OK, the quick reply is simple: you need to make a choice between living off rental income (which will be taxed at the usual marginal rates) or converting to cash and putting it into your super account as a nonconcessional contribution and have that income not taxed. That will inform your decision about paying off a mortgage or maximizing your investment property ownership.
Personally (and I'm NOT you!) if I was looking to fund retirement, and given the increasing talk of the collapse of the housing bubble and the fact that rental income is not particularly attractive (as a % return on investment. What% 3 to 5%?) and that your landlord costs are only going to increase with time, I'd plan to get out of property rental. Of course, if your conviction is that house prices will appreciate considerably, then you'd delay when you cashed those properties in.
The point of putting wealth into Super is two fold:
1. income generated in super is not taxed
2. it is likely, but not guaranteed, that you'd get a higher income stream outside rental (ignoring capital). It is easy to get 4 - 6% income from shares, for example (all big banks pay dividends above 5%). Company bonds are returning 5 - 10%, the latter with high risk.
Right now, using the bring forward rules, you and your wife could put $300k each into super. You can do that again once 3 years have passed. $600k at 5% return (hassle free) is an income of $30k pa. Do you get that from rentals?
This is a very broad topic and you need to see a licensed, qualified advisor. To make the most of such a meeting, you need to at least look at the options available, the income required going into retirement, and the immediate needs of your family. While forums like HotCopper can expose you to those options, you should not take advice from here without talking to that expert.
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