Question Must post first. Life Situation Financial Data Young Married Couple Pam, 30 Josh, 32 Two Children, ages 1 and 3 Monthly income $3,600 Living expenses $3,125 Assets $33,850 Liabilities $1,520 The Brocks now have two preschool-age children. Their household income has declined with Pam providing full-time care for the children. To compensate for their lower monthly income, Pam and Josh have cut back to spend money on basics only. As a result of this action, the Brocks have managed to pay down their liabilities over the past four years. The Brocks are considering purchasing a second automobile. Currently, Pam must drive Josh to the train station (creating many inconveniences for her and the children) if she wants to use the car for various business and education activities. Housing needs are changing for the Brocks as their family increases in size. At present, they pay $750 in rent for a two-bedroom apartment. To purchase a home for a comparable monthly payment, the Brocks would have to relocate farther from Josh's place of employment. With a second car and public transportation as available options, Pam and Josh are starting to consider this home purchase. Question 2: What strategies and research should they use to save on transportation costs while fulfilling family transportation needs?
Question Must post first. Life Situation Financial Data Young Married Couple Pam, 30 Josh, 32 Two Children, ages 1 and 3 Monthly income $3,600 Living expenses $3,125 Assets $33,850 Liabilities $1,520 The Brocks now have two preschool-age children. Their household income has declined with Pam providing full-time care for the children. To compensate for their lower monthly income, Pam and Josh have cut back to spend money on basics only. As a result of this action, the Brocks have managed to pay down their liabilities over the past four years. The Brocks are considering purchasing a second automobile. Currently, Pam must drive Josh to the train station (creating many inconveniences for her and the children) if she wants to use the car for various business and education activities. Housing needs are changing for the Brocks as their family increases in size. At present, they pay $750 in rent for a two-bedroom apartment. To purchase a home for a comparable monthly payment, the Brocks would have to relocate farther from Josh's place of employment. With a second car and public transportation as available options, Pam and Josh are starting to consider this home purchase. Question 2: What strategies and research should they use to save on transportation costs while fulfilling family transportation needs?
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RETIREMENT AND ESTATE PLANNING
| Life Situation | Financial Data |
| Pam, 48 Josh, 50 Children ages 21, 19 and 16 | Monthly income $6,700 Assets $242,500 Living expenses $5,600 Liabilities $69,100 |
| With two children in college, the brocks once again find their life situation changing. Compared to five years ago, their total assets have declined due to college expenses. The Brocksâ oldest child will graduate next year, but the youngest will enter college in a couple of years. The drain on the familyâs finances will continue. While the familyâs finances are adequate, both Pam and Josh are beginning to think more about retirement. Over the years, Josh has taken advantage of different career opportunities. Today his annual salary is higher than ever. However, his employment changes have resulted in a smaller pension fund than would have been available had he remained with the same organization. The current value of his pension plan is just over $115,000. The investment program he and pam started almost 10 years ago is growing and is now worth about $62,000. But they still worry whether they will have enough money to finance their retirement when Josh retires in 15 years. Pam and Josh should also be concerned with various estate planning actions. They have talked about a will and investigated the benefits of several types of trusts. However, they have not taken any specific actions. Questions Q1. What steps do the Brocks need to take to prepare for retirement? | |
