Inspirational Case Studies
Retirees Case Study
The rules surrounding the Age Pension are constantly changing, making it difficult to know whether you are maximising your entitlements. This makes it essential to seek professional financial advice to help analyse your Centrelink entitlements so that you are not missing out on benefits you have every right to claim. The following case study illustrates what a difference this can make.
Stan and Alice Blythe have been retired for a couple of years and live off their investment income. They enjoy travelling and go on a number of trips each year. They have various hobbies and are active in the local community. Stan has a health issue and they spend a portion of their income on medicine.
They would like to ensure that they are doing the right things with their investments and don't want to feel like they're missing out on any potential benefits or strategies that could improve their financial position.
Stan and Alice discussed their situation and lifestyle goals with their financial planner and provided their financial details as part of the financial planning process.
Current Income and Expenditure
|
Allocated Pension Income |
$35,000 pa |
|
Allocated Pension Income |
$25,000 pa |
|
Living Expenditure |
$60,000 pa |
Current Lifestyle Assets
|
Principal Residence |
$500,000 |
|
Home Contents |
$8,000 |
|
Motor Vehicles |
$15,000 |
Current Investment Assets
|
Bank Account |
$15,000 |
|
Miscellaneous Shares |
$28,000 |
|
Stan's Allocated Pension |
$460,000 |
|
Alice's Allocated Pension |
$410,000 |
After a thorough analysis of their finances the advice provided the Blythes includes the following:
Investments
As the Blythes rely on their investments for their livelihood, they want to make sure that they are making the right decisions in regards to their investments. They wanted to ensure that they do not expose themselves to excessive investment risk. They required a thorough analysis of all of their investments.
The Blythes' miscellaneous share portfolio is not contributing to their overall strategy significantly and following a review of each share parcel and capital gains tax considerations it was established that the shares could be redeemed and proceeds used to help Stan and Alice achieve their goals.
Stan and Alice's attitudes to investment risk were assessed and compared to their investment allocation. Changes were made to their allocated pensions with a portion of each pension balance switched to cash. This would be adequate for funding income payments over the next two years.
Retirement Income
Another aspect of Stan and Alice's situation is ensuring that they will have the income they want for the duration of their retirement. This involves analysing their income needs in the context of their available investment capital and expected future investment returns.
In order to fund a retirement income of $60,000 per annum the Blythes require capital of approximately $1.1m. The Blythes' current investments total $913,000 which may be adequate to provide an income of $50,000 per annum.
