Case Study: How to manage assets, debt & finances with one partner immediately retiring

Background:

Our clients are a couple in their 60’s with a household income of approx. $100K/annum. Net assets of $2,200,00 with a debt of $475,000 in place against their home and investment property. One partner will be retiring immediately. They need to know how to manage their finances with only one partner working.  

Goals:

  • Put a plan in place for retirement and be able to fund their living expenses of $60K/annum from their investments
  • Pay off all debt so they don’t have to worry about mortgage repayments anymore

Strategy:

  • Sell investment property and pay off all debt
  • Use proceeds from the investment property sale (once loans are paid off) to make catch up super contributions in working partner’s name
  • Set up an allocated pension account for the retired client where he will receive a regular fortnightly income from his superannuation
  • Reviewed Centrelink entitlements and put in place a super strategy that allowed us to increase the retired partner’s annual entitlements

Advice Outcomes:

Our retired client is able to retire and as a couple they will have a financial strategy in place that allows them to fund their living expenses through three different income sources.

The super contribution strategy will reduce capital gains tax on an investment property sale by approx. $19,000 once implemented.

Our Clients feel comfortable that they don’t have to stress about money now that one partner has retired and they don’t have any more monthly mortgage repayments they need to make to a bank.

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.