As a financial advisory firm, you have a network of centre of influences who recommend your firm to prospective clients. A prospective client named Lottie has been sent to you. Lottie is $52$ years old and divorced. Lottie is employed to conduct fitness classes for aged care homes residents. Her gross salary is $$65,000,$ plus $11\%$ SG contributions. In addition to investment income of $$1600,$ Lottie is left with a disposable income of $$6400$ p$.$a$.$ Lottie has one child who lives independently. She is renting a flat near where she works and has decided to sell the family home which is a two$-$ and half$-$hour drive from her work. Lottie has rented the family home for the last $8$ years, however, will sell the property and buy another one closer to her work.

From the client data collection form completed her assets include the family home worth $$700,000$ debt free; bank deposits of $$11,000$; managed share portfolio, $$32,000$; and superannuation of $$127,000$ invested in a balanced fund. The family home was purchased $21$ years ago for $$180,000$ and her tax agent has suggested she may not be able to claim a full exemption from capital gains tax $($CGT$)$ although may be exempt from CGT for the time it was used as a principal place of residence. After selling the family home, buying another property and paying all costs Lottie expects to have surplus funds of $$110,000$ to invest.

Lottie has come to your firm for some advice on how to best invest the funds. She is also concerned that she is underfunded for retirement and has asked you how much lump sum she needs in today$$s dollars assuming a retirement age of $67.$

As a senior financial planner, you have asked your associate financial adviser who attended the client meeting, to analyse the personal and financial information collected from Lottie at that 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.

Required

a$)$ Identify potential investment and insurance products that may be suitable for Lottie. Justify your selections.

b$)$ i$.$ What issues should be raised with Lottie from the initial meeting, which may or may not have been addressed?

ii$.$ In order to reduce costs, are we able to provide Lottie with an ROA detailing strategies and recommendations? Explain.

iii. Determine Lottie$$s likely capital gains tax liability if she sells the property using the CGT discount method.

iv$.$ 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.

v$.$ If Lottie decides to salary sacrifice an amount of $$27,500$ into her superannuation fund, what would be the tax consequences for both her employer and her?

vi$.$ What lump will Lottie 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 $2\%.$