When our life circumstances change it is not unusual to feel out of your comfort zone, unsure of your path forward, or even overwhelmed. A delightful single man called Mark came to see us recently seeking advice after losing both of his elderly parents in close succession. Mark is in his 60s and has had a successful career in the public sector. He was trying to work out how to maximise his investment portfolio of shares and property, and his inheritance, to put him in the strongest position for retirement.
Mark had been doing some deep thinking about how he really wanted to live his life. Covid and losing his parents had given him a different perspective on what was important. He had decided that now was the time to fulfill his dream of moving to the NSW North Coast to build his dream home. It was very important to him to have a property that would suit his beloved dog, Ruby so apartment living did not appeal.
Mark had a mortgage free home in inner city Brisbane, an investment property and a considerable superannuation balance. He was wanting to know if it would be possible to retain those assets and still afford the move.
We worked with him on a series of projected outcomes that would account for all of the expenses associated with his move and his new coastal lifestyle. It soon became apparent that he was not really aware of the value of his assets and that he was actually in a much stronger position that he thought he was.
Mark was very much hoping he could retain his inner-city property to use as a base when he returned to Brisbane. He wasn’t keen on the idea of renting it out so wanted to know if he could afford to keep it vacant. He was very happy with the arrangement he had with his long-term tenants in his investment property so wanted to keep this in place for the moment, as it was providing a considerable passive income. His thought was that he may change this arrangement when he retired.
With all of Mark’s goals in mind we were able to build a plan of attack. To reduce the long-term impact the large capital expense of building a new home would have on his retirement savings we looked into short-term borrowing solutions. Due to the current low interest environment this seemed preferable to tapping into the earning potential of his super and investments. We also came up with a series of tax minimisation strategies and a plan to stage property sales post retirement to provide a capital injection and relinquish the debt. Allowance was also made for an income to cover his living expenses.
“Sometimes you don’t realise what’s really important until a life changing event occurs. I was too caught up in the day to day of life and work to see, I had little time for myself and the things I truly wanted to do. This plan has brought forward my retirement. I am truly excited about the next chapter’’”
Mark now has a renewed focus and plan for moving forward in this new stage of his life and has been pleasantly surprised to discover just how robust his finances are. He has worked hard, lived frugally and invested wisely. He just needed some guidance and strategic advice to help with his retirement planning. As we like to say, you work hard, and your money should too. We were able to help him cut through the complexities.
Are you at a crossroad in your life? It is always prudent to review your financial plan when your circumstances change.
General Advice Warning
The information provided in this article is general in nature and does not take into account your particular investment objectives, financial situation or insurance needs; we therefore recommend you seek advice tailored to your individual circumstances before making any specific decisions.
Dobbrick Financial Services (Gympie) Pty Ltd ABN 48 931 205 109 and DFS (Ipswich) Pty Ltd ABN 86 100 184 521 & DFS Oakland ABN 64 340 527 395 and their advisers are authorised representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306.
