CPA #8 QUESTIONS: 1. Your clients, John and Mary Smith, residents of Bowling Green, KY, are both age 60 and they are both in good health. They have just retired. They possess pension income of $3,000 a month. They have a $2,000,000 investment portfolio, from which they take out a modest $5,000 a month (2.5% rate of withdrawal). The combined income of $8,000 is sufficient to meet their needs and desires for spending. In addition, in the future Mary will claim social security benefits at age 62, in the amount of $1,200 a month, and John will claim his social security benefits at age 70, in the amount of $2,800 a month. After both have claimed social security benefits, they anticipate that the amount withdrawn from their portfolio will drop to $1,000 a month. Their current health insurance is provided as a benefit by the State of Kentucky pension plan. As each of them turn age 65, they will go on Medicare, and obtain Medicare Parts B, D, and Medigap (Medicare supplemental) insurance. However, they don't anticipate that their level of expenditures will go up at that time. Neither John nor Mary expect any substantial increases to their level of expenditures during retirement. John and Mary Smith confront one major uncertainty, however. The costs of long-term care. What do you recommend to them, in order to address this cost? Long-term care insurance? If so, for how many years? Should it be a "partnership policy" or not? How much will the premiums cost? (Online research may be required.) Will the premiums ever increase? CPA #8 QUESTIONS: 1. Your clients, John and Mary Smith, residents of Bowling Green, KY, are both age 60 and they are both in good health. They have just retired. They possess pension income of $3,000 a month. They have a $2,000,000 investment portfolio, from which they take out a modest $5,000 a month (2.5% rate of withdrawal). The combined income of $8,000 is sufficient to meet their needs and desires for spending. In addition, in the future Mary will claim social security benefits at age 62, in the amount of $1,200 a month, and John will claim his social security benefits at age 70, in the amount of $2,800 a month. After both have claimed social security benefits, they anticipate that the amount withdrawn from their portfolio will drop to $1,000 a month. Their current health insurance is provided as a benefit by the State of Kentucky pension plan. As each of them turn age 65, they will go on Medicare, and obtain Medicare Parts B, D, and Medigap (Medicare supplemental) insurance. However, they don't anticipate that their level of expenditures will go up at that time. Neither John nor Mary expect any substantial increases to their level of expenditures during retirement. John and Mary Smith confront one major uncertainty, however. The costs of long-term care. What do you recommend to them, in order to address this cost? Long-term care insurance? If so, for how many years? Should it be a "partnership policy" or not? How much will the premiums cost? (Online research may be required.) Will the premiums ever increase
