Case Studies

Luke is 33 years old and currently has his super in a retail fund. He earns $90,000 a year and only makes his standard Superannuation Guarantee contributions from his employer. His current balance is $45,000 invested in a balanced portfolio. If Luke wishes to retire when he turns 65 he would retire with approximately $366,000 by using the ASIC Superannuation Calculator. This would only give him a retirement income of $21,500 per year based on his life expectancy. If Luke started salary sacrificing $5,000 a year now from his employer and can contribute an additional $1,000 a year [...]

Luke is now 50 and has a balance of $315,000 plus his recent non-concessional contribution giving him a total balance of $495,000. He would like to take a bit more control of his super and after speaking to a financial advisor decides to set up his own SMSF. He currently has life insurance in his retail fund so his advisor recommends he keep a small balance in there to support any life insurance premiums or consider rolling the policy into the new SMSF. If he were to completely roll out of his retail fund his life insurance would be [...]

Technology has come a long way in recent years. After Luke sets up his SMSF with his accountant they advise him of the benefits of having his fund as automated as possible. These include (but not limited to): No more searching for lost statements Future reduction in administration fees Timely information regarding bank transactions Timely information regarding share trading Luke completes the relevant authorities for his bank account and share trading account. Within a few days Luke is able to see his current bank balance and shareholding balance including the market values on that day. As a result he [...]

John and Lucy heard from a friend that they can own property within an SMSF. After seeking financial advice they decide that a property investment suits their needs so they set up an SMSF and rolled over $350,000 from their retail funds. The property they find is a residential property and is on the market for $600,000. They do not have enough in their fund to make this purchase but after seeking further advice are informed that they can borrow within their super under a limited recourse borrowing arrangement. In order to do this however they must set up a [...]

Emily is about to turn 60 years old and is thinking of retiring. She heard that she could commence a tax free pension from her super fund from the age of 60. Her current pension balance is $550,000 and is held in a self-managed superannuation fund (SMSF) to which she and her brother are the members and trustees. Emily wrote to the trustees as a member of the fund requesting she be paid a pension from her 60th birthday on the 1 March 2017 and advised them of her pending retirement. The trustees then responded to the member confirming [...]

Emily is under the age of 65 and owns a commercial property with her brother worth $580,000. After much discussion and personal capital gains tax consideration Emily and her brother decide they would like to hold the property in super. As they are both under 65 they can contribute up to their non-concessional contribution cap with the option to bring forward the next 2 years using the “bring forward rule”. After engaging a lawyer and their advisor Emily and her brother contribute their property in-specie to super by preparing transfer documents and applying for the stamp duty [...]

Now that Emily is retired she needs to consider what other steps the trustees should be taking to ensure the continuation and management of their fund. Every year the trustees advise Emily of her minimum pension which Emily must draw to continue the tax concessions of pension phase. After a review of the fund documents with her accountant Emily decides to take action regarding her estate planning. She consults a lawyer and drafts up her Will. After nominating her son as Executor of her estate she is aware that upon her death he will be appointed trustee alongside her brother. [...]