Question
Patricia and Greg Williams, both aged 67, have recently retired. In considering their retirement plans, Williams have decided to do an audit on their current
Patricia and Greg Williams, both aged 67, have recently retired. In considering their retirement plans, Williams have decided to do an audit on their current financial situation. On 1 July 2019, they both purchased lifetime annuities for $60,000 each. These provide a $6,000 pension each per annum. In addition, they held the following assets as at 1 July 2020: Home $750,000 Mortgage on home $100,000 Prepaid funeral $50,000 Term deposit at 5% $330,000 Managed fund $80,000 Direct shares $60,000 Rental property $350,000 Motor vehicles $40,000 Antiques $50,000 Jewellery $45,000 On 1 August 2020, the Williams decided to give $100,000 (i.e., $50,000 to each of their two children) to help them with the purchase of their first homes. Greg has decided to take a part-time job with his local art dealer and expects to earn $100 per week. The Williams have come to see you for advice on 3 August 2020. How are the lifetime annuities treated for the pension asset and income mean tests?
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