A fantastic retirement lifestyle after working very hard to reach this financial position

Background:

Our client are a couple in their 70’s with a household income of approx. $358K/annum. They have net assets of $3,257,000, which includes their home, super accounts and $1,100,000 in cash after recently selling an investment property. Clients have had to delay retirement because of a business deal that went bad in their 50’s and want to use the funds from their investment property sale to retire ASAP.

Goals:

  1. Put a plan in place for retirement and be able to fund their living expenses of $8,000/month from their investments
  2. Allocate $24,000 for annual travel for the first 10 years of retirement

Strategy:

  • Contribute as much of their savings as possible from the investment property sale into superannuation – strategy allowed clients to contribute $775,500 into superannuation over two financial years
  • Use some of their savings to make personal deductible super contributions and reduce their tax 
  • Once retired, fund annual living costs from property sale proceeds that we could not contribute into super as well an income from their newly created allocated pension accounts – allowing us to leave funds invested in their pension accounts for longer
  • From year six onwards (once savings have been depleted), draw a monthly income amount of $10K/month from allocated pensions
  • Maintain a cash safety net of $50,000

Advice Outcomes:

Both clients will be retiring within 5 months of our initial meeting with them.

As part of our superannuation advice, we were able to reduce the fees our clients were paying in their superannuation accounts by $8,909/annum.

Super contribution strategy will save clients approx. $24,400 in income tax over the next two financial years.

Clients have a plan in place that allows them to go on all the trips they have planned for retirement while being able to maintain their current lifestyle.

This means they don’t have to change their lifestyle, change the way they travel or cut things back in retirement after working very hard to get into the financial position they are in.

Ryan Porter is a Wealth Coach at Catalyst Wealth Group. His mission is to help his clients achieve financial success and live their ideal life.

Any advice or information in this publication is of a general nature only and has not taken into account your personal circumstances, needs or objectives. Because of that, before acting on the advice, you should consider its appropriateness to you, having regard to your objectives, financial situation or needs.