CASE STUDY 1
THE CLIENT
- Jack (68) and Gill (68)
THE CONTEXT
- Occupation - retired
- Incomes - $60,000/ annum
- Dependents – none
- Home value - $1,500,000
- Contents value - High
- Mortgage - nil
- Cash - $40,000
- Superannuation - $1,500,000 and $150,000 respectively
- Investments - nil
- Insurances – nil
- Disposition – conservative but open to risk
THE OBJECTIVE
- Income of $60,000/ annum – comfortable retirement
- Annual overseas trip - $20,000 - $30,000/ annum
- Access to majority of funds for rainy day
THE STRATEGY
- Maintain $30,000 in a fixed term deposit
- Maintain $10,000 in a joint account to account for fluctuating income
- Review wills and establish an enduring Power of Attorney
- Roll all superannuation funds into an account based pension each nominating the other as their reversionary pensioner
- Superannuation invested in a layered portfolio –
- Layer one - cash, earning about 2.5%/ annum
- Layer two - managed funds that pay a high level of franked dividend - with tax credits and income in the range of 7% to 8%/ annum
- Layer three - shares and/or managed funds that have a proven track record in producing above index total returns over the longer term
THE OUTCOME
- Level one - $3000/ annum
- Level 2 - $60,000/ annum
- Level 3 - $9900/ annum
- Net – after fees - $65,900/ annum
THE LESSONS
- Retirement planning needs to continue beyond retirement
- There are a range of options that need to be considered
- Planning goes beyond money to address broader security