CASE STUDY – Peter & Deb, wondered if they could get their retirement plan in better shape with Self- Managed Super

CASE STUDY – Peter & Deb, wondered if they could get their retirement plan in better shape with Self- Managed Super

Peter & Deb, wondered if they could get their retirement plan in better shape with Self- Managed Super

Peter and Deb had heard about Self-Managed Super Fund (SMSF) and wondered how to get their retirement plan in shape.

WHERE they were atPeter and Deb were building their wealth as best they knew – they had successfully run small unit developments with family, and had renovated their own homes to move up each time to another level as much as they could stretch. Peter was consulting and his professional engineering training enabled him to use his expertise in the insurance industry – assessing risk for the insurer on the validity of the claims they received. Deb enjoyed part-time in the retail industry, but struggled with a recurring illness at times. They didn’t know very much about shares, but with the stockmarket overall gaining 15-20% in each of the last 2 years, Peter and Deb were keen to understand how shares, in strong growing companies with great managers, could be part of a plan to build a better retirement – especially such as gathering a deposit for property.

What they WANTED to haveTheir experience with investment property development and home improvement led them to enquire of our financial planner if they could perform similar projects with their super. A meeting showed that there were several options but they needed to keep within the strict super laws. They wanted to ensure they could gather enough assets to return a passive income and not rely on the Government as much as possible. They were in their early 40’s and wanted to be in a position to choose whether to work or not by 50 years old or so. They wanted the choice to have a nice holiday in Australia each year and one overseas about every 3-5 years. They had no children and had no plans to, so there were no expenses to account for there. They also needed Income Protection, Life and Total & Permanent Disability Insurance.

What it will COST – They calculated they needed $50-60,000 per annum to live on, which would allow a nice dinner out each week of $60-80 max and allow them to save for the annual holiday, requiring about $3-5,000 for a local trip and $10,000 for overseas every few years. This would also allow them to keep 2 cars, estimated at annual running costs of $4-5,000 each per year, as they wanted to be involved in the community and volunteer work.

What they would NEED – They had a goal for 2 investment properties outside of super and 3 in super of current value $400-500,000 total $1.5 mill which in 10 years (at historical growth of double every 10 years), could be worth $3 mill just in the super. Outside of super the 2 properties would value about another $2 mill. The tax advantages within super, as well as the tax-free income stream of the fund once they were in pension phase, was attractive and they even considered that they may be better to aim for more in super and less outside super where concessions were not possible. They would review this every 2-3 years.

If a conservative return of 5% is used, (one 20th) meant they would need at least 20 times the comfortable income aimed for – from $1,000,000 to $1,200,000. The goal for 3 properties in super at projected value $1.5 mill should adequately cover this. And any extra would mean a very comfortable buffer!

What to do NOW – Peter and Deb investigated the information they could find about SMSF and we explained the law and responsibilities. Most importantly, it was the investment restrictions that they needed to consider, especially with residential property, but they did not see that as a problem – it was to ensure the Sole Purpose Test was maintained, and they felt the law was only for everyone’s own protection. They also wanted to invest in strong growing companies to build a deposit for each property, and would come to one of our Share Workshops in a few months to learn how to identify these sorts of companies. We would arrange for our Life Insurance expert to arrange quotes for the best product to suit their needs, as well as cover Deb’s illness in the best way possible.

They now had the components in place –

Strategy – To take control and pool their super, and contribute extra as they could

Structure To set up an SMSF together, alongside their non-super investments

Support With our resources and all compliance taken care of by SuperBenefit, it meant they could learn more about investment in property & shares as well as focus on managing the investment plan. This meant they felt in control and it felt very manageable to them. They could see a well-planned future and had a team to support them.

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  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!
This entry was posted in 2 Past Newsletter Topics, Case Studies of Clients, Retirement Planning, Superannuation General and tagged , , , . Bookmark the permalink.

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