We understand that superannuation can be difficult for people to understand and manage. With so many legislative changes since super was made compulsory in 1992 and with the expectation of continuing changes ahead, we understand that it can be hard to comprehend what you should actually be doing with your super and retirement savings, now and into the future.
At Mark Farmer Financial Solutions we are superannuation and retirement experts. We understand the complexities of superannuation and the concerns people feel when facing retirement and planning for the years ahead. We use basic concepts to help our clients increase their financial intelligence. We believe that if we support clients with the skills and knowledge that they require when it comes to superannuation, then they will be better able to understand investment concepts and make more informed decisions in the future.
Case studies. You don’t know what you don’t know!
1) The situation:
A client came to us having received a $75,000 excess contribution tax bill from the ATO that they were ordered to pay immediately. This was triggered by an employer making a contribution that was just $300 over the allowable limit.
The strategy: After a lot of research an employment agreement was located from the mid 1980’s. It was discovered this agreement did not distinguish between taxable and tax free contributions so we drafted an application, and provided a large body of evidence to the ATO, to have this overturned.
The result: Even though it only happens on rare occasions, the ATO accepted that the tax was applied incorrectly and returned the $75,000 to our client.
2) The situation:
Sadly, a client’s husband (aged 48) is terminally ill and is paid out over $1 million in life insurance.
The strategy: Some time critical advice and implementation over a 3 day period enabled the client’s husband to contribute $450,000 into superannuation and begin an allocated pension income stream under a ‘permanent incapacity ruling’.
The result: Even though the client was 47, she inherits a tax free income stream from the $450,000 allocated pension as we set her up as the reversionary beneficiary. The overall income tax position going forward remains nil, even though she has over $1 million in financial assets that provide an income of over $50,000 per year.
