Marlene: Navigating Retirement with Confidence and Security

Marlene, a 66-year-old widow, inherited a superannuation balance of $750,000 following the passing of her spouse. She owns a family home valued at $1.1 million, which she is not willing to sell, and has $50,000 in the bank with no other significant assets. As she looks towards her future, Marlene is concerned about how to effectively invest her inheritance, ensure it lasts throughout her retirement, and manage her financial needs.

• Investment Strategy: What should she do with her inherited funds to ensure they are invested wisely?
• Longevity of Funds: Will her inheritance last until she reaches age 90?
• Income Needs: How can she generate a reliable income throughout her retirement?

To address Marlene’s concerns and meet her retirement needs, we developed a tailored strategy:

1. Income Strategy: We recommended a Lifstage income approach, which involves drawing $65,000 annually from her superannuation until age 75, and then reducing the annual drawdown to $52,000 thereafter. This strategy ensures a steady income flow that aligns with her changing needs over time.
2. Age Pension Planning: We incorporated the potential for future Age Pension benefits into her plan. This will supplement her income and provide additional financial security as she ages.
3. Recontribution Strategy: To mitigate potential estate tax liabilities for her adult children, we advised implementing a recontribution strategy. This involves withdrawing a portion of her superannuation and recontributing it baack into a tax- advantaged account, effectively reducing the estate tax burden and preserving more wealth for her heirs.

• Sustainable Income: Marlene’s income strategy ensures a consistent annual income of $65,000 initially, tapering to $52,000 at age 75, allowing her to comfortably meet her financial needs throughout retirement.
• Future Security: By planning for future Age Pension benefits, Marlene secures additional financial support, enhancing her overall retirement stability.
• Tax-Efficient Estate Planning: The recontribution strategy reduces the potential estate tax impact, maximizing the inheritance left to her children.
• Peace of Mind: With a clear and strategic plan in place, Marlene can enjoy her retirement knowing her finances are well-managed and will last until she reaches age 90.