[ Qe T(W T Y Bookmarks (&} @ File B zoom ) 3 @ LR SN /Users/abdulbarrie/Downloads/Adeyemi%20Case%20Narrative.pdf Q Im} @ AKTS Online Regis... Chapter 12 A&P R... Flashcards - Chap... bus 110 i E-Library eV A= ET T o I Adeyemi Case Narrative.pdf 7% + | @O Kwame and La Adeyemi Atthe age of 36, Kwame Adeyemi recently finished his cardiology fellowship program and finally, after years of intense and expensive training, became licensed to practice medicine as a heart surgeon. With that came an overnight increase in his income from $62,000 to $475,000 a year. Kwame is admittedly not used to his new financial standing. How successful his life was turning out still feels unreal to him, a son of immigrants from Ireland and Ghana. As with most young doctors, his professional training dominated his life for years, leaving him little time or energy to take stock of where he was and where he was going, financially. He readily admits that he doesn't know much about how to manage his money. Kwame's wife Laticia is a blessing in his life. Ever since they met at a medical conference 3 years ago and fell in love, she's always grounded him and gave him a clear sense of direction. At 31 years old, Laticia has an exciting and demanding career of her own. She is a molecular biologist with Pfizer, a pharmaceutical company, making $113,500 a year. They are in a loving and committed relationship and look at all their finances as joint money. Family Planning Recently, Laticia felt an increasing desire to start a family. After some discussion and contemplation, the Adeyemis decided to try to have a child, although neither of them is clear about what that change would mean for them financially, and what level of disruption their careers might see. Aweek ago, Laticia found out she was pregnant. With their busy careers, and now with a kid on the way, kwame and Laticia realized they needed financial advice. They came to your financial planning practice for help sorting out where they stand financially, where they should be going, and how to get there. Liquid Assets Kwame has $5,000 in his checking and $67,200 in a bank money market account yielding 0.5% per year. Laticia has $4,300 in her checking account. Home and Mortgage - - Laticia came into the relationship owningaco-op 0 apartment, where they both currently live. They love it. There's enough space, even after the baby arrives. In about 7 years, when it's time for their future kid to go to school, they think they might want to move to a quieter neighborhood, perhaps even out to the suburbs. They'll worry about that when the time comes. The market price of the apartment is estimated at $882,000. Laticia initially borrowed $650,000 to buy it; she currently owes $393,000 on the mortgage. It's a 30-year fixed rate mortgage; the monthly payment (principal and interest) is $2,973. Laticia doesn't remember what the interest rate is, but they both agree they want to pay off the mortgage as soon as they can, feeling that owning real estate outright is the surest way to financial security. Kwame and Laticia have been diligent trying to pay more than they have to, and they plan to keep doing that. Their monthly apartment maintenance is $700. Real estate taxes are billed at 0.8% of the value of the apartment per year, and homeowner's insurance premiums are $900 a year. FriJan 5 2:38 AM Finish update @ Chrome File Edit View History Bookmarks rofles Tab Window Help R zoom ) 3 @ @ | Uplc x | W Ade x ) TS ; - CY I & FIN @ @ File /Users/abdulbarrie/Downloads/Adeyemi%20Case%20Narrative.pdf Q Im} 1 Gmail LR (T [VoT) Al Maps @ AKTS Online Regis... keg Library Chapter 12 A&P R... % Flashcards - Chap... bus 110! i E-Library " CUNY Baruch Coll... Adeyemi Case Narrative.pdf bl 73% + (=] 0:) Living expenses Laticia and Kwame barely buy any groceries, maybe $200 worth a month. They eat out or get food delivery roughly 6 days a week, spending $45 to $60 on each of those days. Their utility bills are $270 a month. Clothing expenses are $250, transportation is $300, entertainment is $100, and other miscellaneous expenses are $1,000 amonth. Despite their busy schedules, they try to take one annual vacation together, spending $5,000 in total. With Kwame's increased income, they also recently bumped up their charitable donations to $700 a month. Taxes Having high incomes, the Adeyemis' taxes are also high, although they hope their mortgage and charitable donations will help lower their taxable income significantly. Their federal income tax has not been calculated yet they hope you can help them with that. New York State and City income tax total is expected to be $46,000 a year. In addition to income taxes, their Social Security taxes total $17,490, and Medicare taxes are $11,379 for the year. Student Loans Kwame just consolidated his student loans at 6.25% interest rate for 10 years. His monthly payment is $3,009. Laticia's current student loan balance is $63,000. Her monthly payment is $1,008, and the interest rate is 3.9%. Employee Benefits Kwame works at South Brooklyn Health (formerly Coney Island Hospital), part of NYC Health + Hospitals Corporation. Doctors there are unionized, and the Union dues are 1.6% of pay. Employees get subsidized health insurance coverage - Kwame's share of premiums to cover his family is $95 per weekly paycheck. Disability, vision, and dental insurance are all provided at no cost to employees. Investments and Retirement Planning NYC Health + Hospitals employees can participate in the New York City Deferred Compensation Plan (NYC DCP). The plan has both a 401(k) and a 457 components, both of which kwame can max out every year, if he wanted to. He has heard from colleagues that the 457 plan is better (he doesn't know why), so he set up his contributions recently to max it out every year. His current balance in the plan is $13,000, and he has been contributing to the Traditional option only. He also has a Roth IRA, where his current balance is $37,000. Laticia has been contributing $4,000 a year to her Pfizer's Roth 401(k) lately, and has accumulated $52,000 in it. Pfizer provides a generous dollar-for-dollar match of employee contributions up to 4.5% of their compensation. This matching contribution goes into the Traditional type of account; her current balance there is $14,400. Kwame and Laticia are somewhat more conservative investors than most others their age. They understand they need significant equity exposure to achieve a better long-term return, but they get nervous when their investments go down in value. The Adeyemis plan to retire and start receiving their Social Security benefits at the same time, when Kwame is 67 and Laticia is 62 years old. Their monthly Social Security retirement benefits at those ages in today's dollars are estimated to be $3,700 for Kwame and $2,000 for Laticia. They think their retirement expenses in today's dollars will be 70% of their total cash outflows now. Other than Social Security, they will rely only on their retirement accounts to meet their retirement expenses. For planning purposes, they want to assume they will die in the same year, when Kwame is 95 and Laticia is 90 years old. FriJan 5 2:38 AM Finish update @ Word File Edit 3 (13, 3 E'DV Insert