Case study: High earners near retirement aim for six-figure income and tax-free inheritance

Transcript

John and Helen are planning to retire in the next few years, and they’re ready to get stuck into making a detailed retirement plan. Helen is currently 60 and earning an income of $90,000 per year. She has $850,000 in her super account. John is a little older at 62, and he’s earning $200,000 per year. His super balance is $950,000.

The couple don’t have investment assets outside superannuation because they focused in the last few years on contributing any savings outside the system into super to maximise their tax-effective retirement income. They’ve also focused on boosting Helen’s balance, given that she’s a lower income earner, to make sure that they’re both on a more level playing field at the time of retirement. They currently have a home mortgage that they expect to have repaid by the time John retires, and they’re both maximising their salary sacrifice to super within the contribution limit that applies.

When the time comes to apply for age pension, Helen and John expect that they will declare $80,000 of assets outside of their superannuation savings. That’s higher than most people declare, but takes into account that they have good quality cars and home contents that would fetch a good price on the second-hand market.