Question
Jill is currently 30 years old and has 30,000 (ten thousand dollars) in her 401 k. She plans to put in additional 1500 dollars every
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- Jill is currently 30 years old and has 30,000 (ten thousand dollars) in her 401 k. She plans to put in additional 1500 dollars every year. She is not sure about the allocation so decides to put 50 % in a stock fund and 50 % in the bond fund If the future fund growth performance is same as the historical growth;
- Forecast how much will Jill have in each fund and calculate her asset allocation percentage based on the forecasted amounts at the end of each age period..
- Read rule of 100 (in the text Investment demystified). Compare Jills asset allocation of 50/50 (which he is not changing over time) and compare with applying rule of 100. Provide comparison over the periods (Current age, 40, 50, & 60)
- What would you recommend Jill and why?
| For Jill currently 30 years old |
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| Current value | $ 30,000 |
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| Annual deposit | $ 1,500 |
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| N=10 | N=20 | N=30 |
| Forecasting portfolio | Current age: 30 | At age of 40 | At age of 50 | At age of 60 |
| Portfolio in Stock fund | $ 15,000 | ? | ? | ? |
| Portfolio in Bonds | $ 15,000 | ? | ? | ? |
| Total | $ 30,000 | ? | ? | ? |
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| Asset allocation % |
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| AGE | 30 | 40 | 50 | 60 |
| Portfolio in Stock fund | 50% | ? | ? | ? |
| Portfolio in Bonds | 50% | ? | ? | ? |
| Total | 100% | ? | ? | ? |
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Activity Based Cost Management In Government
Authors: Gary Cokins
2nd Edition
1567261817, 978-1567261813
