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Without a Financial Plan



John & Mary’s Situation at retirement age 65

PER ANNUM INCOME (today’s $$)
$AMOUNT
Superannuation Income
(not reviewed in their lifetime)
7,000
Interest on Cash savings
2,000
Dividends from Blue Chip shares
1,000
Interest on Fixed Term Deposit savings
3,000
TOTAL
13,000
ASSETS
$AMOUNT
Superannuation
140,000
Home
600,000
Investments (Blue Chip Shares)
20,000
Cash savings
40,000
Fixed term deposit savings
60,000
TOTAL
840,000

*John and Mary are reasonably asset rich but they would still be dependent on the aged pension to supplement their income in retirement. Their standard of living would be very frugal.


With a Financial Plan



John & Mary’s Situation at retirement age 65.
With a financial plan taken out at age 32 & 30 respectively:

PER ANNUM INCOME (today’s $$)
$AMOUNT
Superannuation (includes extra income from Salary Sacrificing)
32,000
Investment Property rent
12,000
Dividends from Managed Funds
7,000
Interest on Cash savings
1,000
Interest on Fixed term deposit
1,500
TOTAL
53,500
ASSETS
$AMOUNT
Superannuation
640,000
Home
600,000
Investment Property
350,000
Managed Funds
120,000
Cash Savings
20,000
Fixed Deposit
25,000
TOTAL
1,755,000

*John and Mary have significantly improved their asset position by taking advantage of superannuation to save and invest and also acquiring investments outside of superannuation such as Managed Funds and an investment property.

Their retirement income has significantly increased to an extent that they are able to enjoy a very comfortable lifestyle in retirement.