Case Studies
SMSF Comparison* Example
John & Mary have:
- A combined income of $160,000
- Their employer contributes 9.5% SGC to their super
- Their combined superannuation balance is $220,000
They plan to retire at age 65 in 15 years
Option 1 - Retail Super
- They invest into a balanced super fund with medium fees
- ASIC projection estimates they will have $450,638 when they retire
- Click here for Option 1 PDF for ASIC calculations
Option 2 - SMSF with Property Investment Analysis
- They transfer $200,000 into a SMSF
- They each leave $10,000 in their old super funds to maintain all their insurance entitlements
- They direct their employers to make their super payments to the new SMSF
- They purchase a $400,000 townhouse within their SMSF
- Borrowing $249,000 (about 63% of the value)
- Take out a 15-year loan at 6% so the property is paid off at retirement
- Property Investment Analysis at 4% growth (1% above inflation) estimates their investment property is worth $720,000 when they retire
- If they sell the property after they retire, they will pay no tax on the profit.
- In addition to the Investment Property they have accumulated about $100,000 in cash.
- Click here for Option 2 PIA calculations
In this example the Investment Property within a SMSF produces $273,000 more than the Balanced super fund; this is a 60% better outcome at retirement.
- At 3% growth (= CPI) the property is worth $623,187
- $173,000 more = 38% better outcome at retirement
- At 5% growth (recent historical average) the property is worth $831,571.
- $380,000 more = 85% better outcome at retirement
* A minimum combined superannuation balance of $220,000 is required.
Investment Property Example
Michael & Julie
- $775,000 Home Loan with Big 4 Bank costing $3,200/month
- 30 Year loan
- $29,000 Car Loan costing $400/month
- 5 year loan
- Client 1 on $180,000 a year
- Client 2 on job keeper
Phoenix Mortgage Consultants
1. Refinance and roll car loan into home loan at 2.2% – 2.4%
- Saving $550/month
- Reduces loan term by 6 years
- Now 24 year loan
Phoenix Property Consultants & Phoenix Mortgage Consultants working together
2. Use Equity in Home for cost and deposit loan (interest only) for Residential Investment Property
3. Borrow 80% against Investment Property (interest only)
- Note split loans (a bank would never do this)
- Note interest only loan to maximise cash flow and allow home loan to be paid off sooner
Phoenix Property Consultants
4. Select a property specifically matched to the clients personal financial circumstances
5. Structure the property, loan, ownership, depreciation, rent yield to maximise income and minimise tax
- Investment Property is Cash Flow positive by about $10,000 a year from day one
- Reduce loan term by another 6 years
- Now 18 year loan
Phoenix Property Consultants & Phoenix Mortgage Consultants working together
6. Client saves $400,000 in repayments (12 years at $3,000 a month)!
7. Client has created additional equity of $500,000 in the Investment Property over 20 years
8. Client is $900,000 better off with no additional outlay!
