2. Calculate the amount of retirement funding the Bermans will have available if they were to enter retirement in 20 years from today. Assume that Carls employer matches Carls 401(k) plan contributions every year with $1 for every dollar he saves. Make sure to include the annual match amount in your calculations.
Please use the information provided to you in the net worth details and the cash flow details of the case study. Assume the safe retirement account rate of return. Retirement savings deposits are typically made at the end of a period The couples current amount of retirement savings are labeled qualified assets in their net worth statement. The couples last years annual savings are listed under qualified savings in the cash flow statement.
Net Worth Details Carl and Naomi Berman As of: 12/31/2017 Carl Naomi Joint Total Non-Qualified Assets Bank savings Trading account Total Non-Qualified Assets 30,281 107,338 137,619 30,281 107,338 137,619 61,431 66,550 Qualified Assets Carl's Roth Naomi's Roth Carl's IRA Naomi's 401(k) Carl's 401(k) Total Qualified Assets 153,577 61,431 66,550 153,577 204,770 307,155 793,483 204,770 307,155 522,163 271,320 Lifestyle Assets Residence Total Lifestyle Assets 453,750 453,750 453,750 453,750 Total Assets 522,163 271,320 591,369 1,384,851 Liabilities Mortgage Car Loan Credit Card (314,118) (29,787) (7,515) (314,118) (29,787) (7,515) Total Liabilities (351,421) (351,421) Total Net Worth 522,163 271,320 239,948 1,033,430 Cash Flow Details Carl and Naomi Berman As of: 12/31/2017 Carl Naomi Family Cash Inflows Earned Income Salary Subtotal 140,000 140,000 100,000 100,000 240,000 240,000 Investment Income Interest Dividends Long-Term Capital Gains Subtotal 386 518 1,744 2,649 386 518 1,744 2,649 771 1,037 3,489 5,297 Total Cash Inflows 142,649 102,649 245,297 Cash Outflows Lifestyle Expenses Discretionary expenses Fixed expenses (excluding liabilities) Mortgage payment Car Loan Credit Card payment Subtotal 25,000 20.000 15,000 3,900 1,050 64,950 25,000 20.000 15,000 3,900 1.050 64,950 50,000 40,000 30,000 7,800 2.100 129,900 886 886 Non-Qualified Reinvestments Reinvestments Reinvested Accrued Investment Expense Subtotal 1.521 2,407 1.521 2,407 1,771 3,042 4,813 Qualified Savings 401(k) contributions Subtotal 7,500 0 7,500 7,500 0 7,500 37,721 Taxes Federal Income Tax State Income Tax Social Security Tax-employment Medicare Taxes Subtotal 21,449 5,883 7,831 2,030 37,193 16,272 4,372 6,200 1.450 28,294 10,255 14,031 3,480 65,487 Total Cash Outflows 112,050 95,651 207,700 Surplus/(Deficit) 30,599 6,998 37,597 Net Worth Details Carl and Naomi Berman As of: 12/31/2017 Carl Naomi Joint Total Non-Qualified Assets Bank savings Trading account Total Non-Qualified Assets 30,281 107,338 137,619 30,281 107,338 137,619 61,431 66,550 Qualified Assets Carl's Roth Naomi's Roth Carl's IRA Naomi's 401(k) Carl's 401(k) Total Qualified Assets 153,577 61,431 66,550 153,577 204,770 307,155 793,483 204,770 307,155 522,163 271,320 Lifestyle Assets Residence Total Lifestyle Assets 453,750 453,750 453,750 453,750 Total Assets 522,163 271,320 591,369 1,384,851 Liabilities Mortgage Car Loan Credit Card (314,118) (29,787) (7,515) (314,118) (29,787) (7,515) Total Liabilities (351,421) (351,421) Total Net Worth 522,163 271,320 239,948 1,033,430 Cash Flow Details Carl and Naomi Berman As of: 12/31/2017 Carl Naomi Family Cash Inflows Earned Income Salary Subtotal 140,000 140,000 100,000 100,000 240,000 240,000 Investment Income Interest Dividends Long-Term Capital Gains Subtotal 386 518 1,744 2,649 386 518 1,744 2,649 771 1,037 3,489 5,297 Total Cash Inflows 142,649 102,649 245,297 Cash Outflows Lifestyle Expenses Discretionary expenses Fixed expenses (excluding liabilities) Mortgage payment Car Loan Credit Card payment Subtotal 25,000 20.000 15,000 3,900 1,050 64,950 25,000 20.000 15,000 3,900 1.050 64,950 50,000 40,000 30,000 7,800 2.100 129,900 886 886 Non-Qualified Reinvestments Reinvestments Reinvested Accrued Investment Expense Subtotal 1.521 2,407 1.521 2,407 1,771 3,042 4,813 Qualified Savings 401(k) contributions Subtotal 7,500 0 7,500 7,500 0 7,500 37,721 Taxes Federal Income Tax State Income Tax Social Security Tax-employment Medicare Taxes Subtotal 21,449 5,883 7,831 2,030 37,193 16,272 4,372 6,200 1.450 28,294 10,255 14,031 3,480 65,487 Total Cash Outflows 112,050 95,651 207,700 Surplus/(Deficit) 30,599 6,998 37,597
