Question
1) Taking the role of a financial planner, let's say you have a client (named Jane), who is a single mother of two. Jane is
1) Taking the role of a financial planner, let's say you have a client (named Jane), who is a single mother of two. Jane is 28 years old. She makes 80,000 per year which is expected to grow 2% per year until age 67. In addition to your insurance recommendations for Jane, she would also like recommendations for investing and retirement planning. Note that Jane's employer has a retirement plan (401k) whereby Jane can choose from several mutual funds to invest in. Her employer provides a 5% matching contribution.
Describe the type of mutual fund(s) you would advise Jane to acquire and provide the rationale for each type(s) and also an amount to invest. Also, provide a savings goal (amount needed for retirement as well as an income stream) for Jane that would provide for life expenses during retirement. Jane would need to replace 80% of her projected salary at 67 years of age. Calculate an investment goal that would provide Jane her replacement income until age 97 Retirement Goal Amount. You should use historical returns for your mutual fund asset class as Jane's portfolio return.
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