Long holidays are once again just around the corner. We know that you have been waiting for this for a long time! But, let’s hope, there is plenty in the kitty. With a little help and some guidance from Initiative, you can be sure that you are on the right track with access to a solid income for the rest of your life.
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Our Clients' Success Story
Our clients, Graham and Caroline we’re approaching retirement without any clear vision or direction; they approached us to ensure they had the correct structures and investments in preparation for their retirement.
Graham and Caroline had successfully accumulated quality assets throughout their working life for their retirement; they wanted to minimise the amount of tax they are required to pay, both now and in the future. They require an ongoing income of $60,000 per annum. They also want to maintain control and transparency on all their investments.
As part of their retirement strategy we commenced a Self-Managed Super Fund (SMSF) and transferred investment assets held personally into the SMSF by maximising non-concessional super contributions. The commencement of account based pensions provided Graham and Caroline with a tax free source of retirement income ($60,000 per annum), in which the fund pays no CGT or tax on investment earnings on investments being used to fund payment of the pension.
In addition by updating their estate plan this will ensure their assets are distributed according to Graham and Caroline’s wishes in the event of their death or incapacity.
Taking into account their investment goals, we developed a strategy and defined investment process to suit their needs. Our CARE Investment Process allows for funds to be allocated and take into consideration the clients’ risk profile and market volatility.
Following is a brief summary of the CARE Investment Process we implemented for Graham and Caroline:
CORE: up to 60% of their portfolio. Investments selected to suit Graham and Caroline’s time frame and risk profile. Generally held for long term and rarely sold.
ACTIVE: up to 25% of their portfolio. Investments selected to target a long term return, investments may be bought and sold depending on market conditions and returns.
RESERVES: low volatility investments set aside to meet their next 4 years’ income needs.
ENHANCED RETURNS: up to 25% of their portfolio. These investments are higher risk than Core and targeting a higher return.
We continue to review Graham and Caroline’s financial plan on a regular basis to ensure it remains accurate and continues to meet their retirement needs.