$200K. Mrs Howe has one brother who is every day of his life. He has spent the inheritance down to a pharma distributor and lives in another state - she is 60 althy and has two children. Mrs Howe's mother i the same town as the Howe's and her father is self-suffleter and self-sufficient. Mrs Howe's father lives in Mrs Howe's Father (Trust 1) Mrs Howe's father set up a trust for the benefit of Mrs Howe. Her brother is trustee, but it is really controlled by the father. The trust distributes $30K /year to Mrs Howe. The basis is $700K and it has an average eamings rate of about 8.5% per year for the last 10 years. There is no plan to increase distributions. Economic Info Inflation averages 3% for last 20 years and expected to continue at 3% Bank lending rates: 15 year 3.25%;30 year 3.75%; Any closing costs associated with refinance are 3% and included in refinanced mortgage. Expected rate of retum 8.5% Residence Current value $550K; Balance on 30 -year mortgage at 5.5% \$260,514; Land value $150; Monthly payment (P\&I) \$1703.37; Owned home for 8 years; Will not qualify for refinance until Mr. Howe has been with his current employer for one year. Life - No life insurance; Mr Howe expects $50K group term from new employer Health - Covered under Mr Howe employer plan; Cost \$1 K/month for family Disability - No disability; Mr Howe will be covered for LTD provided by employer at 65% of gross pay. Homeowner - HO3 with open perils and replacement value; $250 deductible; Dwelling covered $300K with 80/20 coinsurance clause; Premium $2400/ year. Auto - $250 deductible; 100/300/50; Premlum $1800/ year Assets JT Bank account \$28K JT inherited portfollo $200K Other Financial Annual Expenses Annual contributions to 401K$17500 SS Taxes $7115 Federal WH \$10384 State WH \$3715 Property tax $3000 Tuition to preschool $15K Utilities $2400 Entertainment \$1200 Clothing $2000 Auto maintgas $3000 Food $9600 Investments Investment portfolio $327K Brokerage account includes gifts from Mrs Howe's father - invested in money market account at 0% earnings 401K from Mr Howe's prior job invested in index fund Economic info Inflation averages 3% for last 20 years and expected to continue at 3% Bank lending rates: 15 year 3.25%;30 year 3.75%; Any closing costs associated with refinance are 3% and included in refinanced mortgage Expected rate of return 8.5\% Economic Info Inflation averages 3% for last 20 years and expected to continue at 3% Bank lending rates: 15 year 3.25%;30 year 3.75%; Any closing costs associated with refinance are 3% and included in refinanced mortgage Expected rate of return 8.5% Residence Current value $550K; Balancece on 30 year mortgage at 5.5%$260,514; Land value $150K; Monthly payment (P\&1) \$1703.37; Owned home for 8 years; Not qualify for refi until Mr Howe in new job 1 year Estate Info - No estate planning documents Goals and Concerns Want proper insurance, investment and estate portfolio Want to know cont of collego education for their child so they can approach Mrs Howe's father about funding a 629 plan. Current cost of education $35K in today's dollars with expected 5% inflation. Expect the child to be in school six years and expect rate of retum 8.5\% Want to plan for early retirement (100\% WRR, excluding trust income) at age 62 . Mr Howe to save $17600/yr in 401K with an employer match of $6K. Expect to live to age 90 . Do not include 3S benefits in planning. Want to be debt free at retirement 5 - Prepare an analysis of the Howe's risk management insurance coverage using the following format: $200K. Mrs Howe has one brother who is every day of his life. He has spent the inheritance down to a pharma distributor and lives in another state - she is 60 althy and has two children. Mrs Howe's mother i the same town as the Howe's and her father is self-suffleter and self-sufficient. Mrs Howe's father lives in Mrs Howe's Father (Trust 1) Mrs Howe's father set up a trust for the benefit of Mrs Howe. Her brother is trustee, but it is really controlled by the father. The trust distributes $30K /year to Mrs Howe. The basis is $700K and it has an average eamings rate of about 8.5% per year for the last 10 years. There is no plan to increase distributions. Economic Info Inflation averages 3% for last 20 years and expected to continue at 3% Bank lending rates: 15 year 3.25%;30 year 3.75%; Any closing costs associated with refinance are 3% and included in refinanced mortgage. Expected rate of retum 8.5% Residence Current value $550K; Balance on 30 -year mortgage at 5.5% \$260,514; Land value $150; Monthly payment (P\&I) \$1703.37; Owned home for 8 years; Will not qualify for refinance until Mr. Howe has been with his current employer for one year. Life - No life insurance; Mr Howe expects $50K group term from new employer Health - Covered under Mr Howe employer plan; Cost \$1 K/month for family Disability - No disability; Mr Howe will be covered for LTD provided by employer at 65% of gross pay. Homeowner - HO3 with open perils and replacement value; $250 deductible; Dwelling covered $300K with 80/20 coinsurance clause; Premium $2400/ year. Auto - $250 deductible; 100/300/50; Premlum $1800/ year Assets JT Bank account \$28K JT inherited portfollo $200K Other Financial Annual Expenses Annual contributions to 401K$17500 SS Taxes $7115 Federal WH \$10384 State WH \$3715 Property tax $3000 Tuition to preschool $15K Utilities $2400 Entertainment \$1200 Clothing $2000 Auto maintgas $3000 Food $9600 Investments Investment portfolio $327K Brokerage account includes gifts from Mrs Howe's father - invested in money market account at 0% earnings 401K from Mr Howe's prior job invested in index fund Economic info Inflation averages 3% for last 20 years and expected to continue at 3% Bank lending rates: 15 year 3.25%;30 year 3.75%; Any closing costs associated with refinance are 3% and included in refinanced mortgage Expected rate of return 8.5\% Economic Info Inflation averages 3% for last 20 years and expected to continue at 3% Bank lending rates: 15 year 3.25%;30 year 3.75%; Any closing costs associated with refinance are 3% and included in refinanced mortgage Expected rate of return 8.5% Residence Current value $550K; Balancece on 30 year mortgage at 5.5%$260,514; Land value $150K; Monthly payment (P\&1) \$1703.37; Owned home for 8 years; Not qualify for refi until Mr Howe in new job 1 year Estate Info - No estate planning documents Goals and Concerns Want proper insurance, investment and estate portfolio Want to know cont of collego education for their child so they can approach Mrs Howe's father about funding a 629 plan. Current cost of education $35K in today's dollars with expected 5% inflation. Expect the child to be in school six years and expect rate of retum 8.5\% Want to plan for early retirement (100\% WRR, excluding trust income) at age 62 . Mr Howe to save $17600/yr in 401K with an employer match of $6K. Expect to live to age 90 . Do not include 3S benefits in planning. Want to be debt free at retirement 5 - Prepare an analysis of the Howe's risk management insurance coverage using the following format