Rob and Marie were in their early sixties when they were referred to us by their daughter. The main trigger for their referral? They were looking to retire as soon as they possibly could.
At the time, they owned the home they lived in, along with an investment property (the home they lived in before). They were receiving rental income from that investment property. There was also a third property in the mix – the one they planned to move into once their retirement was finalised.
On the superannuation front, they had around $500,000 distributed over various superannuation funds, including Gold State Super, (as Rob was a government employee, and had been for quite some time). Rob had benefited from the old ‘Defined Benefit’ scheme based on the duration of his employment and his income. Marie also had a few Super Funds they hadn’t really paid much attention to.
At the time of their initial appointment with us, both Rob and Marie were still employed.
A new strategy for superannuation
Our advisor identified the fact that Rob’s history of employment service with the government, (which was still ongoing), and the Gold State Super, allows for the establishment of a West State Superannuation Account with a lifetime limit on super contributions, (as opposed to an annual limit).
That lifetime contribution limit meant that Rob and Marie were free to put around $100,000 per year (pre-tax) into the West State fund. They also had the capacity to draw out some of their superannuation earnings as a tax-free retirement transition pension because they were over 60.
In terms of their retirement planning, doing the above allowed them to gain the tax-free income they needed in order to live as they gradually sacrificed a large chunk of their income through to their new West State superannuation fund.
Sound strategies save on tax and set up a comfortable retirement
The new superannuation strategy we recommended for Rob and Marie would save them around $24,000 per annum in tax. Our advisor also helped them clarify what their priorities were, and gave them a working, technical perspective on how to invest appropriately to attain financial security both in the present and the future.
Importantly, our strategy was entirely based on the resources they had at hand. Our philosophy is that it’s seldom advisable to run your life around investments. It should work the other way around – money choices should be secondary to lifestyle ones.