Case Study – 50 year old with super
Beverly was a 50 year old teacher who’d accumulated around $150,000 in her work super fund and another $50,000 in a term deposit. Her children had recently left home and she was ready to begin saving for her future.
We spent a few meetings with Beverly helping her decide on the things in life that were important to her. Out of this process we helped her create a list of things she wanted to do over the rest of her life. This included travel, spending more time with family and friends, working part time and undertaking some volunteer work.
Once she’d decided on the goals that were important to her, we helped her determine how much money she’d need to achieve them. Then, based on her existing investments and resources we showed her how, with some extra saving now, she’d be able to begin achieving her goals.
Areas we looked at included salary sacrificing into super, investing into a managed fund and taking out insurance to protect against illness or disability.
We now meet with Beverly each year and show her how she is progressing towards each goal. We also take the time to help her review her goals to ensure they still reflect the things that are important to her.
Beverly now feels confident that she’s on track to achieve her goals and is happy that much of her financial plan is automated; freeing her up to do the things that she enjoys doing.
Case Study – 40 year old with debt
Michael and Tracy are a couple in their early 40’s with two teenage children. Michael is an architect earning $70,000 per year and Tracy works part time as a teacher, earning around $40,000 per year.
When they came to see us they had no clear direction for their finances. They were spending all that they earned, making little progress in reducing their mortgage, and each had three different super funds.
We helped them clarify their goals for the future. Whilst retirement was still some way off, they had other goals that were important to achieve over the next ten years –repaying their mortgage and having one family holiday overseas.
We referred them to one of our professional partners who reviewed their home loan and helped them refinance at a lower rate. We helped them determine how much they would need to begin paying to repay their home loan over the next ten years.
We helped them commence a savings plan to save for their overseas holiday. The money was debited automatically from their bank account each month – they found this forced saving worked very effectively for them.
We also looked at their super funds and consolidated their funds to reduce fees. We helped them better understand the benefits associated with superannuation and showed them how investing more appropriately for their long-term time frame could help them have a higher lump sum when they retire.
We also reviewed their insurance – something they’d never got around to looking at. We showed them how important it was to protect their incomes – without an income their financial plan would fail. We also discussed how a serious illness would impact on their finances and future standard of living. We made recommendations for appropriate levels of insurance to ensure that should a serious illness or even death occur, the financial effect on the family would be minimised.
With a bit of adjusting, Michael and Tracy now feel like they’re on track to achieve their goals. They’ve cut back on some non-essential spending and re-allocated that money to saving for their family holiday and reducing their mortgage.
We help them monitor their progress by meeting with them regularly to review their progress towards their goals.
Case Study – 55 year old saving for retirement
Bob and Kathy came to see us soon after Bob turned 55. They were concerned that they weren’t saving enough for their retirement and wanted to find out what they should be doing.
We spent some time helping them decide on their goals for the future. They decided they’d like to aim to retire in 8 years time when Bob turned 63. They estimated they’d require around $45,000 per year to fund their future lifestyle expenses.
Bob and Kathy already had money accrued in superannuation as well as some investments in managed funds. Whilst they were able to save regularly, they had no idea if they were saving the right amount.
We created some projections to show them how their existing super could grow into the future based on their current level of contributions. We estimated this wouldn’t be enough to fund the lifestyle they desired.
We showed them how they could begin to make salary sacrifice contributions to super out of their pre-tax income to enable more money to be saved. In addition, by starting a transition to retirement pension from their super now, they could afford to contribute more to super and replace the lost income with tax-effective income from this pension.
With some minor reductions to their cashflow and a more substantial increase in their regular savings, Bob and Kathy are now on track to be able to retire comfortably at age 63. We meet with them regularly to show them how they’re progressing towards their goal. This gives them peace of mind and enables them to enjoy their current lifestyle now, whilst knowing they’re on track for a comfortable retirement in the future.
Related posts:
- Financial Planning Week 2009 Day 5 – Goals and Financial Confidence In yesterday’s article we talked about how we use the...
- Financial Planning Week 2009 Day 3 – What Does a Financial Planner Do? In previous articles we’ve looked at the value of obtaining...
- Salary Sacrifice Revealed Salary sacrifice, particularly salary sacrificing money to superannuation remains one...
- Financial Planning Week 2009 Day 4 – The Wealth Snapshot In yesterday’s article we talked about the six step financial...
- Financial Planning Week 2009 Day 1 – The Value of Advice May 25 – 31 is Financial Planning Week for 2009. ...
