Their Challenges
Mr and Mrs K came to us for a couple of reasons:
- Kids about to finish private school – and expected some more disposable income soon.
- Expecting an inheritance – their parents in their late 60’s had just received an inheritance and our clients were lucky enough to receive a portion of this.
- Expecting a Payrise - Mrs K was about to return to work after taking a career break to study – again assisting them with their disposable income.
- Tax Planning – after a number of promotions over the years, their incomes had increased and they felt they weren’t being proactive in managing their income tax.
How We Helped
After getting a comprehensive understanding of their financial goals, risk tolerance and cashflow we set about a simple but comprehensive plan for them.
It all starts with cashflow. Per our earlier examples we set-up a simple strategy to help them pay off their mortgage within the next 5 years, not overspend on holidays, keep a sufficient amount aside for emergencies and put the balance of their cashflow to work with extra contributions to super and other investments.
They were both fortunate enough to have some life and income insurance that their employers paid for which we retained and supplemented with separate Income protection to take them both out to age 65, and a modest amount of Trauma cover which they did not previously hold.
Super – their default funds had them ratcheting into more conservative investments already. With 15 years of working life remaining we made some adjustments to make sure their super providers and investments matches their goals so that we could maximise their balances for retirement.
Investment strategy – Foundations for part-time work – Mr K wanted to be able to cut back to part time work in his mid 50’s so it was important that their investments would be cashflow positive by this time. We discussed using their incomes to sustain their living costs while they still worked into their mid 60’s before starting to draw down on their super in retirement. They also wanted to be able to help their kids with a house deposit so we made sure they had enough of a buffer to be able to do this without compromising their own retirement savings.
This case study is illustrative only and is not an estimate of investment returns you will receive or fees and costs you will incur.
