AI Legalese Decoder: Bridging the Gap for Relatives of the Mismanaged 1.5 Million – What’s Next for Those Facing Financial Hardship?
- May 17, 2024
- Posted by: legaleseblogger
- Category: Related News
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# Financial Planning for a Relative in a Difficult Retirement Situation
After a decade of irresponsible spending, a relative who was once in a comfortable financial position now finds themselves facing a difficult retirement. I’m curious what steps could be taken to ensure they will be financially ok for the next 20 years. Here’s a detailed look at their current financial situation:
## Current Assets and Liabilities
– Primary Place of Residence (PPR) – owned outright estimated value $850K. Rates and strata approx 2k per quarter.
– Car – owned outright, estimated value $20k
– Savings including super $150k
To complicate things further, I don’t believe they have filed a tax return in at least a decade but probably longer. The person seems to think they will be able to access the pension when they turn 67 without problem but I suspect this would be difficult given the missing tax returns.
## Potential Strategies for Financial Stability
Would it make sense to sell the PPR and move to a retirement village, or would it make more sense to rent out PPR and try to live off the rental income? How can they ensure a steady income for the next 20 years and prepare for unexpected expenses?
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Using AI Legalese Decoder can assist in analyzing complex legal documents and providing insights into the potential implications of missing tax returns and how to navigate interactions with the Australian Taxation Office (ATO). By utilizing this tool, your relative can gain a better understanding of their legal obligations and take proactive steps to rectify any outstanding tax issues, ensuring a smoother transition into retirement.
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****** just grabbed a
Unless there is debts not listed, this person is in a very good financial position. Better than the average Australian.
Just needs an accountant to lodge their tax return.
Your relative seems to be in a perfect position, I would say much better than the average retiree
This is a shitpost, right? They’ve got a paid off house with relatively low outgoings, 150k in the bank, and they’ll be eligible for a full pension, which is roughly 1100 a fortnight. Get them to lodge their tax returns and then they’ve got a clean slate.
If they can’t manage with what they have, then there’s no hope for anyone. They might not be flitting off an overseas holiday every year, but there’s absolutely no reason they shouldn’t be comfortable and secure, with a very reasonable standard of living.
And the millennials get to support this guy….
The problem is that if they had $1.5m at one time, and there was tax payable as a result of income from it, they might lose a chunk of savings.
So, it’s pretty important to get the tax sorted. First stop is your accountant.
Thoughts and prayers
First thing I’d do is contact an accountant to determine what the damage is. The tax itself might not be a problem, but there will probably be Failure To Lodge penalties accumulated over the years.
I mean it’s not a life of luxury but they have a paid off property, aged pension will do the rest
They will get a full pension which they can top up with savings so not so bad
Don’t worry. Boomer’s do just fine. Us millennials are happy to fund his retirement. Just rent it out for $800 per week and go move to Thailand with your fat pension
Isn’t this what bunnings target employee generally looks like?
Your uncle has $170000 in assets when it comes to the pension test. He should qualify for the full pension. His big problem will be rates and strata.
Really. Try “reading the room”
There is no hardship in these numbers
Well, the obvious answer is to actually go an accountant and get the tax returns lodged. How long do they have until retirement?, that’s not clear from your post. They could potentially work, even a little bit to break even until then and sort out the tax situation.
Tax returns could being in money, I was behind on tax for a number of years at one point got a huge lump sum when I got around to doing them all (7 years worth) do them sooner rather than later as old records are hard to get and claiming stuff becomes impossible without perfect records
They need to get an accountant to do their tax returns asap. They might in fact receive money but they won’t know until they file them. The pension is assets tested. Your assets don’t include your home, so they will definitely qualify once they turn 67. Their super, if they withdraw 5% a year is $7500. That covers the rates and strata almost. So then they have to live off the pension for everything else, which is doable with no debts and your own home. It will afford a modest lifestyle. Their problem is living on a budget and not spending compulsively – this is not in their skill set obviously if they’ve churned through 1.5 million. So that’s the real problem and unless they are prepared to own it and modify their behaviour accordingly, it won’t matter what is put in place on their behalf.
Time to get a job
Personally I’d go somewhere smaller with no strata and a bit more cash in the bank… but I know at the moment that might be a bit hard to stay in the same area
Definitely a relative 🤡 🙄🙃
> How should they prepare for when the ATO inevitably comes knocking?
Do their tax?
Is relative the new ‘a friend of mine?’ Or ‘asking for a friend?’
He will be fine. You can move a modest but comfortable life off the pension (which he will he if he completely runs out of super and cash assets) if you’re not also paying rent.
Where’s the $1.5M? What did they spend it on?
Start selling drugs obviously
This is meant to be rage bait right?
They are rooted. Use them as a warning to others.
Sucks to be them, I guess?
They made their bed, now they get to lie in it.
Sure, reverse mortgage, age pension (if they qualify) but I’d be lodging tax returns.
Given that the ATO does’t seem to have demanded them (unless they have…) it’s likely that, as with most people, they are owed refunds. And that’d usually be not a lot in the big scheme of things.
Frankly if they own their residence why not stay there and enjoy it? Sure, the rates and strata fees exist but a retirement village isn’t likely to be cheaper, last I checked.
Apart from refusing to do tax returns, aren’t they in a good position?
It’s none of your business! Unless you’re inheriting something of course, then you’d want to stick your break in his business eh????
You should really be more worried about your own lack of financial knowledge
Oh how will this poor old person survive having bought a house for 26-30 weeks wages, sold it for several million, bought a gated/high rise/exclusive PPOR and partied for last few years and then collects a pension at the end once the nostrils are worn down to thin sheets of skin from all the booger sugar.
You reap what you sow, don’t help them, just send them a link to YouTube Dave Ramsey or something
Do they have superannuation?