Don’t we all dream of a windfall? This happened to some clients of ours, Luke and Sarah, and they came to us seeking advice on the best way to manage and optimise their situation.
Financial windfalls come in many guises – redundancy payouts, bonuses, inheritances and legal settlements to name a few. It is always sensible to review your financial plan at a juncture like this. If you have found yourself in these circumstances this story is worth reading.
Wisely this delightful couple had not gone on a shopping spree. They had continued their life and work as normal. Being in their mid 50s they were aware that this extra money could make a significant difference to their retirement planning if the right strategies were put in place.
Prior to this event, Luke and Sarah had accumulated a reasonable amount of superannuation but it was not enough to retire. In their new circumstances they wanted to know if they this may now be possible.
Everyone’s retirement expectations and bucket lists are different. It is important to understand what these are so that budgets and income requirements can be calculated. Travel was a big one for Luke and Sarah. They were very keen to know if they could safely head off on a long trip around Australia in 2021. When the world returns to freer travel, they also have dreams of driving a campervan around Europe.
Our job was to establish how much money they were going to need and to come up with a diversified investment plan that was in line with their tolerance for risk and would have sufficient liquidity to provide an income. We also recommended that over the next few years they transition some of their investment money into super to help minimise tax as well as build retirement savings.
Luke and Sarah were also keen to look at the estate planning implications so we worked with them to come up with a strategy that structured their super investments in a way that would minimise the tax that their beneficiaries would have to pay. They were delighted to learn that the right structure could save approximately 17.5% - a significant sum of money.
By seeking our advice Luke and Sarah now have peace of mind. They are secure in the knowledge that they will have an income going forward, to enjoy the things they want to do in retirement. We have created a portfolio that is in line with their risk comfort and have set aside some cash for short-term emergencies. With our knowledge of superannuation and how best to invest to minimise tax they are also making considerable savings for themselves and their beneficiaries.
And, yes – they are heading off on that trip around Australia next year!
Having the right advice in circumstances like these can make all the difference. It is not just about the financial products you invest in. A financial planner will take a holistic look at your unique situation and come up with a strategy that will work best for you.
General Advice Warning
The information provided in this article is general in nature and does not take into account your particular investment objectives, financial situation or insurance needs; we therefore recommend you seek advice tailored to your individual circumstances before making any specific decisions.
Dobbrick Financial Services (Gympie) Pty Ltd ABN 48 931 205 109 and Dobbrick Financial Services (Ipswich) ABN 86 100 184 521 & DFS Oakland ABN 64 340 527 395 and their advisers are authorised representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306.
