1. Eden (she/her/hers) is a multi-racial 33-year-old and, for the first time in her life, she feels financially stable. Eden grew up in a low-income household and her family income continuously dipped below the poverty line. Her parents never invested any money and Eden was always skeptical of the financial industry, seeing it as something for people with a much higher income. She is now a college graduate, has a basic savings account with $10,000 and currently paid an annual pre-tax salary of $65,000. Consider 30% tax obligations on her annual salary including federal, state and FICA taxes. She has not started to save for retirement, as she is worried about paying off her $15,000 in student loans, which have an annual interest rate of 4.1%. Eden’s current company offers a 401k match of up to 5% of her salary, but she isn’t sure how much she should invest and which type of 401k will match his financial goals. She has monthly expenses total up at $2,500. She has a number of credit cards that she pays regularly. Since she has an erratic work schedule, she has also had trouble paying her bills on time. This impacted her credit score. Eden knew that her friends had used Morningstar research to use personal finance help, so she decided to try to use Morningstar.com to help her. Consider the financial challenges your client may face based on the details provided in their profile. Use age 62 for retirement and age 85 for death.
1. Please list out the financial challenges that your client currently faces. At least 4.
2. Use the financial challenges you identified for your client and answer 2a and 2b.
2a. Propose improvements that should be implemented in order to meet the client’s financial goals. Be very specific. Without the SMART (specific, measurable, attenable, realistic, timely) approach you will not earn points toward your final. Use TVM and calculate future expected outcomes, calculate contributions and use excel to show your work. Upload file after you complete it. How much will be her retirement fund with 8% rate of return? How much will be her yearly distribution from retirement? Calculate and answer all financial challenges from the first question.
2b. What products would you mention to help the client address her financial needs?
YOU CAN ANSWER ALL QUESTIONS IN EXCEL AND ONLY UPLOAD 1 FILE.
Please finish in 30-35 minutes.
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