Making retirement their business

Switched-on importers leverage professional advice to minimise risk and transition to a well-earned, comfortable retirement.

Peter and Beth are now aged 60 and run a highly successful wholesale import business, with over 100 employees and own premises in two cities.

They were originally referred to FB Wealth Management by their new accountant, who had noticed that they had almost no superannuation, no insurance despite over $2 million in debt, and had no real plans for retirement.

Their financial situation was very strong, but was almost entirely reliant on the continued success of the business – business value, business property and stock.  Their accountant had therefore advised them to look at ways to diversify their wealth.

That was over 10 years ago, and in that time, in collaboration with their accountants and a very astute legal firm, there have been many very positive outcomes.

  • Initially, we reduced business risk through the use of key person insurance.
  • We encouraged Peter and Beth to identify some personal goals, in particular whether either or both wanted to fully retire, gradually retire i.e. part-time, or simply continue indefinitely.
  • Their accountant and lawyer established a long-term business plan which involved providing equity to three key employees.
  • We agreed upon a solid savings program, taking advantage of the maximum superannuation contribution limits. At that time, a tax deduction of $10,000 was available for each of them, and resulted in a very substantial tax saving, as well as immediate boost to their retirement savings.
  • Once Peter and Beth were convinced of the diversification and taxation benefits of superannuation, they embraced it fully and since that time they have always maximised their tax deductible contributions.
  • In addition, they have been able to take advantage of small business concessions to eliminate or reduce tax on capital gains as they have gradually sold down their business interests.
  • Their superannuation portfolio is protected from creditors, thereby further reducing business risk, and has provided excellent, low-taxed returns, despite initially enduring the Global Financial Crisis. It now represents almost 50% of their household wealth.

Peter and Beth will retain a 20% passive interest in the business and are looking forward to a very comfortable retirement.