How much is Mike and Maria's social security benefits worth today?

thanks!

MIKE AND MARIA ROMAN Mike and Maria have come to you, a financial planner, for help in developing a plan to accomplish their financial goals. From your initial meeting together, you have gathered the following information. PERSONAL BACKGROUND AND INFORMATION COLLECTED THE FAMILY Mike and Maria Roman live in the country and operate a baseball academy on their property. They have a quaint home with a baseball field to the left of their house and two covered baseball batting and pitching cages. Mike played professional baseball for 15 years and now provides baseball instruction through RBI to children ages six to the early twenties. Mike currently coaches several college baseball players and is one of the most respected hitting and pitching coaches in the area. He also coaches a 9-year old team and a 14-year old team, both competing at the major division level. Maria has the tireless job of scheduling all of the lessons. Mike and Maria Roman Mike is 44 years old and loves his job. He is also an avid hunter and fisherman. Maria is also 44 years old and has done a wonderful job of raising their two kids, while helping with the family business. The Children Emily is 20 years old and is a Junior at Florida State University where she is double majoring in anthropology and communications. She has always been an excellent student and has a full academic scholarship. She also works part time to earn additional spending money. Her brother, Michael, is 17 years old and is a junior at Mission High School, where he plays shortstop on the baseball team and is hitting over 300 for the year. Roman's Baseball Institute (RBI) Mike started RBI seven years ago after he left professional baseball. He has built his reputation, as well as that of RBI over that time period. RBI is one of the premier baseball academies in the area. The primary source of income for RBI is fees from baseball lessons. Lessons are priced at $70 de three other coaches who help him provide lessons (Mickey, Mr. Joe, and Joey). His dad, Mickey from the Post Office, taught him how to play baseball, coached him growing up, and works with hi is retired. Mr. Joe also coached Mike as a child and now coaches for Mike. Joey is 20 years old, plav Mike growing up and played in college during his freshman year before getting injured. at $70 per hour. Mike has Mickey, who is now retired orks with him now that he years old, played baseball for RBI generates $245,000 in gross annual revenue and has the following expenses: Coaching fees to his coaches Utilities Field Maintenance Equipment (balls, etc.) Other Expenses $60,000 $2,500 $7,000 $1,000 $3,000 Mike works 1.500 hours and the other coaches total 2,000 hours. His three coaches work the followine number hours and are paid $30 per hour: Mickey Joey Mr. Joe 1,100 500 400 Mike's coaches have worked with him for at least five years. Mike's net income equals the fees less the expenses listed above. He reports his revenue and expenses on Schedule C of his personal income tax return. PERSONAL AND FINANCIAL OBJECTIVES FOR MIKE AND MARIA ROMAN 1. Provide for retirement. They would like to retire when Mike is age 60. They want to plan on $100,000 of retirement income in today's dollars. They expect to receive Social Security and Mike has a pension with Major League Baseball (MLB). They would like to plan on funding potential retirement expenditures until they turn age 95 and would like to maintain the same level of spending, even if Mike or Maria died cam 2. Provide for the cost of Michael's college education. They expect Michael to receive a partial baseball som arship, but they plan on paying $15,000 per year for each of his five years for college. 3. Establish a retirement plan for the income he earns at RBI. EXTERNAL INFORMATION ECONOMIC INFORMATION Inflation is expected to be 3.0% annually. There is no state income tax. The yield curve is slightly upward sloping, but relatively flat. The historic and expected correlation between the equity markets in the mod high. The correlation between these markets increase especially during cond They have a required rate of return of 9 percent. The economy is in a steady slow growth expansion phase with mo y slow growth expansion phase with moderate unemployment n the modernized countries is relor during economic crisis. BANK LENDING RATES . 15-year mortgage rate is 5.0%. 30-year mortgage rate is 6.0%. . Secured personal loan rate is 10.0%. EDUCATION INFORMATION Mike and Maria believe strongly in education. They want Michael to attend a college for learning, as well as baseball. As mentioned, they expect to fund $15.000 per ye toned, they expect to fund $15,000 per year for five years in today's dollars for Michael's education. Tuition has been increasing at a 7 percent rate, which is expected to continue indeni nitely. INTERNAL INFORMATION INSURANCE INFORMATION Life Insurance Insured Face Amount Type Cash Value Annual Premium Who pays premium Beneficiary Policy Owner Settlement options clause selected Policy A Mike $150,000 Term $0 $156 Mike Maria Mike None Policy B Maria $40,000 Term SO $50 Mike Mike Maria None Health Insurance Mike and Maria are covered under the Major League Baseball policy. The plan includes a family deductible of $12,600 at a cost of $500 per month. Long-Term Disability Insurance . Neither Mike nor Maria are covered by any disability insurance. Homeowners Insurance The Romans have a HO3 policy with endorsements for replacement value and open perils for property. The current dwelling coverage is 100% replacement value with an inflation rider Automobile Insurance Both of their cars are covered. Type Bodily Injury Property Damage Medical Payments Physical Damage Uninsured Motorist Bodily Injury Uninsured Motorist Property Damage Comprehensive Deductible Collision Deductible Premium (annual) PAP $100,000/$300,000 $50,000 $5,000 per person Actual Cash Value $100,000/$300,000 $50,000 $1,000 $1,000 $3,300 Personal Liability Insurance Neither Mike nor Maria have PLUP coverage. INCOME TAX INFORMATION The Romans filing status for their federal income tax return is married filing jointly. RETIREMENT INFORMATION Mike would like to retire at age 60 and quit working. Mike met the requirements for the MLB minimul of $34.000 per year, which is what he expects to receive. This pension begins at age 62 and the amount is fixed for life (both his and his spouse's life). It is not inflation adjusted from today or during retirement. Mike expects his Social Security benefits will equal $30,000 in today's dollars at full retirement age, which is age 67. Maria does not have 40 quarters of Social Security coverage. GIFTS, ESTATES, TRUSTS, AND WILL INFORMATION Neither Mike nor Maria have prepared a will or any other estate planning documents. MICKEY ROMAN Mickey is Mike's dad and is an "old school baseball coach. He turned 70 on December 22nd last year. He has pension payment from the USPS of $2,000 per month and he and his wife receives a monthly payment from 30cm Security of $2,200. He also has an IRA with a balance of $85,000 as of December 31st 2014. Since his wife continue to receive Social Security and his pension in the event he dies, he has named his grandson Mich beneficiary of his IRA. Mickey also has Exxon stock that was distributed from a qualified plan 30 years ago. The distrib sum distribution in which the FMV of the stock from the plan was $100,000. Mickey brokerage account and included $20,000 in his taxable income in the year of the distributi 1099-R. Mickey still owns the stock, which is now worth $324,340 and is held in the same is hoping to leave it to Mike when he dies. ars ago. The distribution was a lump key deposited the stock in his distribution, based on the form the same brokerage account. He MIKE AND MARIA ROMAN Mike and Maria have come to you, a financial planner, for help in developing a plan to accomplish their financial goals. From your initial meeting together, you have gathered the following information. PERSONAL BACKGROUND AND INFORMATION COLLECTED THE FAMILY Mike and Maria Roman live in the country and operate a baseball academy on their property. They have a quaint home with a baseball field to the left of their house and two covered baseball batting and pitching cages. Mike played professional baseball for 15 years and now provides baseball instruction through RBI to children ages six to the early twenties. Mike currently coaches several college baseball players and is one of the most respected hitting and pitching coaches in the area. He also coaches a 9-year old team and a 14-year old team, both competing at the major division level. Maria has the tireless job of scheduling all of the lessons. Mike and Maria Roman Mike is 44 years old and loves his job. He is also an avid hunter and fisherman. Maria is also 44 years old and has done a wonderful job of raising their two kids, while helping with the family business. The Children Emily is 20 years old and is a Junior at Florida State University where she is double majoring in anthropology and communications. She has always been an excellent student and has a full academic scholarship. She also works part time to earn additional spending money. Her brother, Michael, is 17 years old and is a junior at Mission High School, where he plays shortstop on the baseball team and is hitting over 300 for the year. Roman's Baseball Institute (RBI) Mike started RBI seven years ago after he left professional baseball. He has built his reputation, as well as that of RBI over that time period. RBI is one of the premier baseball academies in the area. The primary source of income for RBI is fees from baseball lessons. Lessons are priced at $70 de three other coaches who help him provide lessons (Mickey, Mr. Joe, and Joey). His dad, Mickey from the Post Office, taught him how to play baseball, coached him growing up, and works with hi is retired. Mr. Joe also coached Mike as a child and now coaches for Mike. Joey is 20 years old, plav Mike growing up and played in college during his freshman year before getting injured. at $70 per hour. Mike has Mickey, who is now retired orks with him now that he years old, played baseball for RBI generates $245,000 in gross annual revenue and has the following expenses: Coaching fees to his coaches Utilities Field Maintenance Equipment (balls, etc.) Other Expenses $60,000 $2,500 $7,000 $1,000 $3,000 Mike works 1.500 hours and the other coaches total 2,000 hours. His three coaches work the followine number hours and are paid $30 per hour: Mickey Joey Mr. Joe 1,100 500 400 Mike's coaches have worked with him for at least five years. Mike's net income equals the fees less the expenses listed above. He reports his revenue and expenses on Schedule C of his personal income tax return. PERSONAL AND FINANCIAL OBJECTIVES FOR MIKE AND MARIA ROMAN 1. Provide for retirement. They would like to retire when Mike is age 60. They want to plan on $100,000 of retirement income in today's dollars. They expect to receive Social Security and Mike has a pension with Major League Baseball (MLB). They would like to plan on funding potential retirement expenditures until they turn age 95 and would like to maintain the same level of spending, even if Mike or Maria died cam 2. Provide for the cost of Michael's college education. They expect Michael to receive a partial baseball som arship, but they plan on paying $15,000 per year for each of his five years for college. 3. Establish a retirement plan for the income he earns at RBI. EXTERNAL INFORMATION ECONOMIC INFORMATION Inflation is expected to be 3.0% annually. There is no state income tax. The yield curve is slightly upward sloping, but relatively flat. The historic and expected correlation between the equity markets in the mod high. The correlation between these markets increase especially during cond They have a required rate of return of 9 percent. The economy is in a steady slow growth expansion phase with mo y slow growth expansion phase with moderate unemployment n the modernized countries is relor during economic crisis. BANK LENDING RATES . 15-year mortgage rate is 5.0%. 30-year mortgage rate is 6.0%. . Secured personal loan rate is 10.0%. EDUCATION INFORMATION Mike and Maria believe strongly in education. They want Michael to attend a college for learning, as well as baseball. As mentioned, they expect to fund $15.000 per ye toned, they expect to fund $15,000 per year for five years in today's dollars for Michael's education. Tuition has been increasing at a 7 percent rate, which is expected to continue indeni nitely. INTERNAL INFORMATION INSURANCE INFORMATION Life Insurance Insured Face Amount Type Cash Value Annual Premium Who pays premium Beneficiary Policy Owner Settlement options clause selected Policy A Mike $150,000 Term $0 $156 Mike Maria Mike None Policy B Maria $40,000 Term SO $50 Mike Mike Maria None Health Insurance Mike and Maria are covered under the Major League Baseball policy. The plan includes a family deductible of $12,600 at a cost of $500 per month. Long-Term Disability Insurance . Neither Mike nor Maria are covered by any disability insurance. Homeowners Insurance The Romans have a HO3 policy with endorsements for replacement value and open perils for property. The current dwelling coverage is 100% replacement value with an inflation rider Automobile Insurance Both of their cars are covered. Type Bodily Injury Property Damage Medical Payments Physical Damage Uninsured Motorist Bodily Injury Uninsured Motorist Property Damage Comprehensive Deductible Collision Deductible Premium (annual) PAP $100,000/$300,000 $50,000 $5,000 per person Actual Cash Value $100,000/$300,000 $50,000 $1,000 $1,000 $3,300 Personal Liability Insurance Neither Mike nor Maria have PLUP coverage. INCOME TAX INFORMATION The Romans filing status for their federal income tax return is married filing jointly. RETIREMENT INFORMATION Mike would like to retire at age 60 and quit working. Mike met the requirements for the MLB minimul of $34.000 per year, which is what he expects to receive. This pension begins at age 62 and the amount is fixed for life (both his and his spouse's life). It is not inflation adjusted from today or during retirement. Mike expects his Social Security benefits will equal $30,000 in today's dollars at full retirement age, which is age 67. Maria does not have 40 quarters of Social Security coverage. GIFTS, ESTATES, TRUSTS, AND WILL INFORMATION Neither Mike nor Maria have prepared a will or any other estate planning documents. MICKEY ROMAN Mickey is Mike's dad and is an "old school baseball coach. He turned 70 on December 22nd last year. He has pension payment from the USPS of $2,000 per month and he and his wife receives a monthly payment from 30cm Security of $2,200. He also has an IRA with a balance of $85,000 as of December 31st 2014. Since his wife continue to receive Social Security and his pension in the event he dies, he has named his grandson Mich beneficiary of his IRA. Mickey also has Exxon stock that was distributed from a qualified plan 30 years ago. The distrib sum distribution in which the FMV of the stock from the plan was $100,000. Mickey brokerage account and included $20,000 in his taxable income in the year of the distributi 1099-R. Mickey still owns the stock, which is now worth $324,340 and is held in the same is hoping to leave it to Mike when he dies. ars ago. The distribution was a lump key deposited the stock in his distribution, based on the form the same brokerage account. He