Client Profile: Neil Hartley
I started my own Self Managed Superannuation Fund back in February 2012 and I think it is the best financial decision I have ever made.
The connection with GFM goes back over 30 years to November 1983, when they convinced me to start up a new superannuation plan with a monthly contribution of $80. I was 28 at the time and $80 seemed like a lot, but my superannuation contribution was tax deductible and I would save about $25 a month in tax, so my net outlay was only about $55 a month.
I am amazed to think that GFM had still kept all the records from 1983 and he recently showed me the original proposal where they estimated my retirement benefit at age 60 would be $565,000. Well I am pleased to say that I am not quite 60 yet and my SMSF balance is comfortably in excess of that figure.
I work for Goodyear Dunlop Tyres. Having started with them in Melbourne more than 35 years ago I have had a number of different roles starting as a tyre fitter through to various management positions and I’m currently the Training Manager for Queensland. The job moved me to Canberra in 1986 and then onto Brisbane in 1993, and our three children grew up in Brisbane.
My wife, Sally, tragically died in September 2000, at the time our three children were only 9, 10 and 12. My boss & senior management were very supportive and allowed me to change my working hours to part-time which gave me greater flexibility to look after the three children. It also meant that some of my superannuation plans had to be put on hold for a while.
My children have now grown up and are independent young adults. I have been back working on a full time basis for a number of years now, allowing me to concentrate more on building my own long term financial security.
Back when I started the superannuation plan in 1983, I didn’t understand much about super or investments, but it seemed like a good idea at the time and I am very glad that I was convinced to make a start.
Through the big 2 moves to Canberra (1986) and Brisbane (1993), GFM diligently “stayed on the case” and about 4 or 5 years ago, brought up the subject of an SMSF.
Initially I was quite hesitant, because I really didn’t understand what was involved and not having a great understanding of superannuation, investments or the tax system, I thought it might have been just a little bit too complicated.
I really didn’t see any value at the time, but the “defining moment” came when GFM explained the relatively high level of tax I was paying on some term deposits I had invested and that this money would be better suited in an SMSF and being over age 55, I could start a “Transition to Retirement” pension and pay no tax on investment earnings.
I had a good amount of money saved in term deposits in the bank, but it was annoying me, because I was paying a hefty amount of tax on the interest that I earned and GFM worked out for the year ending June 2011, I paid $3,262 in tax just on the interest. I was also in a position where I was about to receive an inheritance of $180,000 and it was easy to see that putting this in the bank wasn’t the right move.
So we started setting up an SMSF, which began in February 2012 and it was made quite clear to me that boosting my salary sacrifice superannuation contributions up to the $25,000 limit and commencing a “Transition to Retirement” pension at the same time would provide substantial benefits.
In fact as a result of the strategies undertaken, it was estimated that the first year tax savings alone would be $11,200 and I think he is absolutely correct. For the 2012/13 financial year, the taxable income to my superannuation fund was $35,390, but I now understand fully that because I am in the pension phase I pay zero tax on the fund earnings. And the pension income that I take out of the fund more than covers the drop in take home pay as a result of my salary sacrifice arrangement. Just a brilliant result.
What I admire most about GFM is their commitment to the client relationship. GFM does a full review of my fund with me, twice a year in Brisbane and I just love the online access, I look up my portfolio 2 or 3 times a week.
I always thought that my long term financial security was important and I really only had a basic understanding of investments and superannuation and I just appreciate the fact that GFM are just so good at what they do.