Financial Plan for Retirement: A Case Study Analysis

Desklib provides past papers and solved assignments for students. This report analyzes a client's financial plan for retirement.

Financial Plan
1

Contents
Introduction................................................................................................................................3
Objective....................................................................................................................................4
Personal Details of the client’s are:....................................................................................5
Details of Work:................................................................................................................6
Identify Concerns..............................................................................................................17
Establish Investment Needs, Preferences And Priorities..................................................17
Investor Risk Profile.........................................................................................................19
Client Statement And Authorisation.................................................................................24
2

Introduction
As we know we work hard for years and save money for retirement. When we get ready to
enjoy all which retirement offers, we want to be so sure that we have enough savings to take
the advantage.
We Need a financial plan:
Its time to develop a financial plan that will take full advantages of our resources. Pursuing
new challenges, discovering our passions no matter that how we envision our life in
retirement. A better financial plan will help to meet the expectations with reality and it
assures our money will last over the last years. This plan will help us to develop a best
financial plan and it includes the process that how we should manage our savings. For
developing a financial plan, it is important to collect and organize the information to make
the best choices and decision.
Some of the steps that should be followed while developing a financial plan:
Step 1. Knowing the facts
The first step is to work with financial advisor so that he/she can evaluate the financial
situation and keeping in mind some aspects like age, the objective of retirement, analyze the
impact of inflation and also analyze the ability to meet the expectations.
Step 2. Identifying the sources of retirement
One should need to plan and establish a retirement plan with sustainable portfolio. It is
important to first identify the sources of retirement and it will be based on your income and
expectations to meet the requirement.
Step 3. Consolidating our savings
After identifying the potential resources of retirement one should consolidate its savings to
simplify the retirement plan. It is very important to allocate your assets efficiently. It will
help you to decide that what amount should be invested in shares and stocks or how much
should be invested in equity or debts.
3

We should not forget the fact that retirements planning means you are planning for yourself
for a long period of time.
Here is one chart that shows you can invest upto one third of your life in retirement. People
should develop a financial plan which will help them to establish a healthy life and the plan
will provide the income for more than 25 years.
We can see for an exampleif a woman with age 65 will have a 50% chance of surviving to
age 85. It means she will have 20 years to consider having resources to provide her financial
requirements. Some of the factors in the scenario from which we need to be protected like
inflation. It should not decrease your purchasing power. We need to focus on our objective
and identify the problems as well. As we know retirements plan could be different for
different people. It totally depends on individual priority.
Objective
The main objective of the analysis is to develop a financial plan that would meet the
individual’s expectations.
Here some of the goals which should be included in plan and these are:
As per the case study the goals should be:
1. Retire Early
2. Create a steady stream of income
3. Business transition and succession
Some of the concerns are:
1. Taxes
2. Market declines
3. Risk tolerance
The next step is estimating the retirement expenses:
Here for developing a financial plan we need to create a budget. We can analyze it by our
current expenses and by estimation of increasing and decreasing of the expenses by the time
4

of retirement. We believe that 70 to 80% of the current income will be needed during
retirement.
In order to develop a financial planning, the financial planner should go through some of the
things listed below:
-Identification of the current financial position of an individual
-Goals identification
- Identify the course of action
-Evaluation of the resources
-Implementation of the plan
-Revaluation of plan
Here the financial planner is Mentor Financial Planning Pty Ltd as per the case study. This
company is gives the financial plans and other services too like risk management services,
Wealth maximization etc. The financial advisor will provide the information regarding his
academic background and the experiences in the field of financial advising. The company
also charges the money on the basis of his/her time spend on the advising and creating plan
for the client. The financial advisor will also ask the client on their understanding of fee and
charges of the company who is providing service on financial planning.
There are some three steps that the client need to take if they have any complaint on the
contract the ASIC follows:
1. Contact the company with complaints
2. Taking your complaints further
3. Contact some resolution schemes
Personal Details of the client’s are:
a. Contact details of clients:
5

Personal Details: 1st Client 2nd Client Mark
1. Title:
2. Name Donna Dennis
3. Preferred Name: Donna Dennis
4. Last Name: Barker Barker
5. Date of Birth:
6. Marital Status: Married Married
Address
Address:
Town:
State: Postcode:
Home
Telephone No.
Preferred
Contact No.
6

B. Children Details:
Name: Megan
Relation: Daughter
Date of Birth:
Current Age:
Financially Dependent: No
C.Financial arrangements with relatives, siblings
Name:
Relationship:
Financial Arrangement
Date of commencement
Amount:
D.History of relationship involved in financial plan:
As per the case no marriages has been done earlier having financial implications
7

E.Details of health:
Smoking: No
State of Health: Excellent
Do you have any health issues
that can affect your ability to earn
an income. Kindly provide.
No, There is no such health issues.
Details of Work:
A. Personal financial arrangements:
Dennis and Donna both earn their salary or income from their jobs only, there is no
such other personal income arrangements.
B.Experience in investment:
Individual 1 Individual 2 Mark
Donnapays $290,000 into her
superannuation fund as the personal
contribution.
Dennis has superannuation savings
$138,000 held within PP superannuation
fund.
8

B. Guranter:
No
D.Employement Details:
1st Client 2nd Client Mark
1. Employment Status: Full Time Employed
Full Time Employed
2. Employer Name: Best Marketing Newbold Pty Ltd
3. Position Title: Business Development
Manager Joiner Making Custom
E. Financial History
Mar
k
Do you have a previous financial history such as:
9

· Bankruptcy No
· Refusal of credit: No
Issues with estate planning:
CLIENT 1 CLIENT 2
Are you
having
current
will?
No No
Date of
Will
N
o
N
o
Power of
attorney No No
Type /
Name of
Attorney?
Do you
have
Funeral
No No
10

Plans?
Do you
have any
specific
intentions
regarding
your
estate
distributio
n?
No No
1. g) Retirement planning
Retirement Details CLIENT 1 CLIENT 2
Planned Retirement Age: 53 52
Retirement Income required: $90,000
(today’s dollar) $45,000
After retirement, do you intend to work again
either on a full-time or part-time basis? N0
Yes
Expected Income
$: $25,000
Till age: 65
What capital expenses will you have in
retirement? (Please state expense and value)
11

$40,000 $40,000
Would you like some assets left to your estate?
(Please detail) No No
Special Needs
a)
Special Needs Description

a deficient in English No, the client does not have any problem
regarding the need mentioned.

variety of products and services outside
authority
Yes, the service varies according to the
demand made by the client.

complex estate planning situations No, simple estate planning situations.

unbalanced financial situations No, the client is provided with the simple and
the biased financial situation

a disability
No, the ability is created for the changes

needs of different cultural backgrounds No

age related needs (i.e. very young or older age
groups)
Yes, the needs vary dependent on the age
group.
12