High impact wealth management: tom and deena LI plan for retirement

ASSIGNMENT QUESTIONS

1. How much income do the Lis need in retirement, given their current wishes?

2. What are the potential sources for that income, and will that income be sufficient for their needs?

3. What are the implications of each source in terms of duration of the income, the tax consequences, and any inherent risks?

4. How would you recommend the Lis prepare for their retirement, and what actions should they take to prepare?

SOLVING HIGH IMPACT WEALTH MANAGEMENT:

1) How much income do the Lis need in retirement, given their current wishes? Tom estimates that he and Deena will need almost $________ to finance their annual expenses (see case Exhibit 1). Review and comment on Tom and Deenas budget. Is it reasonable? 1. What are some of the expenses that are not included? There are more than five items. Jenny used the TMV calculations to estimate the capital Tom and Deena will require to generate the required CA$ in income plus the associated income tax (see case Exhibit 2). The total estimated capital required is $1,882,513, after inclusion of the one-time expenses. What are some of the items not included in calculations? Are the assumptions for time and rate of return reasonable?Try lower interest rates and provide the amount needed.

2. What are the potential sources for that income, and will that income be sufficient for their needs? (15 minutes) Discuss the sources of income. Is it sufficient? What is the funding gap? Depending on a number of assumptions, it appears that Tom and Deena have a funding gap of approximately $__________ How can they make up the shortfall? What are some of the lifestyle changes they would have to make to meet the shortfall.

3. How would you recommend that the Lis prepare for their retirement, and what actions should they take to prepare? What are some of the expenses they can reduce? What are some of the life style changes they could make? Do they have other ownerships they can sell or cash out?