$1.1M Inheritance Strategy for Retirees
Background: Meet Beth and John
Beth and John are a financially comfortable couple in their late 70s who have been long-term clients of Yield for over 16 years. Throughout their retirement, they have maintained a modest yet well-managed financial lifestyle.
Following the passing of Beth’s mother, the couple received an inheritance of approximately $1.1 million, comprising proceeds from the family home, shares, and cash. With this unexpected windfall, they sought guidance on how to make the most of the opportunity, not just for their own financial security, but also to enhance the legacy they hope to leave for their family.
Key Results at a Glance
-
Investments:$1.26M invested jointly in a diversified, tax-efficient portfolio
-
Estate Planning :Preserved 91.76% tax-free super for estate planning
-
Tax Savings:Removed up to $11,516 in future super death tax by withdrawing John’s $78.5K
-
Cash Flow :Covered $8,583/month living expenses via cash, investments & pension
Why Did They Seek Advice?
- Determine how best to invest the $1.1 million inheritance in a cost-effective and tax-efficient manner.
- Assess the sustainability of their desired retirement income of $103,000 per annum, including how the inheritance could support or supplement this need.
- Review their current superannuation structure to ensure it remains appropriate given their age, risk tolerance, and the addition of new assets.
- Identify opportunities to enhance their family legacy through strategic estate planning and intergenerational wealth transfer.
Strategies Implemented
Despite our established relationship, we took a fresh approach, revisiting their goals, priorities, and financial structure to ensure any strategy would align with their current life stage, income needs of $103,000 per annum, and risk tolerance.
In addition to managing the inheritance in a cost- and tax-effective manner, we reviewed their existing superannuation arrangements and broader investment strategy to determine whether any adjustments were needed to support their objectives.
Inheritance Advice:
- Reviewing several options, which included investing the inheritance through a family trust, we firstly recommended that Beth retain her existing superannuation pension account and continue to take minimum pension payments from it.
- This aligned with our previous advice to proactively preserve Beth’s super, as the fund had been established entirely with taxed money prior to retirement, meaning it will be largely tax-free for their non-dependent children.
- For John however we recommended he withdraw his full benefits, or approximately $78,570, from his Superannuation pension Account, and have it paid into their bank account. Ultimately adding the proceeds to the pool of funds from Beth’s inheritance to be invested personally.
- Using cash proceeds from the inheritance and John’s full pension withdrawal, we recommended they invest $1.26m into a portfolio of diversified investments owned in joint names, to function as income streams to meet their continuing living expenses.
- Our analysis suggested that investing in joint names was an appropriate strategy for John and Beth, as the projected income and realised capital gains associated with investing these funds is unlikely to trigger a need to pay personal income tax.
- Ensured the investment portfolio aligned with their 70% growth / 30% defensive risk profile to balance long-term growth with income stability.
Superannuation Advice:
- We recommended that John close his superannuation pension account to simplify the management of their finances. By consolidating their accounts, John and Beth now have a clearer view of their financial position, allowing for better-informed decisions.
- Closing the account also reduced their ongoing costs, saving approximately $374 per year in platform fees. These savings can now be redirected toward other financial goals or investments.
- A major benefit of closing the account was the elimination of potential superannuation death benefits tax. John’s super was almost entirely taxable, and while tax-free to John and Beth during their lifetime, it would have triggered up to $11,156 in tax for their non-dependent children. This strategy ensures more of their wealth is preserved for their family.
- Since both John and Beth are over 60 and retired, the withdrawal of John's superannuation funds was completely tax-free. This allowed them to access and reinvest these funds without incurring any additional tax.
- Overall, this strategic move has simplified their financial structure, reduced unnecessary costs, eliminated future tax liabilities, and provided tax-free access to their retirement savings, all contributing to a more efficient and secure financial plan.
Cash Flow Management:
- As retirees, John and Beth needed a reliable strategy to meet their ongoing living expenses while maintaining flexibility for changing needs over time.
- We recommended they always retain a $10,000 cash buffer in a high-interest savings account to ensure immediate access to funds when needed.
- To support their regular income needs, we advised setting up automated withdrawals from their joint investment account into their bank account.
- These withdrawals are designed to supplement Beth’s minimum pension payments, ensuring their total income requirements are met consistently.
- Our analysis showed that prioritising income from the investment account over Beth’s superannuation pension helps preserve her super balance, which is 91.76% tax-free, thereby maximising the after-tax value of the legacy passed on to their beneficiaries.
- This strategic approach ensures a stable income throughout retirement while enhancing the long-term financial outcome for their family.
Estate Planning Advice:
- Since their additional investment capital is invested in joint names, it will now become an estate asset.
- To ensure these assets are distributed according to their wishes and to minimise potential family disputes, we recommended they seek professional legal advice.
- Following our guidance, they engaged a solicitor to review and update their Wills, ensuring their estate plan is current and comprehensive.
- This step not only helps protect their legacy but also enhances clarity and certainty for their family, reducing the likelihood of future estate contests.
Outcomes and Benefits
- Successfully invested $1.26 million in a cost-effective, tax-efficient portfolio aligned to their risk profile.
- Structured their cash flow to reliably meet their $103,000 annual income needs without eroding key tax-advantaged assets.
- Preserved over 90% of Beth’s superannuation as a largely tax-free asset for their children.
- Eliminated up to $11,156 in potential superannuation death benefits tax by withdrawing John’s taxable super.
- Reduced ongoing platform fees by approximately $374 annually through super account consolidation.
- Enhanced estate clarity and protection by prompting legal review and update of Wills and estate plans.
Key Takeaway
Investing inheritance requires careful consideration and professional guidance to ensure optimal outcomes for your financial well-being. It is highly valuable to consult with an expert, as they can advise you on the best ways to invest an inheritance, develop a plan to help you meet your long-term financial objectives, and steer clear of any potential tax pitfalls.
Life is Full of Possibilities
Book your free consultation with a Yield Advisor.
Fantastic experience with this professional service offering and the people over many years. It is a personal approach with a sensitive tone to your entire life in mind. It doesn’t feel transactional and well worth your investment in time and money. Highly recommend the team.
Demi Papadoiliopoulos
Book NowMeet the Experts Behind the Strategy
Important Note
Produced with our client’s permission. Names within this case study have been changed to protect the client’s right to privacy. The content of this case study has been based on a real-life client. 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.Â
You May Also Like
James McFall, CFP® 
August 17, 2025 
James McFall, CFP® August 2, 2025 
James McFall, CFP® October 13, 2023 
What Our Clients Say
We have entrusted our wealth creation and future security with Yield Financial Planning for a number of years now. They truly are professionals who have stayed ahead of the game by making strategic decisions at the right time and have always given sound advice. Security for our future is in great hands. Thanks Yield Financial Planning!!!
Yield Financial Planning has provided us with professional expert sound advice. It is always a pleasure to deal James and his team who always have our best interests at heart and has set up a sound plan for retirement. James and his team have provided first rate advice and funds management. I have confidence in James’s competence and integrity.
Yield Financial Planning have been excellent in their advice and investment strategies being a pleasure to work with over many years. Their strategies and constant portfolio reviews making changes when needed have guided us right through from our working days, the GFC and now retirement. We hold Yield as being an invaluable necessity.
Just the excellent service we receive and doesn’t matter how many questions we have; the staff are happy to oblige. They follow things through and let us think about important and critical matters methodically with a helping hand along the way. So overall the Journey is pleasant, professional and comprehensive yet it is explained to you what could help you or your needs.
I’ve been with Yield for more than 10 years and I’ve found the advice invaluable in helping to navigate life’s twists and turns. Highly recommended 5 Stars!
I would like to congratulate Yield Financial Planning, for their high quality of care, expertise and knowledge they have provided in ensuring my future growth is heading in the right direction. These qualities have reflected both in results and the ongoing follow up as an existing client, which I find reassuring.
Have been with Yield for a few years as my financial planners, and was very pleased when they announced their Mortgage Brokering Services – their Broker had great communication, and at no time was I unsure of where we were in the process. Being my Financial Planner, I was much more comfortable knowing they had my interests at the forefront of all negotiations – rather than getting a mortgage broker off the street who is probably aligned with a bank. From a more financial perspective, Yield saved us over $5000 per year through reduced interest payments alone – I highly recommend looking into Yield Financial
Get In Touch
Interested to discuss something?
Have a question or comment?
Submit your details and we’ll be in touch.
Free Consultation
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.
Plan Your Financial Success,
Book a Call Now!
Talk to an expert about your financial needs today
- 03 9069 2636
- service@yieldfp.com.au
- 4/670 Canterbury Rd, Surrey Hills VIC 3127
Nationally Awarded Top 3 Certified Financial Planner
450+
Empowered Clients we Support
81+
Net Promoter Score, Exceptional for Financial Advisors
12
Professional Excellence Awards
What Our Clients Say
We have entrusted our wealth creation and future security with Yield FP for a number of years now. They truly are professionals who have stayed ahead of the game by making strategic decisions at the right time and have always given sound advice. Security for our future is in great hands. Thanks YFP!!!
