Demographic Information
Benjamin B. Goode, born 6/15/1980, married to Karen A. Badd, born July 2, 1982. The couple has three children (Carl, born 1/12/2012; Susie, born 2/15/2014; and Edward, born 7/1/2017). Carl and Susie go to private school and are in summer camps each year. Edward is cared for by Karen’s mother until he begins school at age 4. They want to plan on saving $100,000 (in today’s dollars) for each child’s college education. Clients have no wills drafted. They have no prenuptial agreement.
Ben earns $98,000 per year gross plus 10% in an annual bonus, has a 401(k) plan and contributes 10% of his income. The company matches 50% up to 6%. His expected retirement age is 65 and life expectancy is 95.
Karen earns $18,000 per year as an office manager. She has a retirement plan and contributes 10% each year. The company matches 50% up to 6%. Her expected retirement age is 64 and life expectancy is 95.Benjamin and Karen are in the 18% income tax bracket.
Assets and liabilities:
Client estimates the current value of the house is $345,000. It was purchased on 9/29/2005 for $345,000 with a 30 year, 6.5% mortgage of $295,000 and $50,000 down payment. The homeowner’s association month fee is $325.00.
Ben has one credit card carrying $9,800 balance at 17% and he pays $250 a month. Karen has one 10% student loan of $37,500. She made her first payment on June 15, 2017 and will pay for 20 years.
They have two car payments – 1) a 2018 Honda Odyssey minivan, excellent condition, 8,756 miles, blue, purchased for $32,000, and financed $25,000 at 4.75% for six years starting on August 1, 2018. 2) a 2017 BMW 325i, excellent condition, 38,435 miles, beige, purchased for $53,000 and financed $45,000 at 3.75% for seven years starting on 9/1/17. The annual cost for insurance is $2,960 (1,250 Honda, $1,710 BMW). The deductible is $250 and the coverage is 100/300/50 for each car.
There is a $78,000 balance in Ben’s 401k plan and $27,000 in Karen’s. Their joint savings account has a balance of $12k. Ben has $25k in an IRA and Karen has $17k in her IRA. They own a Municipal bond mutual fund worth $26,000, jewelry worth $15,000, and household appliances worth $12,000.
Expenses
Food $925, dining out $625, gasoline for cars $175, school and day care 1,425 (will increase by $425 when Edward starts school), $10,200 a year on vacations, utilities $710, cell phones $180, cable and internet $140, life insurance $475 (a $425k policy on Ben which pays $325, and a $250k policy on Karen which pays $150), homeowner’s insurance $75, personal care $310, medical expenses $75, savings $450 in addition to 401k contributions, donations $500, summer camps cost $850 and will go up when Edward starts at age 5.
Client Goals:
1. Evaluate monthly and year expenses, they do not feel like there is enough income.
2. Provide for college for each of their children. The estimate costs will be about $35,000 for a four-year degree at a state university (being from out of state).
3. Retire with similar cost of living at age 66/65.
4. Provide for each other at the death of the spouse.
5. Update estate plans.

Financial Plan
We will be preparing a financial plan for this client that includes, but is not limited to, the following client reports
1. Net worth statement (you will need to create amortization tables)
2. Cash Flow statement (current and projected for 2022 when Edward starts school).
3. Capital needs analysis for each spouse
4. Capital needs analysis for retirement capital needs to retire at ages 70/68
5. Capital needs analysis for college costs. The children will attend state colleges costing $35k per year now and the costs increases by 6% per year
6. Estate distribution report
7. Provide at least three (3) financial planning recommendations for the family in each of the sections of the financial plan and at least two (2) positive observations in each area
Calculate the following ratios:
1. Debt Ratio
2. Current Ratio
3. Liquidity ratio
4. Debt payments ratio
5. Savings ratio
6. Cost of living at normal retirement age (65)

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