SEE ATTACHMENTS FOR FULL DIRECTIONS
N 321 Personal Wealth Building
Financial Plan Exercise using Financial Planning Software
INSTRUCTIONS
Attached please find the case study of James Wilson and Harold Newton. James and Harold are a same-
sex
couple and that
have been together for seven years; they both live in the house that Harold owns.
Harold has inherited money in a generation-
skipping
trust from his mother; the
trust allows for distributions for
health, education, maintenance, or support
. Most
years, Harold has not taken withdrawals f
rom
this account
.
The
trust reverts to Harold’
s brother at his death if he has no children. Harold has a w
ill that leaves e
veryth
ing
to his parents; Harold has a power
-of-attorn
ey and health care pow
er-of-attorn
ey that name
s his
father as
attorney
-in-fact. Harold runs a successful consulting practice out of his
home. Harold states that he is fai
rly
aggressive,
and his investment account is almost entirely (90%) equity investments.
James has no estate documents. James contributes $3,000/year to his 401(k), just enough to obtain the
maximum matching contribution offered by his employer. In contrast, Harold contr
ibutes $10,00
0 / year to his
SAR SEP IRA
James and Harold live a fairly extravagant lifestyle of dining
out and vacations, funded primarily from Harold’s
income and assets. However, James still provides the primary support for his basic living needs.
Neither James nor
Harold has any life or disability insurance.
James
is the beneficiary of Harold’s SAR SEP IRA
.
James’ sister is the b
eneficiary of his 401(k)
The primary residenc
e mortg
age is a
5/1
ARM 30
-year loan
and w
as has
taken out exactly 2 years ago. H
arold
has made 24 payments at a rate of 7.25%
.
James is currently
paying a 16.99% annual interest rate on his credit card debt.
GOALS
1. Save for retir
ement
2. Provide for each other in the event of death.
NEXT
Using the information attached about James and Harold create a financial plan using MoneyGuide Pro
(see
below
and attached for directions.)
.
QUESTIONS
Based on your MondeyGuide Pro financial plan for James and Harold:
1. Summarize the
MoneyGuide Pro recommendation
2. Do you agree with the recommendations?
3. Would
you
suggest they lower their risk tolerance?
4. How would you reallocate Harold investments
? (currently they are 90% equity)
5. How would you implement t
he recommendations? (prioritizati
on, time, money)
6. In your opinion, how often should the financial plan of Harold and James be monitored?
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