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Personal financial planning - Essay Example

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Personal financial planning

Briefly explain what options are available to Jack with respect to the payment he will receive upon termination of his employment, including his superannuation balance. Calculate the resultant tax treatment of the payment with respect to those options.One of the best options jack could plan is to pay a small amount of future pre-tax salary to the investments. The plan for such investments would also help to pay for personal insurance to protect the family income.During this period Jack would have return of deposits amounting to $ 8000 and the return from superannuation as $ 1350. This could be deposited on long term basis and as the seven years are completed the amount could be added with the Marions return to meet their living expenses.At the present rates both Joe and Marion would require $ 55,000 to lead a very comfortable life. If this is the amount that the couples expect after their retirement then the they must have accumulated saving of $137500 at 4 % interest per annum. Their total savings is estimated as 4,36,000/- which doesn't include the superannuating benefits of both Joe and Morion.Even if these aspects are accounted the current position would be enough if they expect to support in the same manner in future. The cost of living certainly would enhance and hence the gaps that exist between the current estimate and actual expense in future would be very huge.The major benefit of transition to retirement provision is to receive a part of superannuation as pension while being involved with it. It would help to sail smooth into the retirement period while enjoying some tax related concessions available to pensions. The guideline for opting the transition to retirement varies from one scheme to another.
As an example, some of them specify that one's preservation age must be below 65 years and continues to be in workforce. And the government might not have specified the minimum or maximum hours that you might be working. One could collect the super as 'non-commutable account based pension". In some situations, the account holder is allowed to take a maximum of 10 percent only while being in a transition period. A minimum account balance, say $ 25,000/-, is to purchase some of the products designed for transition to retirement. Also, certain stipulations like minimum account balance of $ 1000/- is required in the account.

Part D
Describe two current legally accepted strategies that could be employed by the couple to enable them to maximise any Centrelink benefits in their final retirement.
The important areas that could be employed by the couple for planning the post retired life are
Age pension : This can chosen based on the qualifying age and also on certain test conditions like asset and income test.
Allowances are related to the people who are not presently in the workforce.
Commonwealth Seniors Health Care Card is anothet option for those who fail to qualify for the senior health care card.
Part E
Identify the two methods of nominating a beneficiary for superannuation members and the advantages and disadvantages of each. Outline the tax treatment of superannuation lump sum death benefits ...Show more


Briefly explain what options are available to Jack with respect to the payment he will receive upon termination of his employment, including his superannuation balance. Calculate the resultant tax treatment of the payment with respect to those options.

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Personal financial planning essay example
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