Investing your Inheritance
What should you do with your Inheritance?
Joan and Neville's story*
Neville* inherited over $790,000 following the death of his mother and wanted advice regarding their retirement plans.
Joan was 60 years old and Neville was 62 years old. Both were in full time employment, however wanted to retire in three years time Neville reached 65.
They owned their own home and had $840,000 in their bank account (incl. the inheritance money). Neville's superannuation was substantially higher than Joan's with balances of $450,000 and $120,000 respectively.
Their ultimate goal was to ensure that they could achieve an after tax income of $70,000 in retirement, however wanted the flexibility to retire earlier should they choose to do so.
Additionally, they wanted to complete some renovations of the home that they estimated would cost approx. $65,000.
After analysing their current income and household expenditure requirements, we gave advice to Joan to organise a salary sacrifice arrangement with her employer contribute up to her Concession Contribution cap of $35,000 per annum for the next three years. We also advised that as they had not used any of their Non-Concessional Caps, to contribute $540,000 into Joan's super from the bank account using the three year bring forward rule, and to contribute $180,000 as a Non Concessional Contribution into Neville's super.
Following the advice, they had enough money to comfortably and complete the home renovation. We estimated that if they retired when Neville turned 65 they could turn their respective supers into an Account Based Pension and draw a combined minimum income of approx. $75,000 per annum...which more than met their retirement goals.
* Names have been changed to protect client privacy.
What to do next:
If you want us to help you make the most of your inheritance, contact us today on 03 8394 0300 or email us at email@example.com to organise a time to discuss your needs with one of our Certified Financial PlannersTM.
Using a testamentary trust to protect assets and distribute income tax effectively