1) Jim Brown has come to you for advice. He needs a solid strategy for retiremen
ID: 2742277 • Letter: 1
Question
1) Jim Brown has come to you for advice. He needs a solid strategy for retirement income planning. He and his wife Evann, both age 66 plan to retire next month. He has a monthly cash-flow need of $7,000 in pre-tax dollars. His company pension pays him $3,800/mo. He also has $1,000,000 in investment assets, all of which are in retirement accounts, and when distributed will incur ordinary income tax. Jim is in the 25% marginal tax bracket. In addition Jim’s PIA will be $2,000/mo and Evann’s benefit is 1,650/mo. What advice would you give Jim. Without their social security benefits, it appears that they have a $3,200 monthly income shortfall. What would you do to maximize household income for the Brown’s? 2) Same facts as above, except Jim tells you that his family Life Expectancy is 73, whereby Evann’s mother is currently 97 and her father passed away at 101.
Explanation / Answer
his savings upto 60 years ie first 2o years=> => $8584628
then next 5 years => $13612296
then again next 5 year => $21734254
He should expect to have in savings when he is 70 years old => $21734254
Answer b
friend plans to withdraw the money in 240 monthly installments starting at age 71, then monthly withdrawls would be => $181794
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