Retired clients now have confidence that they will be ok financially in retirement and don’t need to lose sleep around money.

Background:

Our clients are a couple in their 60’s who are both retired. One client has reached Centrelink eligibility age, while his partner has only just turned 60. Clients have net assets of $2,163,000, including their home, super accounts and current savings.

Goals:

  1. Fund their living expenses of $1,000/week from their investment portfolio & any Centrelink pension entitlements they receive
  2. Put in place strategies that will increase their Centrelink pension entitlements

Strategy:

  • We withdrew $250,000 of the older client’s allocated pension balance and contributed into the younger spouse’s super account.
  • Contributed $80,000 from their savings into the younger spouse’s super account
  • Put three years of the older spouse’s annual pension payment amount in a cash-based investment within his allocated pension account
  • From year six onwards (once savings have been depleted), draw a monthly income amount of $10K/month from allocated pensions
  • Maintained a cash safety net of $20,000

Advice Outcomes:

We presented a financial strategy that showed our clients that they would not run out of money in their lifetime with the proposed plan in place (based on the assumptions used in their plan). This was a big concern for our clients before we had met with them and completed their plan.

We increased the older client’s Centrelink entitlement by $9,000/annum which will apply until the younger client is 66 – this equals an extra $54,000 in income entitlements over six years.

We reduced the client’s concern about short-term share market volatility by investing three years of their pension income payments in a cash-based investment that will not lose capital if the share market stays volatile for the next 6-18 months while interest rates are going up.

Our clients now have confidence that they will be ok financially in retirement and don’t need to lose sleep thinking that they may run out of money. This is supported by our ongoing advice relationship with them. We will continue to review, update and adjust their plan in retirement as their goals, income needs, and the economy changes over time.

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.