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KAPLAN SRP 0209 assignment q 6 QUESTION!

 
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Old 24-08-2009, 06:19 PM   #1
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KAPLAN SRP 0209 assignment q 6 QUESTION!

Hi All!
Would really appreicate some advice here...
I'm doing Question 6 on the Superannuation and Retirement Planning assignment

I have estimated that when Richard and Bernadette retire they will need approx $400,000 plus. Meaning that there is a shortfall of 8 years.
This shortfall costs $47500pa (as this is their day to day living expenses).
What strategies can I use (ie TTR, super transfer, gifting etc) that will be suitable in their circumstance? I tired TTR, but Bernadette isnt earning enough for it to be viable, she will drawn down more from her allocated pension then she will be putting in.
HELP!!!
Thank you!

Heres the question:
Bernadette now wants to retire when she turns 65. Assume that Richard has already
retired. Based on the facts presented in the case study, prepare a detailed report
describing the strategies and types or styles of investments you would consider the couple
to undertake to satisfy all of their goals and objectives both now and in preparation for
retirement. Include in your answer the reasons why such strategies and investments would
be suitable for the couple.
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Old 27-08-2009, 10:39 AM   #2
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Smile helpful hints

Hi
How are you going with the rest of your assignment? Have you done the previous questions first before you do this question?
The other earlier questions enable you to work out the kinds of strategy's that will help Richard & Bernadette.
Q6 is like a big conclusion to what you have worked out in your previous questions.
You are on the right track about gifting etc.
You just need to work out where they are now, where they want to be and then most importantly, as you know those 2 things, is how you're going to get them there.
From the things that you have mentioned in your question you already have a good understanding.
msg me back and let me know what you have done in your other q's
BB**
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Old 27-08-2009, 10:46 AM   #3
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Quote:
Originally Posted by Mozzzza View Post
Hi All!
Would really appreicate some advice here...
I'm doing Question 6 on the Superannuation and Retirement Planning assignment

I have estimated that when Richard and Bernadette retire they will need approx $400,000 plus. Meaning that there is a shortfall of 8 years.
This shortfall costs $47500pa (as this is their day to day living expenses).
What strategies can I use (ie TTR, super transfer, gifting etc) that will be suitable in their circumstance? I tired TTR, but Bernadette isnt earning enough for it to be viable, she will drawn down more from her allocated pension then she will be putting in.
HELP!!!
Thank you!

Heres the question:
Bernadette now wants to retire when she turns 65. Assume that Richard has already
retired. Based on the facts presented in the case study, prepare a detailed report
describing the strategies and types or styles of investments you would consider the couple
to undertake to satisfy all of their goals and objectives both now and in preparation for
retirement. Include in your answer the reasons why such strategies and investments would
be suitable for the couple.
In q3 it asks you to work out a transition to retirement for Bernadette. Have you done that? I understand what you are saying, but you could place a larger amount into her super and draw down an amount from an allocated pension for her. TTR is benificial because her tax rate drops and any associated offests will go up. You could work out a before and after TTR for her with all earnings that she has. All the previous questions are going to help you get q6 on the right track. I hope this is helping.

remember that he will be eligible for some form of gov help too

and who should have the bala nce of the super funds? should they both have it split? or together as one lump?
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Old 27-08-2009, 10:48 AM   #4
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Quote:
Originally Posted by Mozzzza View Post
Hi All!
Would really appreicate some advice here...
I'm doing Question 6 on the Superannuation and Retirement Planning assignment

I have estimated that when Richard and Bernadette retire they will need approx $400,000 plus. Meaning that there is a shortfall of 8 years.
This shortfall costs $47500pa (as this is their day to day living expenses).
What strategies can I use (ie TTR, super transfer, gifting etc) that will be suitable in their circumstance? I tired TTR, but Bernadette isnt earning enough for it to be viable, she will drawn down more from her allocated pension then she will be putting in.
HELP!!!
Thank you!

Heres the question:
Bernadette now wants to retire when she turns 65. Assume that Richard has already
retired. Based on the facts presented in the case study, prepare a detailed report
describing the strategies and types or styles of investments you would consider the couple
to undertake to satisfy all of their goals and objectives both now and in preparation for
retirement. Include in your answer the reasons why such strategies and investments would
be suitable for the couple.
Also remember they have funds elsewhere. Take your time and have a look at what they have and work out what to do with it that will be most beneficial to them and tax effective/assets & income tests etc
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Old 27-08-2009, 02:58 PM   #5
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Unhappy Q3 Ttr

Hi there.
I dont understand how TTR is benefiting Bernadette.
i realise that she enjoys her work so it would be best for her to stay working full time and salary sacrifice into super. My question is her income is already quite low so she is effectively on the lowest tax bracket.

Also how do we determine how much she should sacrifice into super and how do we work out how much she should draw down from her pension?

I've estimated she sacrifice $20,000 of her $26,000 income so the remaining $6k will be tax free. But the $20,000 will be taxed 15% in conts tax.

Ive also estimated she draw $18k in the TTR pension.
Does this sound right ?

As Mozza mentioned she will be drawing more than she is sacrificing into super. I've tried increasing the amount she will be sacrificing but it doesnt seem beneficial. Yet we still need to outline a TTR strategy for her?

Help

The study notes don't detail this at all. I'm finding that simply using the study material provide will not suffice for a pass.

Last edited by banana1; 27-08-2009 at 03:25 PM.
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Old 28-08-2009, 11:55 AM   #6
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Hi

you are certainly on the right track! You also need to consider any offsets that she is able to get now and whether any of them will increase. Also show before TTR and after TTR calculations, using ALL of her income that she recieves. Its not just her salary income

You are correct, she wants to stay working full time, so leave as is.

With TTR what you are looking to do is increase her super balance before she retires. Remember what she has going in there will be accruing earnings as its invested, rather than her receiving and spending all her salary. Then the income that she draws will be drip fed from an allocated pension. There are lots of factors to consider and the more comprehensive your answer the better.

Its up to you entirely how much you reckon she should do as a TTR arrangement, everyone will have a different idea, mine was different to yours, but the objective is still the same

What they want you do do, is work out a strategy based on the facts presented.

p.s GOOGLE FIDO, they have some excellent calclators on there that can assist

hope this helps

Last edited by BB**; 28-08-2009 at 12:05 PM. Reason: forgot something
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Old 28-08-2009, 04:06 PM   #7
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Hi BB

You are a great help. I didnt consider her other income generating assets as part of this exercise.

Bernadette has shares and is receiving an income.

I've worked out the say she'll receive $255.67 in income from her ANZ shares.
Which is 4.5% of her zna share value. Is this right ? Or do we need to consider franking and unfranked and credits etc... ?
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Old 28-08-2009, 04:39 PM   #8
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Quote:
Originally Posted by banana1 View Post
Hi BB

You are a great help. I didnt consider her other income generating assets as part of this exercise.

Bernadette has shares and is receiving an income.

I've worked out the say she'll receive $255.67 in income from her ANZ shares.
Which is 4.5% of her zna share value. Is this right ? Or do we need to consider franking and unfranked and credits etc... ?
Any time!
yes she has her share income so you need to work out each share and how much they are worth, then the dividend income etc that she gets. popping it into a table is a good idea and show all calculations fo everything.
also there is other income too, and you need to split as its in joint ac/s (50% share)
if you type in franked or fully franked shares into google, heaps of info comes up and will show you how to work the figures (I can't recall whether they're fully franked or not)
this is more Q3 stuff, but will assist in ou getting all the figure right for the end question which is usually worth the most points.
have a good weekend
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Old 28-08-2009, 04:47 PM   #9
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[QUOTE=BB**;73416]Any time!
yes she has her share income so you need to work out each share and how much they are worth, then the dividend income etc that she gets. popping it into a table is a good idea and show all calculations fo everything.
also there is other income too, and you need to split as its in joint ac/s (50% share)
if you type in franked or fully franked shares into google, heaps of info comes up and will show you how to work the figures (I can't recall whether they're fully franked or not)
this is more Q3 stuff, but will assist in ou getting all the figure right for the end question which is usually worth the most points.
have a good weekend
E.G she has 45 ANZ SHARES @ 8.05 each. 45 * 8.05 = $362.25, then you'll need to work out how that income is assessed
you need to read the info about deeming and the assets and income test
trust me, all this stuff is in the book, don't stress, eat lots of chocolate, lie on your couch and read the book slowly
you really need to have a good read of the book. I failed this subject the first time, and have just passed it 2nd time round
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Old 28-08-2009, 04:51 PM   #10
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[quote=BB**;73417]
Quote:
Originally Posted by BB** View Post
Any time!
yes she has her share income so you need to work out each share and how much they are worth, then the dividend income etc that she gets. popping it into a table is a good idea and show all calculations fo everything.
also there is other income too, and you need to split as its in joint ac/s (50% share)
if you type in franked or fully franked shares into google, heaps of info comes up and will show you how to work the figures (I can't recall whether they're fully franked or not)
this is more Q3 stuff, but will assist in ou getting all the figure right for the end question which is usually worth the most points.
have a good weekend
E.G she has 45 ANZ SHARES @ 8.05 each. 45 * 8.05 = $362.25, then you'll need to work out how that income is assessed
you need to read the info about deeming and the assets and income test
trust me, all this stuff is in the book, don't stress, eat lots of chocolate, lie on your couch and read the book slowly
you really need to have a good read of the book. I failed this subject the first time, and have just passed it 2nd time round
sorry, so in answer to your question, yes, do work out the franked, or otherwise parts, do the whole sum.
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