of living you are likely to have, you can work back to what amount in super you need to target, and therefore what contributions are needed across the next four years. Depending on what that target income figure is, you could say invest some of the super contributions for retirement, and also hold some off the funds in cash (within your super balance) with the view that upon retirement, you could withdraw those funds, and put them towards the outstanding mortgage balance. This could well be a more tax effective way to pay down the mortgage, rather than earning the income personally, and paying more income tax and then paying the mortgage off.
A financial planner could also help you review your current super options, next to a SMSF to help determine if making a change to a SMSF would be right for you.
This includes considering cost, control of assets, type of investments you wish to access, insurance needs and access to cover, and are you able to manage the extra trustee responsibilities of running a SMSF, including developing, implementing and reviewing an appropriate investment strategy, record keeping and attending to taxation and reporting obligations.
By Joel Bones CFP®