Case Studies

Case Study #1 - Wealth Accumulation

Background Information

Gary and Jody came to see us in their mid thirties. They had two young children and Jody had just returned to the workforce. They were looking at how best to use the extra income to reduce their debt and provide for education expenses and wealth accumulation.

How We Helped

Our first priority was to fully understand their current family budget. We then reviewed their mortgage, superannuation and insurances. Given their age they were reluctant to tie up extra funds in super. We suggested a debt recycling strategy. This would enable them to reduce their mortgage at the same time as tax effectively growing their investments and retaining access to their funds. This provided some comfort for future education funding needs. Our review of their current insurances revealed a major financial risk in the event of death, disability, injury or illness. We recommended increase life insurance through their employer super funds and external income protection with a small amount of trauma cover.

Outcomes

  • Home loan restructured to a home loan and investment loan.
  • Create a managed share investment portfolio with an annual contribution.
  • Reduction in debt and tax effectiveness.
  • Growing wealth while retaining access to funds if required
  • Protecting the family's financial future in the event that either Jody or Gary are unable to work or have a major health event.

 

Case Study #2 - Pre-Retirement Advice

Background Information

Mark and Judy came to see us in their early fifties. Their children were almost independant and they were looking to provide for their retirement and enjoy some travel before retiring at age 65. They had almost paid off the mortgage and had some employer superannuation that they did not understand and had not been performing for years. Their biggest expense was income tax.

How We Helped

Essentially they wanted to revamp the super, plan a holiday and reduce tax. We discussed planning a major holiday at age 55. We implemented a restructure of their home loan payments to maximise their capital reduction as well as using some home equity to regularly invest into blue chip Australian shares. We reviewed their super fund and investment choices and commenced salary sacrifice into both super funds to tax effectively grow their super balance. At age 55 we commenced two transition to retirement pensions where the first years drawings paid for the holiday overseas. We recommenced the salary sacrifice into super following the holiday and created a self managed super fund as soon as it was cost effective for our clients and they had developed the confidence to be trustees. Mark and Judy are substantially self funded in retirement but still can access a small age pension and all the associated health and utility benefits. They now travel regularly within Australia knowing that the investment and admistration of their income and assets is professionally managed. 

Outcomes

  • Home loan restructured to maximise capital reduction
  • Setup a blue chip investment portfolio
  • Setup salary sacrafice
  • Increased super balance
  • Setup a savings plan for an overseas holiday
  • Carefree administration
     

 

 Case Study #3 - Retirement Advice 

Background Information 

Background InformatioJohn was working as a teacher and about to turn 65. His wife Jill was 62 and had already retired. They both had existing superannuation and they wanted advice on how John could retire and work part time for another year or two. They also wanted to take an overseas holiday before John fully retired.

How We Helped 

We talked to Jill and John about their income needs in retirement and how long John would work part time. Next we produced a financial model of their situation and discussed some alternative strategies with them. Our advice was to restructure their superannuation to reduce their assesable assets for the Centrelink age pension. Calculations to determine the most effective income result showed that it was better for John to work 3 days per week rather than the four days he originally intended. This enabled him to qualify for a part age pension and benefits. We also created an account based pension using John's super which provided a tax free investing environment and topped up his after tax income to match his prior full time salary. This further enabled Jill and John to save for the holiday they desired. After reviewing their current investment strategy we discovered that they were unknowingly taking too much risk. We advised them on some new investment options to reduce risk yet continue to meet their future income needs.

Mark and Sue came to see us in their early fifties. Their children were almost independant and they were looking to provide for their retirement and enjoy some travel before retiring at age 65. They had almost paid off the mortgage and had some employer superannuation that they did not understand and had not been performing for years. Their biggest expense was income tax.Outcomes

  • John works part time and preserves most of his superannuation.
  • John qualifies for the age pension and benefits to top up his income and reduce expenses.
  • A new allocated pension provides tax free income up to their previous lifestyle.
  • Most of their retirement savings can compound for another few years.
  • They can fully retire on a higher income than otherwise after Jill reaches age pension age.
  • They were able to take the holiday they wanted rather than waiting untill full retirement.
  • Investments reviewed to reduce risk and match their objectives.

General Advice Warning

The advice on this site may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial advice prior to acting on this information.