Financial Planning Case Study

Topics: Investment, Tax, Pension Pages: 3 (661 words) Published: August 23, 2013
Mei Ling may not have enough money to cover her later years expenses; •She had been a fairly aggressive investor, but she may not want to take very risky investment since she cannot afford to lose at her age.

Goals and objectives:
Cash-flow management;
Pay off the property investment loan;
Superannuation adequacy and savings programs;
Personal investing.

Taxation and other legislative conditions will remian stable; •Income will incerease by 1% over the rate of inflation;
The current dividend yield for direct share is 7%;
The expected return for the investment of balanced managed fund is 7%; •Income from rental property is $30,000 per year;
Investment in account-based income stream, guaranted investment and high interest at-call deposit account all charge 2% ongoing management fees; •Investment earnings from account-based income stream and guaranted investment are tax-free, and income stream payments are also tax-free; •Superannuation and pension plan 1 is from a taxed source.

Risk profile:
More likely to be ‘Balanced’ than ‘Aggressive’
On this basis, I think an appropriate asset mix for her is:
about 40% in inocme assets (such as, deposit products), and •about 60% in growth assets (such as, some managed funds)

Develop a workable budget and a savings plan (current expenses seem a little high at nearly $2,083 per week before tax); •Spread investments across a number of differnet classes of assets, invest parts of asset in retirement income stream and parts in balanced managed fund; •Use superannuation to pay off the property investment loan $400,000; •The rest superannuation ($413,000-$400,000=$13,000), cash savings, and income from direct share portfolio could be put into a cash management account for emergencies and daliy expenses; •Transfer SMSF to a low-fee, account-based income stream, she can withdraw the minimum 4% per year, while the rest of her...
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