Early advice made all the difference – a story

What to do with the family home when entering aged care?
March 31, 2016
Australia’s unclaimed money in 2016 = $1.2 billion dollars
April 7, 2016

Margaret was 21 when she married Graham. She was working as a sales assistant in a large department store when they decided to start a family.

As her pregnancy advanced Margaret gave up work and Graham, a warehouse fork-lift driver, took a second job to make up the shortfall in their income. He was a hard worker and fast learner which prompted his boss to promote Graham to Warehouse Manager a few months later.

In the years after their first son was born, two more babies arrived – another boy and a girl. Once the children were settled at school, Margaret returned to part-time work.

Soon after they’d married, Graham engaged a financial planner to structure an insurance and savings strategy. With their planner’s ongoing guidance, the young couple was able to afford annual holidays, private school fees and put aside cash for unexpected events.

Years passed and the children grew up and left home. Graham was now a partner in the warehousing business and earning a good income. So when Margaret turned 50, she decided to take early retirement.

They were living comfortably on Graham’s salary when he suffered a heart-attack. He was rushed to hospital but died shortly after.

Margaret knew that Graham had insurance policies and that there were investments and superannuation, but other than relying on their bank account balance to pay household bills, she’d had little other involvement; happily leaving that to Graham and their financial planner.

Over the years, their financial planner had become a family friend, and it was to her planner that Margaret now turned.

Her financial planner took care of the insurance claims and organised for Graham’s superannuation to be paid out. She recommended Margaret pay off the remainder of the mortgage.

After considering insurances, superannuation and the investment portfolio, Margaret discovered that she’d been well provided for but she had no idea what to do with her money. She didn’t know what the tax implications would be and was worried about having a regular income.

Her financial planner’s next task was to define Margaret’s needs and level of risk tolerance. She addressed Margaret’s tax situation and structured a portfolio to provide an income stream for her to live off.

When Margaret turned 55, her planner advised that her own superannuation was accessible. She reviewed her investments to maximise Margaret’s income potential and minimise her tax liability.

Margaret and Graham had dreamed of retiring at the beach so she sold the family home and bought a comfortable beachside apartment. Downsizing freed additional cash so Margaret, now 65 and financially secure, asked her planner to open investment accounts for each of her four grandchildren.

To celebrate Margaret’s 70th birthday, she decided to take a cruise with a dear friend. her planner arranged a partial redemption from the most appropriate of her investments so she was able to holiday in style.

Although Margaret had been widowed unexpectedly, early planning and good advice enabled her to maintain an enjoyable lifestyle in retirement. Graham would definitely be resting in peace.

Ursula Boorman
Ursula Boorman
Ursula Boorman holds a Bachelor of Economics degree, a Diploma of Financial Planning and is a Certified Financial Planner. She has worked in banking and financial services since 1988. Ursula is particularly skilled in developing the financial strategies that enable clients to achieve their goals through her understanding of the way that superannuation, taxation and social security legislation interact with each other. Ursula is passionate about giving clients the confidence they need to take control of their financial situation and provides strategies to help them plan for their future.