Planning to Retire
Elizabeth is looking forward to retirement and being mortgage free at such time after almost 45 years of service in the teaching profession.
Until she sought advice, she was paying up to 60% of her fortnightly take home pay towards her mortgage so as to fulfil her key objective of being mortgage free at retirement.
In doing so, Elizabeth was paying a significant amount of PAYG income tax before making any payments towards her mortgage.
Whilst she felt she was on track in this regards, Elizabeth nonetheless sought retirement planning advice with Palladium Wealth Partners for peace of mind.
Upon meeting with Elizabeth, we understood and concurred with her objectives, yet felt that it could be done in a more tax effective manner.
We made Elizabeth aware of strategies relating to transiting to retirement coupled with salary sacrifice and how to indirectly pay her mortgage via her superannuation.
We recommended Elizabeth rollover a portion of her accumulated superannuation and draw the maximum 10% as a transition to retirement income stream.
The income stream would be tax free non assessable given her age of being over 60 years of age.
Coupled with a strategy to salary sacrifice a portion of her pre-tax income, Elizabeth was able to retain a similar amount of post-tax income yet save near on $7,200 of PAYG income tax per annum.
Given Elizabeth wanted to ensure whatever she contributed to superannuation would be there as to pay her mortgage within a couple of years, we recommended she redirect the salary sacrificed amount into a cash like investment option with minimal investment risk.
This is, we explained an indirect way to pay her mortgage with the peace of mind of knowing that she would achieve her objective more tax effectively.
By seeking advice from us at Palladium Wealth Partners, Elizabeth was better able to understand all her options and make a more informed decision as to choose the right strategy for her.
The advice helped Elizabeth maximise her cash flow today, legitimately minimise her income tax and accumulate a higher amount of retirement capital to the tune of $45,000 for her future – irrespective of investment market performance.