Reference no: EM133006806

ACBUS107A Financial Planning Fundamentals

Client Strategy Case Study

Question 1
In relation to the details provided above, there are several factors that you, as a financial adviser, need to ascertain in further detail in order to provide recommendations to Teresa. Identify at least 4 of these factors and for each of these, briefly analysing why that factor is important for providing advice to Teresa.

Question 2
When reviewing Teresa's expenses (including those deducted from super), you have identified a number of items that may be able to be reduced between now and when Teresa retires. In the words you would ask Teresa (ie clear, concise questions to the client) detail at least 2 areas of Teresa's current spending you would like further information on to determine if they can be eliminated by the time she retires or used to increase her current savings.

Question 3
Identify at least four (4) S.M.A.R.T. goals and objectives, including any you may have identified for Teresa. In your answer, state whether each goal is achievable and/or a timeframe to execute the goal, or any relevant comments about the goal.

Question 4
How much superannuation guarantee will be paid for Teresa and how much would Teresa be eligible to salary sacrifice into super in the 21/22 financial year assuming she had total concessional contributions of $10,000 in the 2019/20 and 2020/21 Financial Years? Remember the concessional contribution cap has increased from FY21/22.

Question 5
You have been given the tax calculation for Teresa for 21/22 FY, before a possible salary sacrifice strategy (Before Column).
Calculate Teresa's tax assuming she undertakes a salary sacrifice strategy (assuming the maximum allowable salary sacrifice from Q2) to determine how much tax she will save and what additional savings capacity she will have. Use the tax rates provided in the Resources and include calculations/notes below the table.

Question 6
Teresa would like to understand if she is likely to be eligible for the Aged Pension when she reaches the eligible age. Calculate an estimate of what she would likely receive per annum today using the Age Pension data provided in the Resources and the following assumptions:
• Teresa has reached Age Pension age
• Her superannuation balance has increased by another $50,000
• The valuations on her other assets have not changed.

Question 7
Once retired, assuming her existing investments are as estimated in Q6 and she receives the amount of Aged pension you calculated in Q6, discuss how Teresa can generate the balance of her desired income from her superannuation investment. In your discussion, include reference to:
* approximately how much Teresa would need to earn/drawdown to reach her desired retirement income,
* suitable investment products that can be used (both superannuation products and products/investments she could access if she took her money out of super)
* any tax implications of these products.
* the minimum and maximum amounts she may be able to access, and how, if she keeps the funds in the superannuation environment.

Question 8
Suggest at least 4 strategies Teresa could employ to increase her Age Pension entitlement and whether there are any risks in her using these strategies.

Question 9
As an alternative to maximising the Age Pension, what other strategies could Teresa undertake to improve her retirement position over the next 2 years before retirement. Consider Teresa's goals (including those you may have identified); her savings capacity and any limits (even if Teresa does not have the funds to hit these limits) in the possible strategies.

Attachment:- Financial Planning Fundamentals.rar