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Bob and Shirley are 53 and 52. They both work full time and the last of their 3 children has just left home. They have a debt that they want to pay off and will now have surplus cash-flow that they want to put to good use. They don’t know for sure when they want to retire but would like an understanding of what position they would be in if they were to retire at age 65.

The two priorities with their surplus cash is to clear the debt and build funds for retirement. They have the ability to build funds for retirement in a tax effective manner, by way of salary sacrifice contributions, however there are limits to the contributions they can make, so we need to find a balance between salary sacrifice for Bob and salary sacrifice for Shirley. After doing so, they still have significant savings capacity, which we can direct to the loan. We also set up a separate savings account for some home renovations they would like to do over the next 5 years. We reviewed Bob and Shirley’s superannuation to ensure they are not paying any excess fees and made sure their funds are invested in a manner that will provide them a return they will be comfortable with while not taking any additional risk then they like.

By implementing the recommended strategies, Bob and Shirley will save on tax every year and this additional saving will be added to their superannuation to fund their lifestyle in retirement. They now know they will be in a position to retire at age 65 and possibly sooner if they choose to and their loan will be paid off in under 3 years.

** Have you ever heard that people who win the lottery often go bankrupt within five years?**

Unfortunately this is quite common, mostly because people don’t know how to manage a large amount of money; they continue to handle money the only way they know how, by spending it until it’s all gone.

Tom first came to see Jenbury Financial at 18 years of age because his father had passed away and left everything to him. Fortunately, Tom is pretty switched on when it comes to money. He had already saved up and bought his first car and was saving hard for a holiday at the end of the year. While losing his dad was a tragedy, we wanted to make sure that the financial legacy left by his father would set him up for the future.

The key things we needed to address for Tom were to use the funds:

• where possible, to minimise the chance of Tom going in to debt 

• to generate income to supplement Tom’s lifestyle, now and in the future.

Tom planned to work for the next 12 months, then start a university course. We could have suggested using part of the funds to buy a house, but at that stage Tom didn’t really know where he wanted to live and didn’t want to be tied down. The funds can and should be used to fund his education (as there is no better investment) and possibly used to give him an income while he is studying, if he needs it.

While there were a range of strategies that would be beneficial for Tom, our initial recommendation was to put the money in a 12-month term deposit. This gave Tom time to think about what’s important to him and how he wants to live his life going forward.

After 12 months, Tom had made plans for the future. Funds were allocated to his education and the balance was invested in different areas. This strategy means Tom can concentrate on his education for now, knowing his money is safe and growing to help fund his future goals.

Terry is 53 and Beryl is 59. Terry earns good money and they have no debt. Over the last few years, they have built up significant assets outside of super, which is currently sitting in cash and term deposits. On top of that, Beryl has some non-super assets in the US, plus a large superannuation balance in the US, which has additional tax consequences on withdrawal. They wish to retire when Terry reaches age 65. They don’t know if that is possible and they are unsure about what to do with their cash holdings. Both pay hefty tax bills every year.

We worked with Beryl ’s Accountant, who is comfortable with the US tax laws to work out a strategy to minimise Beryl ’s taxable income and bring some of her US super to Australia to help fund their retirement. This needs to be done on a gradual basis to minimise any tax paid. We also implemented strategies with their non-super investments in Australia to move funds to their superannuation, which will also help their tax position between now and retirement and help fund their lifestyle (tax free) in retirement.

Terry and Beryl will pay less tax, build up their assets for retirement and have their money invested in a way that they are comfortable with. They also now know that they can afford to retirement when Terry reaches age 65 and possibly sooner, if they choose to.

Grace is 52. Grace’s husband has passed away and she is struggling with how to manage the finances as she has not had to worry about this in the past. Grace’s son, Chris is helping her and has Power of Attorney, as Grace cannot really manage on her own. We worked with Chris to help him invest the inheritance Grace received from her late husband, mainly from his superannuation. When Grace reaches age 56 her youngest son, who has a mental disability has to move to a home and she will lose some of her Centrelink benefits. We worked with Chris to set up a pension from Grace’s super to replace the income she will lose, but we kept it within the appropriate asset test limits to ensure she did not lose any more pension from Centrelink because her assessable assets were too high.

While Chris wants to do the best for his mum, he was out of his comfort zone. Chris relies on us to provide him support and guidance for his mum, which gives him the comfort to know he is doing the best he can for her.