Instructions:

Take a look at the attached hypothetical scenario, and please respond with how you would approach these problems. There is

no $$right$$ answer, and we are simply gauging how you would approach this situation.

No hard number crunching is necessary, and you are welcome to approach the scenario in any way you see fit.

Please respond with a summary $($a paragraph or two is fine$)$ on how you would respond to their questions, what your next steps

would be$,$ and generally how you would approach their problems. Assume that you are sitting across from them in an in$-$person meeting, and this is the first time you$$ve heard any of this from them. Scenario:

Ann $(68)$ and Bob $(67)$ are a couple who have come in for financial planning and investment management. Ann is recently retired and Bob is still working. They have accumulated work retirement plans as well as Bob's pension but have not worked with an advisor before. They are currently able to pay their bills out of Bob's salary, but are worried about how their cash flow will work in retirement. Neither Ann nor Bob have filed for Social Security. Bob considers himself a moderately aggressive investor but is concerned about taking too much risk. Ann is worried about taking withdrawals from her account, especially the "government forced" withdrawals starting at age $70$ she's heard about. Other questions they have are the following:

When should Bob retire?

When should they both take social security?

Should they re$-$allocate their investments?

What survivor benefit should Bob elect on his pension?

What questions are they forgetting to ask?

Bob earns $$100,000$ a year

Ann's age $68$ Social security benefit is $$10,000,$ and age $70$ is $$11,700$

Bob's age $67$ Social Security Benefit is $$28,000$ and $($if he retires today$)$ age $70$ is $$32,700$

Bob's pension follows the following structure

Survivor$\%$ Age $67$ Bene Age $68$ Bene Age $69$ Bene Age $70$ Bene

$0\%($single life$)$ $$26,000/$yr $$28,000/$yr $$31,000/$yr $$35,000/$yr

$50\%$ $$24,000/$yr $$26,000/$yr $$28,500/$yr $$32,000/$yr

$100\%($joint life$)$ $$21,000/$yr $$23,000/$yr $$25,000/$yr $$28,000/$yr

They have $$500,000$ in assets split in the following ways:

Bob's $$100,000401($k$)$ invested $100\%$ in an S&P $500$ index fund

Ann's $$300,000403($b$)$ invested $100\%$ in a $2025$ target date fund

A joint inheritance of $$100,000$ that they have not yet decided what to do with $($sitting in cash$)$

They have done a preliminary bu dget and believe their monthly expenses come to about $$6000$ per month in $2020$ dollars