Client Success #21: Paying Off the Mortgage Without Emptying Super
Projected super at retirement: Approx. $160,000
We met a man who had reached preservation age and wanted his $296,000 mortgage gone, and his plan was to take all his super as a lump sum to clear it. We took the time to understand what that would leave him with in retirement, and his concerns about his Centrelink income. Instead, he’s projected to be mortgage free within five years and keep about $160,000 in super.
Client Snapshot
- Had reached preservation age
- A home loan of $296,000
- Receiving Centrelink payments
Their Goals
- Pay off the mortgage
- Keep as much super as he could for retirement
The Challenges
- His plan was to withdraw all his super as a lump sum
- Taking about $300,000 out was projected to leave about $11,000 by 67
- He was concerned about what the change could mean for his Centrelink income
Our Strategy
- Moved his super to a lower-cost fund with a stronger investment structure
- Set up a retirement income stream of about $28,000 a year instead
- Directed that income into extra repayments on the mortgage
The Outcome
He’s projected to have the mortgage fully paid off within five years and to keep about $160,000 in super at retirement, rather than about $11,000.
- Projected super at retirement
- Approx. $160,000
- Projected under the lump-sum plan
- About $11,000 at 67
- Mortgage projected to be paid off within
- Five years
- Retirement income stream
- About $28,000 a year
- Super fees reduced (more than half)
- $1,314 a year
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