A Yield Client Case Study 
An additional $145,000 contributed to super with our advice
Concessional, Co-contribution & Spouse Contribution recommended for risk-free returns
Ability to retire debt-free in retirement with our advice implemented
Targeted insurance cover to reflect their situation, savings of $4,946 pa. that can be added to their retirement nest egg
An additional $145,000 contributed to super with our advice
Concessional, Co-contribution & Spouse Contribution recommended for risk-free returns
Ability to retire debt-free in retirement with our advice implemented
Targeted insurance cover to reflect their situation, savings of $4,946 pa. that can be added to their retirement nest egg
These clients, harnessed concessional contributions to their Super and strategic financial advice to secure their ideal retirement.
A couple drawing closer to retirement, had a range of assets and wanted a strategic plan that ensured their comfortable transition to retirement.
We analysed all their investments and saw that harnessing concessional and non-concessional super contributions could significantly improve and ensure their retirement fund whilst also saving them money now.
Introduction
This couple had a range of investments and assets, such as a holiday house, a property in Frankston passed down through inheritance, multiple super funds, and some shares to top it off.
Yield’s job was to review how they could best position themselves for retirement, and a big part of this was how we could position the couple to retire debt-free.
We advised on how positioning their investments could be done to make their money work in the most strategic way possible and on financial planning solutions that could help them in retirement.
Overview
Our clients had recently come into owning half of a property in Frankston, with the husband’s brother owning the other half through inheritance.
They also had a holiday house in Bonnie Doon that they wanted to retain for as long as possible.
They both had a superfund, one with Care Super and the other with Vic Super, with the husband having his own SMSF too with a significant portion being held in shares and property.
Another concern with the SMSF is that the investment strategy hadn’t been updated in over 10 years, which was an obvious concern, as typically they should be updated every year.
The couple also had a collection of shares that they were not actively managing. Our advice harnessed this investment to benefit them in other ways including paying off debt and making concessional and non-concessional super contributions.
Creating a strategic plan around how to use their super fund to make their money work best for them and improving this by harnessing concessional and non-concessional super contributions was the focus of our financial plan.
Outcomes – Using Concessional Super Contributions
We firstly recommended the sale of the Frankston house, as without this, it could mean our clients held a lot of debt into retirement. This advice also suited the husband’s brother as the other beneficiary of the home.
Through the sale of the Frankston house and their shares, this was advised to be used to pay off credit card debt, car loans, and be able to contribute to super.
Further we recommended their investment loan be switched to interest only repayments so that the principal amounts paid can instead go towards the offset account against their non-deductible loan to increase flexibility in future if they have any non-tax deductible expenditure. This essentially acts to preserve the tax deductibility of the debt.
With all of these solutions in place, we found that this would allow the couple to retire debt free and improve their retirement nest egg.
When it comes to using concessional super contributions to improve their super balance, the husband could contribute $11,843 in the 2020/21 financial year and save $2,013 on tax through this to also contribute to super.
We advised that she also start to maximise concessional super contributions via salary sacrifice of $3,306 per annum, which would save her $562 each year of tax usually paid.
This was on top of the $145,000 contributed non-concessionally to super from the sale of the Frankston house and shares.
We recommended rolling over all of the wife’s super, and as much as possible of the husband’s super into their SMSF, retaining enough to keep the account open, to keep the income protection he had with Vic Super account.
We cancelled the wife’s insurance cover because it was no longer required and recommended adequate cover for the husband. This saved them $4,946 pa in premiums that can be added to their retirement nest egg.
We also recommended implementing an updated investment strategy.
As a result of our advice the SMSF was invested in a diversified asset collection that was more focused on their goals for retirement.
We advised on setting up a high interest earning Cash Management Account for the SMSF and using it as a hub to assist with investing a diversified portfolio of investment funds held directly on the stock market, which is highly cost effective.
Down the track, we saw that selling the Bonnie Doon property would be required when the youngest of the couple is 79, helping them to fulfill their objective of retaining their holiday home for as long as possible.
The below figures are based on our projections on where their retirement fund will be at its current trajectory and where they could be with our advice.
