Fran and Ed Blake’s main financial planning issues that need to be addressed are education planning for their two children and the inflation risks, the unexpected responsibility of caring for an aging parent in a long-term care facility, and the concern for saving for retirement. Patrick Hamilton has an immediate financial planning issue that resulted from and income risk of losing his job. While he saved an emergency fund, he only saved for three months; therefore, his actions from this point for need to be very particular. Nina Resendiz is a young woman that is overwhelming herself with ideas for the recent $12,000 gift. The most pressing issue that stood out about her situation was the credit card debt and she mentioned being worried
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First, I would need the current interest rate on their savings and investment funds to figure their time value of money. I would need to know the education costs as well as in estimated annual inflation percentage rate. I would also weight the options and research low interest rate student loans versus overextending my finances. Secondly, we know the amount the medical facility costs each month, as well as the estimated annual increase; however, how much is Fran’s mother contributing? Lastly, the Blake’s are considering accessing some money from their retirement fund. They have been consistently depositing annual deposit into their retirement fund; therefore, what is the current balance in the fund and the present rate of return? I need to calculate the future value amount to demonstrate the amount they would lose if they chose to discontinue their deposits. Also, if they were to withdrawal the money, what is the financial penalty for early …show more content…
The choice to cease deposits or withdraw early from the fund could be an excessive opportunity cost, but they could still contribute to their retirement by seeking an alternative route for the children’s education. The education costs are guaranteed to rise, which will increase the financial burden of trying to save for the cost. The Blake’s children may need to look into a cheaper school to make the present savings stretch. If not, then low-interest rate student loans are always an option; plus payments can be deferred, which would allow to them to assist the mother with her expenses for the time being. They should research facilities for their mother that would fit her budget as
First, I would need the current interest rate on their savings and investment funds to figure their time value of money. I would need to know the education costs as well as in estimated annual inflation percentage rate. I would also weight the options and research low interest rate student loans versus overextending my finances. Secondly, we know the amount the medical facility costs each month, as well as the estimated annual increase; however, how much is Fran’s mother contributing? Lastly, the Blake’s are considering accessing some money from their retirement fund. They have been consistently depositing annual deposit into their retirement fund; therefore, what is the current balance in the fund and the present rate of return? I need to calculate the future value amount to demonstrate the amount they would lose if they chose to discontinue their deposits. Also, if they were to withdrawal the money, what is the financial penalty for early …show more content…
The choice to cease deposits or withdraw early from the fund could be an excessive opportunity cost, but they could still contribute to their retirement by seeking an alternative route for the children’s education. The education costs are guaranteed to rise, which will increase the financial burden of trying to save for the cost. The Blake’s children may need to look into a cheaper school to make the present savings stretch. If not, then low-interest rate student loans are always an option; plus payments can be deferred, which would allow to them to assist the mother with her expenses for the time being. They should research facilities for their mother that would fit her budget as