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Book a FREE consultation
and receive your complimentary eBook

Get started with a free strategy consultation and receive a copy of the Good Fortune Guide – written by James McFall, Managing Director Yield FP and 2020 National Finalist Certified Financial Planner of the Year to help educate you on your Financial Plan.

Transition To Retirement Sooner Than You Think

Transition To Retirement Sooner Than You Think

We prepared a transition to retirement plan for a couple in their 50’s recently. He has a health condition which forced him to reprioritise what was important to him and as a result, is now largely retired. Having worked at Telstra for over 20 years, he was fortunate to have a defined benefit pension, which will meet a lot of their ongoing income needs. 

His wife intended to continue working and they wanted to know how long this would be necessary and what more they could be doing to prepare themselves for retirement. They had ideal objectives around travel that they wanted us to help them budget for and advice to fund their ideal lifestyle and transition to retirement.

We researched his defined benefit and advised that it should be retained due to the certainty of income and reversionary benefit it would pay to his wife. Outside of this, as a result of other advice we were able to provide, we identified that we could help bring forward her retirement by 3 years. 

Current figures represent a scenario of how the client’s position may look where they simply carried on as they currently are and not implementing any of our recommendations. This scenario assumes that the client is fully retired at age 58.

The advice we gave that helped achieve this outcome included them both making concessional contributions to super, which resulted in an annual tax saving of $6,185. We recommended she put $1,000 p.a. to receive the co-contribution for a $2,500 benefit over 5 years.

We also recommended they pay off their credit card debt for a $14K saving, compared to their current minimum payment plan and recommended they reduce their insurance cover in line with their needs. 

We then advised they do a re-contribution strategy, which had an estimated strategy value of $36,320 for their estate.

If you would like to discuss your retirement plan or start to have one developed, please feel free to contact us with any questions.

Important Note

The recommended figures represent a scenario of how the client’s position may look going into retirement, assuming they retired at the same age but implemented all of our recommendations.

Any information provided here is general advice only and does not consider your objectives, financial situation or needs. This information should not be taken as comprehensive and does not constitute legal or financial advice. You should seek legal, financial or other professional advice before relying on any content. Yield Financial Planning is not responsible to you or anyone else for any loss suffered in connection with the use of this information. Information is only current at the date initially published.

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