Prudent long-term planning is essential. Here we outline one of our many success stories of helping our clients live well for today and plan meaningful legacies for future generations.

 

CLIENT SITUATION

A 62-year old small business owner John and his wife Kate, a 55-year old teacher employee, were both preparing to retire within six months. In addition to $4.5 Million in Business Assets, they also had a $1 Million investment accounts, two $1 Million Holiday Homes, and a $1.5 Million Superannuation plan from which to draw retirement income.

With an overall net worth of $8 Million, they had clearly saved and invested diligently throughout their careers. Even so, they had many questions about how they could best position their assets to reach their retirement goals.

 

THE NEED

They came to Shaun seeking someone that could provide them with comprehensive financial planning and collaborative asset management, but also act as a trusted advisor throughout the retirement process. They had concerns about how they could draw from each asset in the most optimal way and wanted more guidance about what they could continue to spend comfortably. During their initial meeting, they brought the following questions that we often hear:

  • Do we have the enough money to retire?
  • How do we structure and allocate our assets to sustain our income level?
  • With this plan, how much will we have left to pass on to our children?
  • How can we build a plan to minimise our income and ultimate estate tax exposure?

 

THE SOLUTION

Shaun analysed their income, savings and growth goals to advise how to receive optimal payouts from their superannuation. He ran multiple projections to illustrate tax effects, return rates, and exposure to loss by structuring the plans in various ways. Through detailed cash flow and corresponding net worth projections, he was able to recommend an optimised income plan.

He established a way to distribute a net amount to their checking account to pay bills. He also created an Investment Bond to capture and invest the monthly surplus cash flow from the retirement payouts. Additionally, we allocated a portion of the superannuation plans to an income and growth oriented investment portfolio to meet income and wealth preservation goals.

Finally, the healthy couple was able to secure an Estate Plan to ensure that the Estate was distributed as equalling taking into account the tax positions on all the investment to ensure that the net tax outcome was distributed equally.

 

THE OUTCOME

Using a conservative approach aligned with their risk tolerance, Shaun was able to ensure $1 Million of the couple’s Superannuation balance could be managed with minimal downside risk while securing a strong income stream.

Our detailed financial plan projection reports gave our clients a high level of confidence that our conservative strategies would help them preserve their income in line with their spending and estate planning goals. Relying on particular investment products to provide steady income in replacement of the couple’s Superannuation and will help maintain an increasing asset base and net worth over our clients’ lives, even with conservative investment management approaches.