Ryan (age 50)is an executive at a closely-held corporation focused on sales. His salary is $100,000. Tiffany (age 50) is an administrative assistant and has a salary of $50,000.  They have one child: age: 5. Ryan and Tiffany have been married for twenty years.

Long-term Goals for the family:

The family estimates that the education cost will be $35,000 per year. They anticipate education inflation will be 6% and that they can earn 8% return on their investment.

The couple would like to retire at age 65 and would like to have $100,000(today's dollar) retirement income per year. Inflation =3%

Financial Statement Information:

Their income statement  shows  " Net discretionary cash flow" = (-$288)

Their Balance sheet shows the following numbers:

Total Current assets = $22,950

Total Investment assets= $441,697

Total Personal Assets = $285,000

Total assets= $749,647

Current Liabilities=$4,300

Long-term Liabilities= $192,550

Total Liabilities= $196,850

Total Networth= $522,797

Non-discretionary cashflow per month = $6,057.08

Insurance Information:

The family currently has adequate health, auto, and Home. Only Ryan has life and disability insurance.

 

Help the family with financial planning by answering the following questions:

1. Explain briefly  at least two financial planning approaches that you choose to use in analyzing and recommending a financial plan for the family

2. Does this family have an adequate emergency fund?

3. How much should the couple start saving every year in order to take care of their most important long-term goals( Retirement & Education); assume that the couple does not have any saving at present  towards their stated retirement goals

4. What strong recommendation ( short and long term)  would you like to give the couple based on the case information presented to you and family profile?