FIN 511 Retirement Planning Problem Robert and Robin Farrell have come to you for help in developing a plan to accomplish their financial goals. From their initial meeting together, you have gathered the following information. Today is December 31, 2022. Personal Information: Robert Farrell (Age 60) Robert is a veterinarian and owns Farrells Animal Care Center, a local animal hospital with 25 employees. Robert has a salary of $250,000. Robin Farrell (Age 50) Robin is in excellent health. She works as a CPA for a small local firm, where she helps clients with their income tax returns. She has a daughter, Payton, from a previous marriage, who is age 30 and living on her own. Robin has a salary of $50,000. They have been married for 25 years. They have three (3) children from their marriage: Nicole age 23 Ryan age 21 Danielle age 12 Retirement information: They anticipate retiring when Robert turns 67 and both expect to live until age 95. They have estimated that they need $250,000 per year, in todays dollars, for retirement. This amount would drop by 25% if only one was alive. Robert Robert wants to sell his business, Farrells Animal Care Center. He would like to do this in 2029 when he retires. He estimates his business is worth $2,250,000. The company is a C corporation with a basis of $25,000. Robert has a Traditional IRA with a balance of $1.35 million. Robert also has a Roth IRA with a balance of $30,000. The account was established in 1999. Robin is the beneficiary on all of Roberts retirement accounts.

His social security at Full Retirement Age (67) is $30,000 annually, in todays dollars. Robin Robin has a 401k plan in which she is able to make elective deferrals of up to 20% of her salary. The accounting firm matches $.25 for each $1.00 she defers, up to 6% of her salary. She is vested in the 401k plan. The value is $150,000. Robert is the beneficiary on all of Robins retirement accounts. Her social security at Full Retirement Age (67) is $24,000 annually, in todays dollars. She plans to take her social security at 62. Assumptions: General inflation: 4% (current and future) Expected investment return: 9% Robert does not expect his salary to increase Robins income will increase each year by 5%. Retirement period of 28 years for Robert and 38 years for Robin

Question:

Calculate the amount of capital needed to supplement Social Security benefits, if they retire when Robert is 67. (15 points) o You will need to calculate two separate retirement periods. Robert and Robin retired Robert deceased and Robin retired