What do the acronyms WLE & RLE means? Please explain the relationship between these two things and how each has changed and ultimately impacted the role of the financial planner over time.
What are the 3 methods for analyzing retirement capital needs? Please define each and explain the tradeoffs clients need to understand when determining which method may meet their needs.
Please explain the qualitative factors that must be considered when helping a client plan for retirement. How do those factors impact and integrate with the quantitative methods of analysis?
Joe has $100,000 in his 401k. This year he will make $50,000. At the end of each year he saves 10% of his salary. His company matches up to 5% of his salary. If Joe expects his salary to increase at 5% per year, and his 401(k) to grow at 7% per year. How much will Joe have saved at the end of 10 years? After 20 years? After 25 years?
Jane is buying a house for $365,000. She plans to put 20% down and finance the rest. She has 2 options: A fixed rate 30 year mortgage at 4% with no points. Or a fixed rate 30 year mortgage at 3.375% plus 2 points. What would the monthly payment be of each mortgage?
Jane is buying a house for $365,000. She plans to put 20% down and finance the rest. She has 2 options: A fixed rate 30 year mortgage at 4% with no points. Or a fixed rate 30 year mortgage at 3.375% plus 2 points.
From question 5 (restated above), how would you advise Jane to make a decision between these two mortgage options? White her a short email explaining the difference.
Describe the similarities and differences between a 529 Plan and a Coverdell Savings account.
Jesse wants to save for her daughter’s college education. On her first birthday, Jesse starts saving $150 per month. The account earns 8% per year and Jesse’s total tax rate is 25%. How much will she have saved in the 529 by her daughters 18th birthday?
Explain the difference between active and passive investing
Name 3 types of risk that corporate bonds have. Define the risk, then give an example of how a financial advisor can work to reduce the effect this risk has on a client.