Personal Finance Plan Assignment Help
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Read newspaper or magazine articles to determine what expenses are likely to increase and decrease during retirement. How might this information affect your retirement-planning decisions?
Which type of housing will best meet your retirement needs? Is such housing available in your community? Make a checklist of the advantages and disadvantages of your housing choice.
Using the Internet to obtain information about wills. Visit Metropolitan Life Insurance Company’s website at www.lifeadvice.com. Using this information, prepare a report on the following:
Who needs a will?
What are the elements of a will (naming a guardian, naming an executor, preparing a will, updating a will, estate taxes, where to keep your will, living will, etc.)?
How is this report helpful in preparing your own will?
Visit the Prudential Insurance Company of America website at http://www.preparewithpru.com/challenges/estate-planning/index.php. Gather information on various estate planning topics such as an estate planning worksheet; whether you need an estate plan; when to update your plan; estate taxes, wills, executors, trusts, etc. Then prepare a report to help you develop your estate plan.
Planning for Retirement: Is a bad day fishing better than a good day at the office? Yes, according to a retired dad, Chuck. With his company pension, at least he didn’t have to worry about money. In the good old days, if you had a decent job, you’d hang on to it, and then your company’s pension combined with Social Security payments would be enough to live comfortably. Chuck’s son, Rob, does not have a company pension and is not sure whether Social Security will even exist when he retires. So when it comes to retirement, the sooner you start saving, the better.
Take Maureen, a salesperson for a computer company, and Therese, an accountant for a lighting manufacturer. Both start their jobs at age 25. Maureen starts saving for retirement right away by investing $300 a month at 9 percent until age 65. But Therese does nothing until age 35. At 35 she begins investing the same $300 a month at 9 percent until age 65. What a shocking difference! Maureen has accumulated $1.4 million, while Therese has only $553,000 in her retirement fund. The moral?
The sooner you start, the more you’ll have for your retirement. Women especially need to start sooner, because they typically enter the workforce later, have lower salaries, and, ultimately, lower pensions. Laura Tarbox, owner and president of Tarbox Equity, explains how to determine your retirement needs and how your budget might change when you retire. Tarbox advises that the old rule of thumb that you need 60 to 70 percent of preretirement income is too low an estimate. She cautions that most people will want to spend very close to what they were spending before retiring. There are some expenses that might be lower, however, such as clothing for work, dry cleaning, commuting expenses, and so forth. Other expenses, though, such as insurance, travel, and recreation, may increase during retirement.
Questions:
In the past, many workers chose to stay with their employers until retirement. What was the major reason for employees’ loyalty?
How did Maureen amass $1.4 million for retirement, while Therese could only accumulate $553,000?
Why do women need to start early to save for retirement?
How is net worth determined?
What expenses may increase or decrease during retirement?
Exercises:
In 2013, Joshua gave $14,000 worth of XYZ stock to his son. In 2014, the XYZ shares are worth $25,000.
What was the gift tax in 2010?
What is the total amount removed from Joshua’s estate in 2014?
What will be the gift tax in 2014?
Joel and Rachel are both retired. Married for 50 years, they’ve amassed an estate worth $2.4 million. The couple has no trusts or other types of tax-sheltered assets. If Joel or Rachel dies in 2008, how much federal estate tax would the surviving spouse have to pay, assuming that the estate is taxed at the 45 percent rate?
Shelly’s assets include money in checking and savings accounts, investments in stocks and mutual funds, and personal property, including furniture, appliances, an automobile, a coin collection, and jewelry. Shelly calculates that her total assets are $108,800. Her current unpaid bills, including an auto loan, credit card balances, and taxes total $16,300. Calculate Shelly’s net worth.
When Jamal graduated from college recently, his parents gave him $1,000 and told him to use it wisely. Jamal decided to use the money to start a retirement account. After doing some research about different options, he put the entire amount into a tax-deferred IRA that pays 11 percent interest, compounded annually. Calculate how much money Jamal will have in his IRA at the end of 10 years, assuming that the interest rate remains the same and that he does not deposit any additional money. Show your calculations in the form of a chart.
Calculate how much you would have in 10 years if you saved $2,000 a year at an annual rate of 10 percent with the company contributing $500 a year.
