Strategic Tax and Financial Planning for a Retiree Downsizing Her Home | Case Study
About the Client
Monica, a 79-year-old widow, lives in an unencumbered home in Croydon Park, Sydney. Her income is primarily derived from her late husband’s Commonwealth superannuation pension and the Government age pension.
She approached SaabTeece to complete her income tax return. During our comprehensive review process, it became clear that Monica had plans to auction her Sydney home and relocate to an over-50s lifestyle community on the Sunshine Coast, Queensland, to be closer to her daughter
The Challenge
Monica anticipated selling her Croydon Park property for approximately $1.7 million and was considering purchasing a new home for around $900,000.
While the sale of her principal place of residence is exempt from capital gains tax, the surplus funds from the sale were likely to impact her eligibility for the age pension. Additionally, being over 55 and not currently holding any superannuation presented a time-sensitive opportunity to consider a downsizer contribution into superannuation.
Our Approach
After completing her 2023 tax return, the SaabTeece team referred her to our trusted partners at ST Wealth, licensed financial advisers and wealth management specialists. The ST Wealth team worked quickly and devised a strategic financial plan tailored to Monica’s situation to help her:
- Maintain and maximise her age pension entitlements.
- Position her assets in a tax-effective and income-generating manner.
- Ensure ongoing access to funds for lifestyle and peace of mind.
Tailored Solutions Provided
- Downsizer Contribution into Superannuation
Enabled Monica to transfer funds into a tax-effective environment, reducing her tax liability to 0% on investment earnings. - Annuity Investment
Introduced an annuity to boost Centrelink benefits, as only two-thirds of annuity investments are counted under the asset and income tests. - Smart Investment Strategy
Funds not required for immediate use were allocated to a diversified portfolio designed to generate income while protecting against inflation. - Centrelink Strategy and Gifting Opportunities
Leveraged allowable gifting rules and Centrelink strategies to optimise her age pension entitlements. - Transition to Pension Phase
Superannuation was rolled over into pension phase to benefit from tax-free investment earnings. - Preserved Access to Cash
Ensured Monica retained access to sufficient liquid funds for personal needs. - Term Deposit for Short-Term Cash Needs
A portion of funds required within the next 12 months was placed in a term deposit— providing guaranteed returns and peace of mind.
Outcome
Monica was able to proceed with her move to the Sunshine Coast, confident in her financial
future. Through the integrated expertise of SaabTeece and ST Wealth, she achieved:
- Financial peace of mind.
- Improved Centrelink outcomes.
- Tax-effective investment positioning.
- Access to capital when needed.
LEGAL WARNING
This case study provided here is intended for general informational purposes only. It is not intended as legal, financial, or professional advice specific to your individual circumstances. The information presented in this case study is of a general nature and may not apply to your unique situation.
We strongly advise that you seek advice tailored to your particular needs and circumstances. Your specific situation may not be adequately addressed by the general information contained in this case study.
Any actions or decisions taken based on the information in this case study are solely at your own risk. Our accounting firm, its employees, and representatives shall not be held responsible for any consequences resulting from your reliance on this case study without seeking individualised professional advice.
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