Retirement Plan Financial Plan the Client Is Essay

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Retirement Plan

Financial Plan

The client is a married male in his mid-twenties. It is projected that the client will graduate from college within the next year or so and immediately enter the workforce. The client's degree is in engineering and he is expected to land a well-paying job in a relatively short time. He and his spouse are currently childless but plan on having at least two children. The couple lives in an apartment but are plan on purchasing a house in whatever city the job is offered. The client comes from a long-lived family with the average family member living well into their eighties. The client wishes to pass on accumulated wealth without paying a large percentage in taxes to the government. The client plans on retiring at the age of 70, and will then travel and enjoy life with his spouse.

Current income needs are approximately $2,000 per month. This amount covers rent, utilities, food, clothing, transportation, entertainment, health insurance and incidentals. The client would like to save approximately $500 ($100 in emergency cash, $200 in mid-term investments, $200 long-term stocks and bonds) per month and would like to purchase a house right away. The client's parents have offered him a lump-sum of money to help him with the down payment for a house. Once a house is purchased future income will need to rise to approximately $3,500 per month from the current level of $2,500.

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As children are born, expenses will rise that will affect the income stream. The client would like to maintain a 10% savings rate based on the income stream.

2. The client was raised with conservative values and abhors the idea of debt. However, one essential item will have to be purchased that will have to be paid for through a loan. That item is a residence. The client plans on purchasing a modest home for approximately $200,000 or less. The down payment on the house will be 10% ($20,000) leaving a loan amount of $180,000. The client will pay this loan off in 15 years and will be able to get a percentage rate of 4%. The client's bi-monthly payments will be approximately $770.00 (1,540.00 per month) which includes PMI and taxes. This raises his current income needs to $3,500 from his current needs of $2,500. The client does not plan on making any other major purchases with debt financing.

3. Acquiring assets will be done with any additional dollars (above what is needed in current income). Since the client was raised in a debt-free home, that value has stuck with him and he will not be purchasing items unless he has the cash to pay for them. On the reverse side, disposing of assets will be taken in an.....

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"Retirement Plan Financial Plan The Client Is" (2013, February 12) Retrieved May 21, 2025, from
https://www.aceyourpaper.com/essays/retirement-plan-financial-plan-client-104316

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"Retirement Plan Financial Plan The Client Is" 12 February 2013. Web.21 May. 2025. <
https://www.aceyourpaper.com/essays/retirement-plan-financial-plan-client-104316>

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"Retirement Plan Financial Plan The Client Is", 12 February 2013, Accessed.21 May. 2025,
https://www.aceyourpaper.com/essays/retirement-plan-financial-plan-client-104316
   

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