You are a graduate financial planner and have been sitting on client interviews with a more Senior Financial Planner. As part of this process you have been recording notes and collaborating on any strategy development with the Senior Financial Planner. David & Karen Rubble are new clients and have come to you early in the financial year seeking your advice in regards to their pending retirement. After a fact-finding session you uncover that David is 61 years old and is married to Karen who is also 61 years old. They are both employed. Karen works as a Nurse and earns a gross salary of $80,000 per annum. David is an engineer and earns a gross salary of $180,000 per annum. Their goal is to both retire within the next twelve months. They would like to receive a combined income of $80,000 in retirement to meet their living expenses. They wish to minimise tax both now and along the way and want to ensure their capital lasts throughout retirement and keeps pace with inflation. To some degree they would like to pass on some capital to their children and grandchildren.

Karen asked you Should we payout the home mortgage right now? David is thinking of keeping it going for some unknown reason. What do you think we should do? Youll need to come up with some good reasons to convince David as hes an Engineer and is very meticulous.

some degree they would like to pass on some capital to their children and grandchildren. Their assets are as follows: Assets & Liabilities Amount Owner Family Home $900,000 David Car- Mazda 3 (One year old) $40,000 Karen Car-2002 Toyota Corolla $1,000 David $500,000 Rental investment property, 101 Quarry Road Bedrock Town. Purchased in 2015 for $600,000 Joint ownership $100,000 Wilson Asset Managers Leaders Fund (Managed Fund) - Purchased in 2016 for $50,000 Joint ownership Cash Funds in Bank, earning 1.5%p.a. $145,000 Joint Nurses Super Fund of Australia (Balanced fund) $200,000 Karen XYZ Superannuation fund (Balanced Fund) $250,000 Karen ABC Superannuation fund (Balanced Fund) $700,000 David $2,836,000 Total assets Their liabilities debts are: Home Mortgage debt-HSBC Bank charging 4.0% $10,000 still owing-loan Joint p.a. Originally borrowed $560,000 repayments are $3,333 per month being $40,000 p.a. $40,000 Investment Loan for Wilson Asset Managers Fund Joint at 5% interest rate- Interest Only $300,000 interest only at Rental property debt 5% p.a. Joint Other information obtained: They receive rent from the property of $18,000, have $4,000 a year in associated running costs and $3,200 in fully franked dividends from the Managed Fund. They are open to your investment advice and are considering selling the investment property and/or shares in order to clear their debt. They have indicated a preference for clearing the debt and maintaining the majority of their superannuation funds. some degree they would like to pass on some capital to their children and grandchildren. Their assets are as follows: Assets & Liabilities Amount Owner Family Home $900,000 David Car- Mazda 3 (One year old) $40,000 Karen Car-2002 Toyota Corolla $1,000 David $500,000 Rental investment property, 101 Quarry Road Bedrock Town. Purchased in 2015 for $600,000 Joint ownership $100,000 Wilson Asset Managers Leaders Fund (Managed Fund) - Purchased in 2016 for $50,000 Joint ownership Cash Funds in Bank, earning 1.5%p.a. $145,000 Joint Nurses Super Fund of Australia (Balanced fund) $200,000 Karen XYZ Superannuation fund (Balanced Fund) $250,000 Karen ABC Superannuation fund (Balanced Fund) $700,000 David $2,836,000 Total assets Their liabilities debts are: Home Mortgage debt-HSBC Bank charging 4.0% $10,000 still owing-loan Joint p.a. Originally borrowed $560,000 repayments are $3,333 per month being $40,000 p.a. $40,000 Investment Loan for Wilson Asset Managers Fund Joint at 5% interest rate- Interest Only $300,000 interest only at Rental property debt 5% p.a. Joint Other information obtained: They receive rent from the property of $18,000, have $4,000 a year in associated running costs and $3,200 in fully franked dividends from the Managed Fund. They are open to your investment advice and are considering selling the investment property and/or shares in order to clear their debt. They have indicated a preference for clearing the debt and maintaining the majority of their superannuation funds