Lorraine and Jack recently married, both being 38 years of age. Lorraine works as a Registered Nurse; Jack drives a truck for a living. Combined income is $120,000 per year. They have no children but are planning to establish a family within the next five years. They have a home worth $450,000, fair market value, of which they owe $325,000. The interest rate is a 4.5% fixed due in thirty years. Neither Jack nor Lorraine have an insurance policy.

There is little savings in their joint bank account:$10,000; each has $50,000 in their Roth IRAs; Lorraine has $145,000 in an employer matched 401(k). Jack has not established a 401(k) but intends to do so in 2018, January. They are somewhat risk-averse and have most of their IRAs in conservative, fixed income investments. Lorraine is a bit more aggressive in her 401(k) having 70% in international mutual funds which, although having performed well throughout most of 17, carry high risk. Both are in the 25% marginal tax bracket and are concerned that taxes will continue to erode what they can save toward retirement.

In no more than three pages, what preliminary recommendations leading to a comprehensive financial plan could you make for the couple? At this stage you are merely identifying some holes in their present financial condition necessitating that, as their financial planner, you make improvements. You may wish to apply parts of the EGADIM (Establish, Gather, Analize, Develop, Implament, Monotor) acronym as a blue print for your recommendations.