The Smith family represents a typical Australian household, comprising two adults in their mid$-30$s$,$ Mr$.$ and Mrs$.$ Smith, and their $8-$year$-$old child, Peter. Mr$.$ Smith owns a successful IT consulting business with an after$-$tax annual income of $$160,000,$ while Mrs$.$ Smith works part$-$time as a music teacher, earning $$40,000$ after$-$tax per year. They reside in a desirable suburb, in a four$-$bedroom house recently purchased for $$1\mathrm{.}2$ million, financed with a $25-$year mortgage loan of $$600,000$ at an annual interest rate of $6\mathrm{.}7\%.$ The family also has a credit card debt of $19\%$ p$.$a$.,$ amounting to $$20,000,$ and a five$-$year car loan of $10\%$ p$.$a$.,$ totalling $$30,000.$

The Smiths enjoy a comfortable lifestyle, with monthly living expenses of $$3,500$ for each adult and $$1,700$ for Peter. They are financially prudent, consistently contributing to their superannuation funds$$Mr$.$ Smith has accumulated $$500,000,$ while Mrs$.$ Smith's balance stands at $$300,000.$

Their current life insurance coverage amounts to $$400,000$ for Mr$.$ Smith and $$50,000$ for Mrs$.$ Smith.

Presently, Mr$.$ Smith is contemplating the family's financial future, intending to allocate $$70,000$ for Peter's university education fund and $$25,000$ for emergencies.

Mr$.$ and Mrs$.$ Smith are reviewing their insurance coverage, debt situation, and investment strategies and seek your advice.

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Their superannuation portfolio $($combined$)$ is as follows: $$Cash equivalents: Average return $(\%)3\mathrm{.}50,$ Allocation $($$$)252,300$

Domestic bonds: Average return $(\%)7\mathrm{.}50,$ Allocation $($$$)221,500$

Domestic equities: Average return $(\%)14\mathrm{.}10,$ Allocation $($$$)25,230$

International bonds: Average return $(\%)8\mathrm{.}60,$ Allocation $($$$)171,740$

International equities: Average return $(\%)18\mathrm{.}90,$ Allocation $($$$)7,530$

Real estate: Average return $(\%)9\mathrm{.}80,$ Allocation $($$$)121,700$

Total: $800,000$

Review their superannuation portfolio and assess whether the asset allocation suits the family, considering their investment time horizon. If an adjustment is deemed necessary, please propose an alternative asset allocation.