Protecting your Retirement and your Grandchildren

Sometimes it pays to think outside the square when wondering how you can help your adult children and at the same time protect your own enjoyment of your retirement. I’ll use a case study to explain this further. Insurance Safety Net

Case Study

Sam & Penny are 63 year-old retirees with two adult children. Both children have their own families and one also owns his own business. Sam & Penny wanted to give their children’s finances a boost now while they had young children and needed help rather than on their death.



Although Sam & Penny were keen to help out their children, they also wanted to keep the money in the immediate family (protected from in-laws and creditors).

In addition, they wanted to make sure their grandchildren were protected financially in case something happened to their parents.

They had seen friends having to take over raising grandchildren after a death of a child and saw the health, social and financial effects that had on their retirement so they wanted to put some protection in place.



We facilitated private loan agreements giving each of their children $100,000 to use towards reducing their mortgage debt. The loan required a minimal amount of interest to be paid yearly and no principal but it was enough to confirm a valid contract was in place. It cost $100 for each completely valid loan agreement

Importantly, if one of their children splits up from their spouse or their son’s business goes under, Sam & Penny can call in that loan, protecting their money from any family settlement and/or creditors. They can then later re-gift the children back the money when appropriate. I know this sounds harsh but they worked hard for their money and want to see it benefit their own children.

Sam & Penny also set up an annual $1,000 super contribution (Non-concessional) for each of their children, and their spouses, on the condition that it’s used to fund life, disability or income protection insurance. The added benefit is that they families also got some additional funds from the Government Co-Contribution which enabled better cover to be purchased on level premiums.

These contributions ensure that Sam & Penny’s grandchildren are financially set up if something happens to their parents. This strategy also protects Sam & Penny’s nest egg, because their grandchildren won’t need their financial support if the worst happens.

They are perfectly happy to step in if needed to care for their grandchildren but they have seen what the added financial worries did to their friend’s health and want to ensure they don’t suffer likewise.



  • Help their children get ahead
  • Protect the family’s money from ex-spouses, de-facto partners and creditors
  • Protect their grandchildren’s education and lifestyle
  • By locking in level premiums at a young age their children will benefit from lower premiums for life.
  • Keep their own nest egg intact for their retirement and provide a safety net.


There are ways to pass money to your adult children while protecting it from loss in the event of relationship breakdown.

Sometimes offering funds to insure your children is a far more cost effective way of coping with tragedies protecting everyone’s financial future.

Verante Financial Planning provides comprehensive financial planning services, covering both wealth creation and wealth protection. We help our clients grow their wealth and protect their families and businesses.

Why not click here to Schedule a Meeting by phone, face to face or via Skype if you want to look at your own insurance and family protection options. We have offices in Castle Hill and Windsor but can meet clients anywhere in Sydney or online via Skype.

Liam Shorte B.Bus SSA™ AFP

Financial Planner & SMSF Specialist Advisor™

SMSF Specialist Adviser 

 Follow SMSFCoach on Twitter Liam Shorte on Linkedin NextGen Wealth on Facebook   

Verante Financial Planning

Tel: 02 98941844, Mobile: 0413 936 299

PO Box 6002 BHBC, Baulkham Hills NSW 2153

5/15 Terminus St. Castle Hill NSW 2154

Corporate Authorised Representative of Viridian Select Pty Ltd ABN 41 621 447 345, AFSL 51572

This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. This website provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.

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