Problem
You are a financial adviser helping your clients make financial decisions and plan for the future. You specialise in retirement planning. A referral has been received from an existing client and a fact find meeting was conducted with Bob (Robert) and Ann Sackley on the 3rd of January 2023. During the meeting you find that Bob and Ann are both 67, considering their retirement plans and decided to undertake a review of their current financial situation.
On 1 July 2022, they both purchased lifetime annuities for $60,000 each. These provide a $6,000 pension each per annum. In addition, they held the following assets as of 1 July 2022:
Home = $850,000
Mortgage on home = $150,000 , Prepaid funeral = $50,000 , Term deposit at 4% = $350,000 , Managed fund = $70,000 , Direct shares = $80,000 , Rental property = $450,000 , Motor vehicles = $40,000 , Antiques = $50,000
Jewellery = $45,000
On 1 November 2022, the Sackley's decided to give $100,000 from their investments (i.e., $50,000 to each of their two children) to help them with the purchase of their first homes. Bob has decided to take a part-time job with a local art dealer and expects to earn $100 per week.
You prepare responses to the following questions and have been asked by the principal to record, demonstrating a client presentation for training purposes.
1) Calculate the Sackley's assessable assets.
2) Calculate the Sackley's financial assets.
3) Calculate whether Ann and/or Bob are eligible for the Age Pension and/or other benefits.
4) Are there any other strategies that you can suggest assisting the Sackley's to maximise their pension entitlement?