Amy and Mike, a married couple, are considering retirement; they are both aged 65 and supply the following information: They jointly own their home worth $820,000 and have no debt. They have a car ($30,000), home contents ($20,000) and savings ($20,000). Amy’s superannuation is $260,000 (tax-free $52,000, balance from a taxed source). Mike’s superannuation is $180,000 (tax-free $36,000, balance from a taxed source). As ‘high growth’ investors, expected return on investments is 4.0% p.a. above the inflation rate (currently 3.0% p.a.). They WANT $44,000 p.a. after tax to meet their living costs. tax rate is 3% a) calculate cash flow for retirement and the capital adequacy ratio for retirement . b) Discuss Amy and Mike’s risk tolerance relative to the ‘draw-down’ phase
Amy and Mike, a married couple, are considering retirement; they are both aged 65 and supply the following information: They jointly own their home worth $820,000 and have no debt. They have a car ($30,000), home contents ($20,000) and savings ($20,000). Amy’s superannuation is $260,000 (tax-free $52,000, balance from a taxed source). Mike’s superannuation is $180,000 (tax-free $36,000, balance from a taxed source). As ‘high growth’ investors, expected return on investments is 4.0% p.a. above the inflation rate (currently 3.0% p.a.). They WANT $44,000 p.a. after tax to meet their living costs. tax rate is 3% a) calculate cash flow for retirement and the capital adequacy ratio for retirement . b) Discuss Amy and Mike’s risk tolerance relative to the ‘draw-down’ phase
Chapter6: Deductions And Losses: In General
Section: Chapter Questions
Problem 34P
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Amy and Mike, a married couple, are considering retirement; they are both aged 65 and supply the following information:
- They jointly own their home worth $820,000 and have no debt.
- They have a car ($30,000), home contents ($20,000) and savings ($20,000).
- Amy’s superannuation is $260,000 (tax-free $52,000, balance from a taxed source).
- Mike’s superannuation is $180,000 (tax-free $36,000, balance from a taxed source).
- As ‘high growth’ investors, expected return on investments is 4.0% p.a. above the inflation rate (currently 3.0% p.a.).
- They WANT $44,000 p.a. after tax to meet their living costs.
- tax rate is 3%
a) calculate cash flow for retirement and the capital adequacy ratio for retirement .
b) Discuss Amy and Mike’s risk tolerance relative to the ‘draw-down’ phase
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT