Case Study - Retirees (Brad & June).
Background
Bradley and June, a retired husband and wife who were formerly business owners, have been valued, long-term clients of the Wealth Effect Group. Their initial engagement with us was precipitated by their acquisition of a substantial stake in a small business. When presented with a lucrative offer to sell their business, they sought our guidance on the sale process and their retirement planning.
Overview
Over a decade ago, Bradley and June sought the expertise of the Wealth Effect Group team to tailor a personal insurance solution and streamline their various superannuation funds into individualized retail offerings.
Upon their acquisition of a 50% share in a small business, we embarked on a journey to uncover and articulate their long-term vision for this new endeavor. Their unwavering commitment to expanding the business's profitability and making it a marketable asset in the future prompted us to act as their central coordinators. We facilitated connections with an accountant and business coach from our trusted network of associates, specializing in business development.
As part of Wealth Effect Group's enduring financial planning approach, we provided strategic counsel to safeguard and grow Brad and June's assets over the long term. Moreover, we implemented a tailored business insurance solution designed to mitigate risks within the business, including insuring key partners and establishing a buy-out plan in the event of partner disability or demise.
Subsequently, as Brad and June's small business flourished and an attractive offer materialized for its acquisition, their financial focus swiftly shifted from asset accumulation to personalized retirement planning based on their newfound financial status.
Our Process
In close collaboration with their accountant, our advisers introduced Bradley and June to the Small Business Roll-Over Legislation, which allows business owners to roll over $500,000 into their superannuation funds, consequently reducing their capital gains tax liability to zero. This invaluable insight enabled them to sell their business stake without incurring capital gains tax.
We hold accreditation as SMSF Advisers, positioning us effectively to guide Bradley and June in selecting the most suitable platforms for managing their retirement savings. After a careful evaluation of their options, the couple elected to establish a Self-Managed Superannuation Fund (SMSF) as their preferred retirement investment vehicle.
The sale of their business marked the conclusion of Brad and June's tenure as full-time salaried employees. They now faced the challenge of generating retirement income from their accumulated wealth. Our team conducted a thorough asset assessment, leading us to propose a strategy of making non-concessional contributions to their superannuation funds, leveraging the surplus proceeds from the business sale, with a view to preserving their wealth within a tax-efficient environment.
We also worked closely with Bradley and June to discern their post-full-time employment lifestyle aspirations, a process that identified their need for a regular income stream, especially for their anticipated overseas travels, given their family ties abroad. To fulfill this requirement, we recommended they commence pensions within their SMSF.
Concerns about the management of their newfound wealth prompted Bradley and June to seek guidance. Previously accustomed to a high degree of control through their business, they now desired an understanding of various investment options. Our collaboration with them to ascertain their risk tolerance allowed us to educate them on diversified investment choices.
The Outcome
Bradley and June have transitioned successfully into semi-retirement, enjoying a comfortable income, frequent travel, and their desired lifestyle, thanks to the guidance and support provided by the Wealth Effect Group team. We facilitated their transition into retirement by establishing a pension within their SMSF and eliciting their preferences regarding investment comfort levels. They expressed a desire for a stable income stream, coupled with long-term financial growth and a limited exposure to high-risk investments.
In response to these objectives, our team devised a bespoke investment strategy, encompassing a diversified portfolio featuring Australian and international shares, domestic and international property, infrastructure, and a blend of fixed interest and cash. Additionally, we orchestrated a customized investment protection strategy aimed at minimizing potential capital losses on the equity portion of their portfolio.
Considering their newfound wealth, we initiated a comprehensive review of their estate plan, which revealed the need for updates to their Wills, Enduring Powers of Attorney, and Advanced Health Directives.
In Bradley's words
"The Wealth Effect Group team provided us with efficient and highly professional guidance. We placed absolute trust in them, confident that we were in the hands of experts."
"Selling our business was one of the best decisions we've made, and Wealth Effect Group played a significant role in showing us efficient ways to manage our newfound wealth."
"I wholeheartedly recommend Wealth Effect Group, and I've already referred some of my business associates to them."
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