Question
Jane is 55 years old and is divorced. She works at The Veterans Hospital in South Padre Island, Texas. She makes $115,000 per year (with
Jane is 55 years old and is divorced. She works at The Veterans Hospital in South Padre Island, Texas. She makes $115,000 per year (with her bonus) and has an employer sponsor pension plan. She wanted a little extra money in retirement so, she set up a personal IRA 5 years ago. She feels a little uneasy about her current retirement situation. In the divorce proceedings, she discovered her husband was entitled to half of her pension payments. She set up her IRA after the divorce and wonders if she was too late in getting it all set up. She wonders how she can invest some additional cash from her paycheck each month. Her risk tolerance score based on the Risk Assessment Questionnaire is 71.
1. Identify the risk tolerance level of the individual(s). Describe what that means for their investment choices. (At least 3 sentences)
2. Recommend an investment portfolio based on that level of risk tolerance. Do this by suggesting how much of the investment pie should be devoted to each of the following: Cash and Cash Equivalents, Bonds, Stocks, Real Estate, and Alternative (or very risky) investments. Example: Cash 5%, Bonds 35%, Stocks 45%, Real Estate 14%, Alternatives 1%.
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