You are a graduate financial planner and have been sitting on client interviews with a more Senior Financial Planner. As part of this process you have been recording notes and collaborating on any strategy development with the Senior Financial Planner. David & Karen Rubble are new clients and have come to you early in the financial year seeking your advice in regards to their pending retirement. After a fact-finding session you uncover that David is 61 years old and is married to Karen who is also 61 years old. They are both employed. Karen works as a Nurse and earns a gross salary of $80,000 per annum. David is an engineer and earns a gross salary of $180,000 per annum. Their goal is to both retire within the next twelve months. They would like to receive a combined income of $80,000 in retirement to meet their living expenses. They wish to minimise tax both now and along the way and want to ensure their capital lasts throughout retirement and keeps pace with inflation. To some degree they would like to pass on some capital to their children and grandchildren

Karen asked, "We're worried as to whether will we have enough funds, where will our income come from, and how our desired lifestyle of $80,000 per year will be met, do you think we have sufficient capital to cease working?". In your answer, comment on the appropriateness of the desired $80,000 lifestyle. Is this amount realistic, given cash flow?
 

Transcribed Image Text:

some degree they would like to pass on some capital to their children and grandchildren. Their assets are as follows: Assets & Liabilities Family Home Car-Mazda 3 (One year old) Car-2002 Toyota Corolla Rental investment property, 101 Quarry Road Bedrock Town. Purchased in 2015 for $600,000 Wilson Asset Managers Leaders Fund (Managed Fund) - Purchased in 2016 for $50,000 Cash Funds in Bank, earning 1.5% p.a. Nurses Super Fund of Australia (Balanced fund) XYZ Superannuation fund (Balanced Fund) ABC Superannuation fund (Balanced Fund) Total assets Their liabilities debts are: Amount $900,000 $40,000 $1,000 $500,000 $100,000 $145,000 $200,000 $250,000 $700,000 $2,836,000 Owner David Karen David Joint ownership Joint ownership Joint Karen Karen David some degree they would like to pass on some capital to their children and grandchildren. Their assets are as follows: Assets & Liabilities Family Home Car-Mazda 3 (One year old) Car-2002 Toyota Corolla Rental investment property, 101 Quarry Road Bedrock Town. Purchased in 2015 for $600,000 Wilson Asset Managers Leaders Fund (Managed Fund) - Purchased in 2016 for $50,000 Cash Funds in Bank, earning 1.5% p.a. Nurses Super Fund of Australia (Balanced fund) XYZ Superannuation fund (Balanced Fund) ABC Superannuation fund (Balanced Fund) Total assets Their liabilities debts are: Amount $900,000 $40,000 $1,000 $500,000 $100,000 $145,000 $200,000 $250,000 $700,000 $2,836,000 Owner David Karen David Joint ownership Joint ownership Joint Karen Karen David

Answer rating: 100% (QA)

Based on the provided information David and Karen Rubble are seeking financial advice to retire with... View the full answer