CASE STUDY – Margaret & Harold, knew that term deposits were not enough to ensure their money would last

CASE STUDY – Margaret & Harold, knew that term deposits were not enough to ensure their money would last

Margaret & Harold, knew that term deposits were not enough to ensure their money would last

WHERE they were at – Margaret had enjoyed her service to the public sector, as it was more like serving the community and she had also been blessed to have the occasional chance to enjoy living in other countries and be immersed in their culture and life. They owned their home and had some cash spare for emergencies. They also had a couple of hundred thousand in several super accounts. There were no children, but they had enjoyed helping others.

What they WANTED to have – With Harold they had much to be thankful for, but in her mid 60’s and Harold in mid 50’s, she was concerned. They loved a regional town that she had lived in years ago, and, not happy with the bustle of city life and her growing concern for the deterioration of the environment and natural resources, she yearned for the country and simpler life to spend the remainder of their lives.

What it will COST They saw that property was less in the town they liked, than their city home, but a deposit would be needed while the current home was put on the market, rather than having the stress of “subject to sale of current home”. There were no plans to travel, the comforts of home were enough. They calculated they needed $25-35,000 per annum as adequate to live on.

What they would NEEDIf a conservative return of 5% is used, (one 20th) meant they would need at least 20 times the comfortable income aimed for – from $500,000 to $700,000. There was $250,000 in super and Margaret had another $150,000 in Term Deposits. She felt safe with Term Deposits, as they were simple and easy to understand. However could she do more? And since there was not enough, how could they survive?

What to do NOW Margaret and Harold didn’t realize they could also get a part Government pension, based on their asset test, mainly. Having a self-managed super fund would allow her to combine together her various super accounts and put more of the cash in a haven to gain tax-free benefits. She was just before 65 and tutoring part-time so she was able to contribute the cash (non-concessional) without a work test and some could be contributed to Harold’s member account. She could officially retire, and once 65 obtain the Age Pension. They were surprised that they could get a part pension as well as start to draw on their super. They had the flexibility to draw out as much as they wanted for the deposit when they found the house they liked in the country town, while keeping the money in a tax-free environment in pension phase.

Now the components were in place –

Strategy – Was to pool super and contribute as much as they could of the cash – they can easily access when required. Look for that country house, and make plans to sell the city home.

StructureCombine super in an SMSF for control and the tax advantages.

Support – They appreciated how we would support their needs with an advisor. They also liked that all the compliance would be handled and didn’t need to concern themselves. They thought it was great to be able to learn about investment with the education SuperBenefit provided, but they preferred to stick to the basics. They would talk to our broker and consider his recommendations, but environment would be the main concern and they would only choose companies that also cared for the environment.

Note – This is a simplified summary of one client – we recommend asking for a FREE consultation and/or seeking further professional advice.

Interested to know what self-managed super (SMSF) is all about, how to get setup FREE and if it is for you? Come to a FREE seminar with bonuses every month Self Managed Super Fund Roadmap (all you need to know) for the next monthly event, see 1 SMSF – FREE Seminars or call us 0407 361 596.


About SuperBenefitnews

Self-Managed Superannuation Service Providers in Australia. SuperBenefit provides a wholistic SMSF assistance, education and administration service continuum - 1. “assistance” is help of whatsoever nature where our overall SMSF experience and knowledge enables us to provide assistance/help without any legal (or “license”) limitations. 2. “education” involves providing knowledge through teaching, coaching and mentoring about all matters SMSF, including (but not limited to) investment issues such as equities and property, 3. “administration” encompasses all admin aspects of legally required SMSF trustee and member record keeping including (but not limited to) audit and ATO matters. In keeping with our key point that SuperBenefit does not provide Financial Advice, where issues arise from 1, 2, and/or 3 above Indicate a need for a legally authorized provider (such as a Financial Adviser) and the client does not have their own service provider, the client can utilize SuperBenefit’s ‘Connect Assist’ … SuperBenefit, in itself, does not provide Financial Advice, but it does provide the wherewithal for great SMSF service. WE do not provide Financial Advice or any other service that requires a legally authorized provider. However, where such advice or service is required we have our ‘Connect Assist’, a SuperBenefit resource we use to connect clients to a Licensed Advisor or other legally authorised service provider. Call us 0407 361 596, no obligation FREE Connection call to see how we can help you!
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