Case studies

Preparing for retirement

Client

A couple, both 61 with their home and super as major assets wanted to look at strategies to boost retirement funding and reduce tax. Both hoped to retire at 65 so planning had to take this limited time frame into account. Their super was really the only asset available to provide them an income in retirement, apart from government support.

Solution

Using tax benefits available to Australians aged 60 and above, their Aon Hewitt Financial adviser converted their superannuation funds into 'transition to retirement' pensions to enable them to draw an income (paid to them tax free). Investment earnings on the pension fund also became tax free. Part of this strategy involved replacing the tax free pension income by salary sacrificing back into super, which reduced their overall personal income tax.

Results

With an understanding of their clients' concerns and time frames, the Aon Hewitt Financial adviser was able to implement a strategy to boost the clients' contributions to super and potentially improve their final retirement savings. This strategy also reduced the amount of personal tax the couple would pay over the coming four years while in employment.


 
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