George (age 44)

Earns $104,000 annually working at Spacely Sprockets

Contributes $1,625 to his 401(k) each month

Employer matches 100% of the first 3% and 50% of the next 2% of Georges salary

Would like to retire at age 67

Social Security benefit estimate in todays dollars is $2,050/month at age 67

Jane (age 44)

Earns $31,000 working part-time from home as a graphic artist

Contributes $7,750 per year to a Simplified Employee Pension (SEP) plan

Would like to retire at the same time as George

Social Security benefit estimate in todays dollars in $1,725/month at age 67

George and Jane would like to have $125,000/year (in todays dollars) at retirement

Neither George nor Jane expect their earnings to change before retirement

The Jetsons expect inflation to average 3% per year during their lifetime

George and Jane each expect to live to age 95

They expect their invested money to average a 9% per year return during their lifetime

Additional Information about the Jetsons

Current net worth is $1,072,000

Home mortgage: $325,000 (12 years left at $1,800/month) Auto loan: $17,000 (2 years left at $730/month)

Credit Card: $8,400 (paying $450/month)

Cumulative living expenses (food, utilities, fuel, clothing, etc.): $1,700/month

Effective income tax rate is 18%

Assets

Home value is $575,000

Georges 401(k) balance is $625,000

Janes SEP balance is $95,000

Investment account balance is $45,000

Bank CD balance is $75,000 (at 1.5% interest)

Checking account balance is $7,400

B) If the couple is not on track to meet their financial goals (individual or collective), what are three alternative ideas to help them meet their goals? Using calculations, show and explain each alternative to the couple.