Brad was about to turn 65 and was looking to retire whilst his 50 y.o. wife Angelina has been a stay at home mum to look after their children. Brad has $500,000 in his superannuation and they have an investment property they own jointly worth $400,000 where they receive rent of $300 per week. Due to previous capital losses any capital gain would be offset. Their immediate need was to see how they best manage their financial assets so that they can enjoy retirement without financial concerns.
We recommended that Brad and Angelina consider selling the property and use the proceeds to make a non-concessional contribution to super in Angelina’s name. We also recommend that when Brad retires he rollover his super to commence an allocated pension drawing the minimum pension which would be tax-free.
Not only does Brad receive a tax-free pension via his new allocated pension, his likely age pension may increase by about $7,800 from $1,750 pa to $9,550 pa.
Today, Brad and Angelina are enjoying the retirement lifestyle they always looked forward to. We continue to help them extend and protect their wealth for future generations.
This is a hypothetical example based on a real client experience. Names and details have been changed.