Planning your future Choice Case Study
Claudio and Maria were ready to start making their dreams reality...
The couple, who were in their early fifties at the time, had been clients of Choice Capital for a number of years already. They had almost paid off their home loan and had an investment property and share portfolio that were both ticking along nicely.
Like many people, they had worked hard over the years and had busied themselves with supporting their children's education and lesure activities, but had only vaguely dreampt about slowing down and dedicating more time to their own hobbies
However after their two adult children had flown the nest, and despite their seeming good financial position, they found themselves starting to panic about the prospect of retirement. Suddenly it didn't seem so far off. Would they really have enough? How much is enough? So when their financial planner called to touch base and suggest some changes to their investment portfolio, they realised it was time to actually sit down and start fine tuning their own future goals.
Before getting straight into suggested investment options, tax effective transition strategies and complex graphs that promised to predict their futures, Amanda asked the couple to think honestly about how they now viewed retirement. What age would they ideally like to stop working full time? What activities would they like to do once they have more time on their hands? Where did they see themselves living? What travel plans did they have? Would they like to be able help their children and their future grand children financially? .
Once everyone had a better idea of how the pair's golden years would ideally look, it was easier to project the regular income they would need coming in to maintain the lifestyle they had come accustomed too. We took into account the cost of everyday living expenses and their preferred leisure activities, as well as the lump sum savings they’d like to keep aside for bigger expenditures such as new cars, redecorating and longer trips. With those final figures and goals now in mind, we could work backwards and make suggestions for changes they could start making now in order to get there by their goal age of sixty five.
As they planned to gift or leave any proceeds from the eventual sale of their investment property to their children, we identified that there could be a gap in their superannuation savings if they continued to rely solely on their employers compulsory contributions. However now that their children were no longer fully dependant on them, they could afford to start making voluntary contributions directly from their salaries, which would not only bridge that gap but also offer additional tax benefits.
Also after taking a closer look at their current cash flow and making a few tweaks to their current expenditure, they will be able to clear the debt against their home within 4 years and start looking at other investment opportunities.
Over the coming years we will help them monitor their progress and continuingly review their end financial and lifestyle goals whilst optimising their strategies. We're determined to have them on that year long world cruise before they turn sixty five!