Personal Finance Analysis

• Bert 42 years of age

• Cathy 38 years of age

• Three children

o Cecily (5)

o Naomi (7)

o Nyah (9)

• Employment:

o Bert 5 years

o Cathy 10 years

• Goals

o Early retirement in 13 years

o Education funding for 3 children

• Combined annual income of $222k

• 23K monthly expenditures

• Insurance:

o Auto, disability for Bert and Cathy, home, medical, Life; 31K in total annual premiums

o Life Insurance details and considerations:

 Bert has a 20yr Term at 1M and a Variable at 850K,

 Cathy has a Term at 750K and a Variable through work currently at 90K;

 Amount needed (for Bert) if death occurs today is 1.4M,

 Amount needed (for Cathy) in death occurs today is 2M

o Disability Insurance details and considerations

 Amount needed monthly if Bert is disabled - 14K

• Assets

o Investment Assets

 28K in income accounts

 170K in equity accounts

 171K in 401k

 22K in IRA

 67K in other accounts

o Other Assets:

 975K in two homes (one of which is a vacation home),

 22K in two cars

• Liabilities

o 674K in 2 mortgages

• Net worth: 782K

• Investments and Asset Allocation

o 69% US Stock

 52 % of this is Large cap

 22% Medium

 26% Small

o 17% Foreign Stock

o 6% in Emerging Markets with most in LATAM

o 8% FixedIncome - 100% in high quality, interim length bonds

Retirement

The goal of retiring young for Bert and Cathy is unattainable based on current income, expenditures, and assets as well as projections for income needs in retirement. The $3.5 million shortfall needed at retirement age for retirement needs can be achieved through only through increased income during the last 13 years of contribution time frame, a $73k annual decrease in expenditures, or working an additional 12 years past the desired retirement age.

The recommendation to realize the retirement goal would be a compromise across expenditures, retirement age, and other financial goals.

To decrease expenditures it is recommended to sell the...