Financial Planning Case

Problems/losses: Mel 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. Assumptions: Taxation and other legislative conditions will remain stable; Income will Increase by 1% over the rate of Inflation;

The current dividend yield for direct share Is 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, guaranteed Investment and high Interest at-call deposit account all charge 2% ongoing management fees; Investment earnings from account-based income stream and guaranteed 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 in income assets (such as, deposit products and growth assets (such as, some managed funds) Strategies: about in 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 different 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 cash savings, and income from direct share portfolio could be put into a cash management account for emergencies and dally expenses; Transfer SMS too low-fee, account-based Income stream, she can withdraw the minimum 4% per year. While the rest of her money can grow tax-free in the ‘balanced’ investment option until she withdraws larger payments later. Invest the pension plan 1 in a balanced Arrange the pension plan 2 to a guaranteed investment of at least 4% payment per Invest the income from rental property in a high interest at-call deposit year. Account which she can access to extra cash if she needs without any withdrawal costs.