Superannuation & Retirement Advice

Superannuation &
Retirement Advice
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Table of Contents
Executive Summary...................................................................................................................3
Present Position/Information about the clients, Financial Positions and Important assumptions
....................................................................................................................................................5
Risk profile and Assets allocation..............................................................................................8
Quality of advice and recommendation...................................................................................10
Analysis....................................................................................................................................18
Conclusion................................................................................................................................19
References................................................................................................................................21
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Executive Summary
A superannuation fund is an essential part of a financial plan. One should formulate a
financial plan by keeping superannuation fund in mind, as it plays a very important role in
cash inflows after retirement. In the given case the client Graham and Anna who are 53 and
51 years of age having two dependent children, plans to get retire after 9 years i.e. at the age
of 62 and 60 respectively. Before the retirement, they wish to accomplish their goals which
included to purchase a house and they're after retirement expenses including holiday expenses
once in two years. They wish to invest their money in such a way so that they can achieve
these objectives.
Both Graham and Anna has shared more than 25 years of their married life. If we talk about
the main earner, then Graham has always been the main source of income earner because due
to the future of their children and to focus on children’s career Anna has left her secretarial
job a long time ago.
As Graham has been working as a senior engineer with BlueScope Steel for the last 26 years
and recently as a part of major restructure he was offered voluntary redundancy. The benefits
are $175,000 in total as a redundancy benefit.
Subsequently, Graham has offered a new role in Pilbara Port Corporation as a site engineer in
an ongoing contract in Western Australia with the total package that he is earning now
$195,000 plus the superannuation benefits 9.5%, which Graham is going to join. Graham and
Anna with their 2 children will soon shift to Perth and he will start his new role as a site
engineer in Pilbara Port Corporation. (Ainsworth, et. al., 2016)
Anna is also willing to join a new job and found a part-time role as a personal assistant to a
training and development manager at “All brains Inc.” As confirmed by her she will soon
start her new role in three months’ time and her remunerations will be $52,000 p.a. plus
superannuation at 9.5%.
The couple is planning to rent initially an estimated $650 per week as rent per week. For the
purpose of buying a property in Perth, they have also approached an agent as they want to
own property rather than rent. Graham will manage to the Pilbara region as he will fly in fly
out. His work structure is designed in such a way that he will initially work for 10 days and
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then 6 days off. The company is supposed to bear all his travelling and living expenses. The
family home that they have been rented on $600 per week (Williams, 2018).
They will be planning to buy a house by borrowing money from their superannuation fund
and have done the formalities.
Graham and Anna have also made some investments in various properties that were
purchased more than a period of 18 months in 2011-12. There are 2 residential investment
units on the gold coast which are now valued at the cost which is less than their purchase
value. Below are the original purchase price of the properties:
Gold Coast: Unit 1 $159,000
Gold Coast: Unit 2 $268,000
Brisbane industrial property: $385,000
Wollongong family home: $310,000
It is expected that the investments in Gold Coast units will get double in the time frame of 10-
15 years, but Graham is getting very concerned now about his both gold coast units which are
valued below their original purchase price. He is also concerned about the properties and
wants the overall negative gearing as a tax advantage.
One more concern of them is to admit Anna’s mother Marie in an aged care facility. Marie
Francis, Anna’s mother is 78 years of age and has been living in their granny’s flat
(non-homeowner) in Wollongong, due to illness and other health issues, she been currently
assessed by a team of aged care facility and the aged care home has allowed her to shift in
their aged care facility (Bateman and Morris, 2015).
Marie has an investment worth $380,000 in the form of cash and also in the bank’s term-
deposit. She receives a part age pension. Graham, Anna and Marie have selected a church-
operated facility in Wollongong as per Marie’s comfortability. This has a deposit price of
accommodation is $240,000. Both Graham and Anna believe she will live with comfortability
with an income of $22,000.
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Present Position/Information about the clients, Financial
Positions and Important assumptions
Currently, Graham and Anna Sutton who are 53 and 51 years of age having 2 children Sam
and Jodie, are working as a senior mining engineer at BlueScope Steel, Wollongong, NSW
and discharging home duties respectively. Graham’s total redundancy benefits are $1,75,000
and as Anna is discharging her home duties she is not earning anything in terms of money
(McGowan, 2018).
After the two-week time, Graham has an offer which he is going to accept to work as a site
engineer in an ongoing contract in Pilbara Port Corporation in Western Australia, with the
total package of $195,000 plus superannuation of 9.5%, simultaneously Anna is also looking
forward to engaging herself in the workforce and has found a suitable part-time role in Perth
as personal assistant to the training and development manager at All Brains Inc. Anna will
earn $52,000 P.A. plus superannuation at 9.5%.
Their children are still in school and the expenses are expected on them is $ 10,000 per year
on each child up to the age of 24. Graham wishes to retire after 9 years and Anna wishes to
work till Graham does.
Graham and Anna have to move for the purpose of their new job and the expenses are
expected to be $ 650 per week. They have also made some investments in their own names
and joint names. Apart from this their estimated annual growth income is $2,50,900 and
$71,650 for Graham and Anna respectively (Clark, et. al., 2018).
Basically, Graham and Anna have estimated that they will require $65,000 per year in terms
if today’s equivalent dollar, excluding their holiday cost which will occur in every second
year that was estimated to $15,000. Graham and Anna will both earn estimate $2,50,900 and
$71,650 p.a. in coming years, so and their annual expenses are $1,58,000, so they have
$1,64,550 for investments and other than house-related expenses (Willows, et. al., 2018).
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Graham and Anna can attain the objective that they have set after their retirement by
following the below points:
 They need to increase tax saving by taking the benefits of maximum deductions of the
income for the purpose of tax and ensuring handsome amount in government
securities which are also helpful in saving tax (Dwyer, et. al., 2018).
 Invest in such securities from where they can get higher dividend and interest such as
debt fund, debenture and fixed deposits.
These forms of investment can help them for better investments opportunities and maximise
returns form the investments and secure money for their children to achieve their set financial
targets. It would also be possible for them to own their own house if they manage the tax
accordingly and also help them to have sufficient funds at the time of retirement. It would
really help them to better orientation and ensure effective financial development. Every
financial plan focused on generating more revenue from the investments that have done and
make the investments in such assets where the high return is generated (Niblock, et. al.,
2017).
For attaining the financial objective, the following assumptions need to be taken by
Graham and Anna:
 The income that both Graham and Anna are earning will be increasing as their
increment comes into effect.
 There will not be any major expenses will arrive which is not anticipated.
 All the working conditions will be constant for them.
If we talk about the annual income of Graham and Anna, it can be better observed through
below table.
Details of estimated annual gross income
Graham Anna
Gross salary income $195,000 $52,000
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