CASE STUDY Dina and Aaron have made an appointment with you to discuss their financial planning needs. Dina is concerned about her family's financial position. She is worried that their current investment allocation is unlikely to provide enough money for her family in retirement, specifically considering the Covid-19 pandemic. The COVID-19 pandemic has put a spotlight on the financial circumstances of families in Australia, and Dina's family is no exception. The couple has come to you for advice and has provided the following information. Personal details: Dina is aged 49 and Aaron is aged 47. They have been married 15 years and have two children, Himesh (age: 12 years) and Jenny (age: 10 years). Income and goals: Dina is a Chartered Accountant and is employed with a bank as an accountant. Aaron is a nurse in a local hospital. Dina and Aaron would both like to retire in 16 years' time when Dina celebrates her 65th birthday. Dina has decided to save into a Managed fund instead of directly investing in shares. Aaron believes direct investment in shares is better than investing in shares through managed funds. The couple have also provided you with the following information:

*The couple has elected to use the 24.608% rebate on a premium payment of private health insurance to determine the tax payable by Dina. Issues noted from the couple's notes The couple's assets are fully insured, their cars have 3rd party, fire and theft insurance and Aaron has a life insurance policy. Their employer contributes the standard superannuation guarantee amount into their super accounts. Dina advises that she has just been notified from her superannuation fund that her death benefit nomination is about to lapse. The imputed credit of $1,020 refers to fully franked dividends indicated in Dina's final dividend statement for the year. Pay as you go (PAYG) tax instalments for Dina amounted to $21,000 and for Aaron, it was $6,000.

QUESTION ONE (a) Calculate the tax payable by Dina and Aaron individually for the 2021/22 tax year. Show all your workings. (b) Explain the "salary sacrifice" tax planning strategy to the couple. Please explain how this is relevant to their situation (No need to provide calculations).

QUESTION TWO The couple is interested in understanding what is a "negative gearing" tax planning strategy, as they are planning to purchase an apartment for $400,000 in the CBD. The expected annual rent is $14,000. The expected annual costs of maintenance (including insurance, rates etc) of the apartment are $4700, while the interest costs on his loan will be $25,000 for the first year. (a) Explain the negative gearing concept using the above example with calculations. (b) Whose name should the investment property and mortgage be held in, and why would it be appropriate to take the benefit of negative gearing?

QUESTION THREE Aaron is worried about whether his superannuation fund will be large enough to support his retirement if he decides to retire today. He has $10,000 cash that he intends to invest in a term deposit. (a) Calculate the minimum amount of contributions Aaron's employer must make to his superannuation fund per annum, as his salary is $42,000. Explain what preservation age is, and why this is important when considering retiring. (b) An advertisement offers a fixed term deposit for 4 years with an interest rate of 4.8% p.a. compounded annually or a fixed deposit for 4 years with an interest rate of 4.65% p.a. compounded quarterly. Which one would he choose and why? (c) Explain to Aaron the advantage and disadvantages (two each) of investing in managed funds (equity) as compared to direct investment in equity.

QUESTION FOUR (a) Please explain to the couple the difference between term life and whole life insurance? Which insurance has higher premiums, and why? (b) What is the difference between 3rd party, fire & theft car insurance and comprehensive car insurance? Justify which is the most appropriate type of insurance for the couple.