CASE STUDY
David (45) and Sarah (43) are married with two independent children. David is a project manager with a large construction company and currently earns $120,000 per annum whilst Sarah works part-time at a coffee shop and earns $35,000 per annum. Both David’s and Sarah’s employment is secure and they are not anticipating any major changes.
Both employers contribute the regular 9% (SGC) into each of their independent superannuation plans and David’s employer allows their staff to enter into a salary sacrifice arrangement. To date, David has $175,000 accumulated in his company superannuation fund whilst Sarah has a current superannuation balance of $75,000.
They have recently moved into a beautiful apartment that they bought for $475,000. They have a mortgage of $155,000 (20 yr P&I) and contribute $15,453 per annum in principle and interest repayments. They do not want to use the equity in their home to secure additional investments.
They have a goal to be debt free within 20 years ... about the time when David would like to retire on an on-going income stream of at least $80,000 per annum (in today’s dollars).
They are disciplined budgeters and have two primary financial goals, David and Sarah would like to:
- maximize their retirement income by implementing an effective investment strategy (without the need to use the equity in their home) and
- reduce their tax liability.