A new client is named Fiona, 51 years old and a widow. Fiona is employed to run exercise programs for youth groups. Her gross salary is $70,000, plus 10.5% SG contributions. Together with investment income of $1800, Fiona is left with a disposable income of $9200 p.a. She has a one child who lives independently. She is renting a flat near where she works and has decided to sell the family home which is two hour's drive from her work. Fiona has rented the family home for the last 7 years, however, will sell the property and buy another one closer to her work. 

Her assets include the family home worth $700,000 debt free; bank deposits of $15,000; managed share portfolio, $40,000; and superannuation of $130,000 invested in a balanced fund. The family home was purchased 21 years ago for $180,000 and her tax agent has suggested she may not be able to claim a full exemption from capital gains tax (CGT) although may be exempt from CGT for the time it was used as a principal place of residence. After selling the family home, buying another property and paying all costs Fiona expects to have surplus funds of $120,000 to invest. She has come to you for some advice on how to best invest the funds. Fiona is also concerned that she is underfunded for retirement and has asked you how much lump sum she need in today's dollars assuming a retirement age of 67.

You have asked your associate financial adviser, to analyse the personal and financial information collected from Fiona at the fact finding meeting. Then identify issues resulting from the analysis, potential products, together with those that have been identified below and address them in a written report to you in preparation for completing the Statement of Advice.

Required

Identify potential investment and insurance products that may be suitable for Fiona. Justify your selections.     

1. What issues should be raised with Fiona from the meeting, that may or may not have been addressed?
2. In order to reduce costs, are we able to provide Fiona with an ROA detailing strategies and recommendations? Explain.  
3. Determine Fiona's likely capital gains tax liability if she sells the property using the CGT discount method.
4. What are the advantages and disadvantages of contributing the proceeds into her superannuation fund? Are there any restrictions on the amount of the proceeds that can be contributed into her superannuation account this year? Discuss
5. If Fiona decides to salary sacrifice an amount of $27 500 into her superannuation fund, what would be the tax consequences for both her employer and herself?

What lump sum will Fiona need in today's dollars to fund her retirement assuming 60% of her final salary? Assume an interest rate of 5% on accumulation funds and inflation rate of 2%.