Solid relationship ensures a positive result


Case Study

The current situation.
Our clients Shane & Peggy are married and both retired.  They have been clients for around 5 years.  Next year Shane turns 65 and Peggy is currently 60 – both Shane and Peggy are permanently retired.  Shane has a number of health issues and he is keen to explore options that may entitle him to an Age Pension when he turns 65 for the benefit of the Health Care Card so even $1 of pension would be of great benefit.  However, Shane is feeling that he is about to be “punished” for being such a good saver during his working career and putting money away into his superannuation fund as his assets now exceed his ability to obtain any form of pension and therefore any Health Care Benefits.

Shane & Peggy have been utilising the services of the McMahon Osborne Wealth Management team to invest their superannuation and each year undertake an annual review of their financial position.  In the most recent discussion Shane and Peggy discussed their concern and were resigned to the fact that they had no options regarding the pension.  However, as part of the ongoing service we asked if they would like us to explore any options available and they agreed but remained sceptical of what may pan out.

What we did.
Given there is an age difference of around 4 years between Shane & Peggy we created a plan that combined a re-contribution strategy and re-balancing strategy for the assets of Shane & Peggy.  This meant withdrawing part of Shane’s superannuation out of their SMSF to the joint bank account of Shane & Peggy and then contributing that money back into their SMSF from the joint bank account of Shane & Peggy, but as a contribution on behalf of Peggy.

The funds in Peggy’s superannuation account were left as an “Accumulation Account” which is excluded from the assets test for the age pension for residents under the age of 65.  This meant that the total assets assessed by Centrelink were reduced by around $300,000 when the eligibility for Age Pension is tested.

The result.
Whilst Shane was really only after $1 of pension so he could avail himself to the benefits of a Health Care Card, this strategy implementation meant that over the next five years the following benefits are now a reality:

· Shane will receive a Health Care Card from the age of 65 to reduce the costs associated with his long standing health issues

· On current estimates, Shane will receive pension payments of $91,466 over the next 5 years

By considering the whole picture of the personal circumstances of Shane & Peggy as part of an annual review, this opportunity became available with the difference in ages between spouses being the key that unlocked such huge potential.  This is an example of why Wealth Management and Financial Planning should never be a one off transaction – it was the ongoing relationship and review that brought up the problem and concern and then gave the opportunity.

If you would like to learn more about your options for a successful retirement register your interest for our FREE “Is your retirement plan measuring up?” seminar, where we will discuss this topic and more.

When: Thursday 16th February 2017
Where: Sunbury Football Club
Time: 7.30am
Cost: FREE
Register your interest NOW


General advice disclaimer – General advice warning: The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.

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