Retirement can be a stressful and very hard process to come to terms with.
The best way to manage this uncertainty is to plan and understand what you can achieve prior and during retirement, and when is the right time to retire.
Height Capital is a firm believer that planning for retirement should start as early as possible. In our view this really begins from the day you start your first job, either with your employer required to make compulsory contributions toward your superannuation, or if you are building a business that you want to grow and potentially sell one day, or simply taking out insurance to provide you with cover should you no longer be able to work due to disability or illness.
Height Capital is a firm believer that planning for retirement should start as early as possible.
In our view this really begins from the day you start your first job, either with your employer required to make compulsory contributions toward your superannuation, or if you are building a business that you want to grow and potentially sell one day, or simply taking out insurance to provide you with cover should you no longer be able to work due to disability or illness.
We believe the most important step for each client is to create a plan for how you generate and maintain your wealth prior to and during retirement. Our philosophy is similar to the great words from the famous writer and philosopher, Benjamin Franklin, who said, ‘if you fail to plan, you are planning to fail’. This is a core motto of our organisation, as we believe that planning is the key to success, particularly when you are entering retirement as an employee or needing to sell your business to do so, you need to plan this carefully. This is what we see as our core service offering to our clients.
We work closely with every one of our clients to create a road map which sets them up for success in achieving their wealth and lifestyle objectives. At a high level this includes:
- A comprehensive 5-year plan for how to build and maximise wealth
- Key strategies to implement at different stages of life
- Regular reviews and an investment in education to ensure clients are fully informed of the decisions they are making
- A commitment to develop and maintain authentic partnerships with each of our clients.
To give an example of how we do this, recently we had a client come for a meeting who is turning 60 and wants to plan to retire in 5 years. Her core objective was to see how she can maintain her current lifestyle throughout retirement. This client does not currently have a substantial amount of capital and will be partially reliant on the government pension throughout retirement.
We worked through all the strategies that may be appropriate, including one that a lot of people could use but may not be aware of; the Transition to Retirement Income Stream (TRIS). The use of a Transition to Retirement Income Stream allows you to reduce your personal tax through contributing to superannuation and draw a tax-free pension. This allows you to retain your take home income but pay less tax and is effective for people over the age of 60 as the income received from your pension is tax free.
The actual process of this recommendation was:
- Salary sacrifice a specific amount of her wage to superannuation above her employers Super Guarantee contribution, thereby reducing her personal taxable income
- Draw a tax-free pension from superannuation to increase her take home wage, which is tax free as they are over the age of 60
- Retain the tax savings in superannuation to continue to grow her wealth.
In this case the client now saves $6,683 in tax per annum. This capital will be retained in superannuation to grow their wealth for retirement.
The real outcome from this strategy is not just the short-term savings of tax, but that they can now save an additional $6,683 into superannuation each year that will increase their balance at retirement (after pension payments are made).
If you would like to explore how we could assist you, please contact us for a meeting to discuss.