David and Margaret: Transforming Business Proceeds into a Thriving Investment Strategy

David and Margaret recently sold their successful business for $1.4 million. Historically, their investment strategy was limited to term deposits, providing them with safety but minimal growth. As they transitioned into retirement and semi-retirement, they sought to diversify their investments and secure a dependable income stream of $75,000
annually.

• Investment Diversification: How to effectively diversify their substantial funds beyond the safety of term deposits?
•  Income Generation: How to ensure a steady $75,000 annual income during their retirement?
• Efficient Management: How to manage and monitor their new investments without becoming overwhelmed by the complexity?

To address David and Margaret’s concerns and align with their financial goals, we implemented a strategic investment plan:

1. Establishing a Superannuation Fund: We set up a superannuation fund, leveraging the tax advantages and investing the sale proceeds into high-quality, high-yielding assets. This fund was tailored to meet their income needs while also supporting long- term growth.
2. Utilizing Small Business Rollover Concession: To maximize their retirement savings, they applied the small business rollover concession, transferring a significant portion of the sale proceeds into their superannuation fund. This approach not only increased their super balance but also offered additional tax benefits.
3. Diversified Investment Portfolio: We developed a diversified investment portfolio with a focus on generating a reliable income while mitigating risk. The portfolio was designed to provide consistent returns and support David and Margaret’s goal of drawing $75,000 annually.
4. Streamlined Income Management: Our management strategy included regular monitoring and rebalancing of their investments, ensuring that David and Margaret could rely on a steady income stream without the burden of daily financial decisions.
   The portfolio grew to more than double the initial investment amount, demonstrating the effectiveness of the strategy.
5. Tax-Efficient Drawdown Strategy: As they approached pension age, we planned for a smooth transition of their superannuation into a tax-free pension environment. For the remaining assets, we set up a jointly held investment account with a low-risk diversified portfolio to cover additional income needs and supplement their minimum pension drawdowns.

• Significant Growth: Transitioning from term deposits to a diversified investment strategy resulted in their portfolio more than doubling in value over time.
• Stable Income: David and Margaret successfully achieved their goal of a $75,000 annual income, providing them with financial stability and comfort.
• Hassle-Free Management: The active management and regular monitoring of their investments allowed them to enjoy their semi-retirement without the stress of financial management.
• Tax Efficiency: The strategic use of tax-efficient investment vehicles and planned rollovers ensured that their retirement savings were optimized for maximum benefit.