developing a plan to accomplish her financial goals
Today is November 4 2015 and Barbara Lane has come to you a financial planner for help in develo Show more Today is November 4 2015 and Barbara Lane has come to you a financial planner for help in . developing a plan to accomplish her financial goalsFrom your fact-finding meeting together you have gathered the following information. PERSONAL BACKGROUND AND INFORMATION Barbara Lane (Age 69) Barbara is a retired homemaker. She is a recent widow. Barbaras 70th birthday will be April 1 2016. Andrew Lane (deceased) Barbara was married to Andrew who died in February (2014) at the age of 69 after a heart attack. Andrews estate is in probate. Andrew was employed 46 years as a manager at XYC Co. Inc. before retiring at age 65. The Lanes They were married 50 years. Barbaras health is fair. The Lanes Children Barbara has two children from her marriage to Andrew: Ben (Age 50) and Bob (Age 49). Ben and Bob are each married employed and self-sufficient. The Lanes Grandchildren Ben and his wife Joni have one daughter Sarah (Age 18). Sarah is currently a senior in high school and will be a freshman at Rather University in the fall. The cost of tuition for Rather is currently $15000. Barbara would like to pay the university for Sarahs tuition for this year. As a graduation present Barbara is paying for Sarahs trip to Europe this summer. The cost of the trip is $3000. Bob and his wife San have one son Richard (Age 17). Richard is a junior in high school. Richard is in need of orthodontic work. Barbara is also considering gifting stock worth $13000 to Richard because she wishes to treat each grandchild equally. PERSONAL AND FINANCIAL OBJECTIVES Barbara wants to have sufficient income ($40000 per year in todays dollars including any Social Security benefits). Barbara will consider acquiring a smaller residence Barbara wants to explore long-term nursing home care alternatives (annual cost of a nursing home in todays dollars $40000). Barbara wants to donate to the American Cancer Society. Barbara wants to provide for her children and grandchildren. Barbara wants to pay Sarahs tuition ($15000). Barbara wants to gift stock to Richard ($13000) Barbara wants to pay for Richards orthodontic work ($6000). Barbara wants to send Sarah to Europe ($3000). ECONOMIC INFORMATION Inflation is expected to be 4% annually. There is no state income tax. A slow growth economy is expected and stocks are expected to grow at 9.5%. Bank lending rates are as follows: 15-year mortgages 6.5% 30-year mortgages 7.5% Secured personal loan 10.0% Life Expectancies from MDIB Table: AGE LIFE EXPECTANCY FACTOR 70 26.2 71 25.3 72 24.4 INSURANCE INFORMATION Life Insurance Irrevocable Life Insurance Trust (ILIT) Andrew created an ILIT 10 years ago. The only asset in the trust is a permanent life policy with a face value of $200000. The income beneficiary of the ILIT is Barbara (you decide on the income stream). She is also the trustee and has a general power of appointment over the trust assets. The remainder beneficiaries are the grandchildren. Health Insurance Andrew and Barbara were both covered under Medicare Part A. INVESTMENT INFORMATION Barbaras investment risk tolerance is low. INCOME TAX INFORMATION The Lanes filed as married filing jointly for 2014. Barbara and Andrew have always lived in a community property state. RETIREMENT INFORMATION Andrew had a pension with XYZ with Barbara designated as the beneficiary. The pension currently has a lump sum death benefit of $150000 (assume a federal/state combined tax bracket of 30%) . As the beneficiary Barbara can choose to receive a life annuity of $8000 annually or a lump sum payment from the pension. Barbara currently has an IRA with Andrew as the named beneficiary. Barbara is the named beneficiary on Andrews IRA. Both Andrew and Barbara began receiving Social Security benefits on their respective 66th birthdays. Andrews benefit for 2015 would have been $1200 per month and Barbaras benefit for 2015 was estimated to be $600 per month. GIFTS ESTATES TRUSTS AND WILL INFORMATION Andrews will left all probate assets to Barbara. The grandchildren are named as contingent beneficiaries (equally). Barbara does not have a will. FINANCIAL DATA Credit card debt* $20000 Cash 25000 Primary residence** 400000 Auto 18000 Savings accounts 20000 Stocks 20000 IRA 50000 Pension 150000 Furniture 77000 Vacation home*** 200000 *All liabilities are community property **Primary residence originally purchased for $110000 ***Inherited from Barbaras mother. Adjusted cost basis is $125000 INFORMATION REGARDING ASSETS AND LIABILITIES Primary Residence Purchased April 1 1968 Question; Assess how Barbaras financial position looks for retirement. Show less
“Looking for a Similar Assignment? Order now and Get a Discount!
The post developing a plan to accomplish her financial goals appeared first on Premium Academic Affiliates.
