Question

Joe and Judith Objectives and Needs

YOUR OBJECTIVES AND NEEDS

• To plan for their retirement in approx. 10 years’ time. They are flexible and open to considering other ideas.

• To pay off their mortgages at retirement

• To restructure their affairs with a view to having $70,000 annual income in retirement

• To minimize tax both now and in retirement

• To receive full Age Pension if possible

• The home mortgage is scheduled to be paid off in approximately 10 years

• To ensure that their wishes are carried out when they pass away.

• To minimise fees/costs on investment/super/insurance

• Protect family in case of a disablement or death

• Consolidate super for ease of management

• ADVISER NOTES

• Clients are not happy with their current superannuation funds and have had no advice on the investments in their super. They are considering switching super funds and seek advice. Judith’s mother has passed away and she will receive her inheritance of $100,000 in the next month.

  The clients plan to stay in their current home, which has recently been renovated.
  The clients have had some experience investing but have not previously had help with their financial planning.
  Joe is self-employed and he doesn’t receive super from an employer. He does make his own annual $10,000 concessional contribution and wants to know if this is enough.

What is the recommendation would you give to them if you are a financial advisers??

Answer 1

As a financial adviser:

1. Joe should contribute more than $10,000 to concessional contribution because this will give him more taxation benefit and retirement income will automatically be increased.

2. The inheritance of $100,000 will be received and they can invest it further in a supper annuation funds of low amount investment for many years say long period.

3. If their level of investment will be increased then their taxation value benefit will be improved because this will provide more benefit in terms of exemption and tax rate limit.

4. Along with investment Joe can have advantage of mortgage rate under taxation.

5. His taxation amount will be increased and he can have taxation benefit under various taxation chapters.