CASE STUDY – With a young family Ian & Cathy, in their late 30’s, wanted to control their super and pursue better returns

CASE STUDY – With a young family Ian & Cathy, in their late 30’s, wanted to control their super and pursue better returns

With a young family Ian & Cathy, in their late 30’s, wanted to control their super and pursue better returns

WHERE they were at – Ian was looking to go out on his own, and when the company he worked for scaled down as a small business, the decision was easier to make. He knew he had great technical skills and the freedom of being his own boss breathed new life into his career. Cathy was an expert professional too at a local government facility, and the variety of hours on shift work didn’t bother her. They didn’t know very much about shares, but since the stockmarket overall had gained 15-20% in  the last 2 years, Ian was keen to understand how to find shares in strong growing companies where there was a great track record of results (we call it superior management), and put in place a plan to build a better super balance to retire on.

What they WANTED to have – As yet Ian and Cathy had not thought much about what they wanted to do when they retired. They are in their late 30s and retirement seems such a long way off. He had spoken to his accountant as well as our planner who painted the possibilities of how things could be. It was hard to imagine and focus that far ahead. But it seemed reasonable that the advisor said that to aim for 70% of current income (which would grow annually in 20-30 years) should be what they need to live on. Ian would need Income Protection, Life and Total & Permanent Disability Insurance.

What it will COST The planner estimated in today’s dollars they needed $45-55,000 per annum to live on. They lived simply currently and weren’t much into dining out, but that could change, and they allowed for a nice dinner out each week of $50-60 max. This also would allow them to have an annual holiday, requiring about $3-5,000 for a local trip and maybe $10,000 for one overseas trip. They could run the 2 cars, estimated at annual running costs of $4-5,000 each per year, as they expected grandchildren in time would keep them busy!

What they would NEED – The tax advantages within super, as well as the tax-free income stream/SMSF pension 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 of 100%) converted to needing at least 20 times the comfortable income aimed-for – from $900,000 to $1,100,000. Ian realised that aiming for the higher figure would mean they had a chance to avoid the minimum, and his wife was definitely on agreement!

What to do NOW – It took a good 1.5 hour for me to explain how a self-managed super fund worked, how it was created and what the compliance and legal responsibilities were for them as trustees. Because they could have our support to guide them as professionals who are daily keeping up with the ATO and regulatory changes, they felt comfortable our team would be the partnership they needed. For now just investing in the sharemarket would suffice – and as time permitted later, they were keen to come to workshops and understand a company’s fundamentals and how the broker used technical analysis to monitor support and resistance levels and time buying opportunities. They especially liked the stop-loss precaution to safe-guard gains made from any change in market sentiment (risk management), especially if a good gain had occurred (profit-capture). The next step was to arrange for our Life Insurance expert to obtain quotes for the best product to suit Ian’s needs, but part of Cathy’s super and insurance was to be maintained in one of her industry funds for the time-being.

They now had the components in place –

Strategy to take control and their pool super, and contribute extra as they could to build as much as possible

Structure to set up an SMSF together,

Support with resources and all compliance taken care of by SuperBenefit, and other professionals, they could learn more about investment in property & shares as time allowed later. They now 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 with your advisor.

Interested to know what self-managed super (SMSF) is all about, and if it is for you? Come to a FREE seminar with bonuses, run every month – Self Managed Super Fund Roadmap (all you need to know) for the next monthly event, see 1 SMSF – FREE Seminars or our  other seminars above – Navigate Shares and Property Boost (every few months) in the menu above 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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