SCENARIO #2 Harold and Virginia Jones are long-time residents of your city. Harold has worked for the same corporation for 35 years and is fully vested in his eorporation's Defined Benefit Pension. He also has saved faithfully in his 401k, whlch has a balance of $$00,000. Virginia worked full-time for 11 vears before they had children, and then stayed home with their two children until they went to college. She never returned to the workforce. They are both 63 years old and are starting to consider retirement. Their biggest concern is how best to position and protect their assets from running out too soon and to protect against having to pay for chronic healthcare needs or assistance. They have come to you for advice on how to prepare for retirement. A. They first ask you about protecting against the risk of chromic healthcare issues in retirement? 1) What, if any, insurance product would you recommend they purchase and why? If you recommended a product, please explain how you would design it? 2) B. They ask you about options to handle their $500,000 of retirement savings. 1) If they want to avoid risk and guarantee a certain income stream, what would you recommend 2) If they are okay with continuing to take risk, but want to move the assets from the corporation's 3 Will Virginia and Harold have to pay taxes on the money as they withdraw it from their 4) Are there any penalties for withdrawing money at this point in their lives? they do with this money? WHY? to their own account, what can they do with the proceeds? If so, at what rate? 401k Finally, they ask about their entitlement to Social Security benefits. i) 2) 3) C. Are they both able to receive retirement benefits at age 65? On what basis? Will their benefits be taxable at all? (Assume a "combined income" of $75,000) If Virginia were to become totally disabled, would she be entitled to any benefits from Social Security? Why or Why not? 4) If Virginia were to die, would Harold receive any survivorship benefits? Why or Why not? SCENARIO #2 Harold and Virginia Jones are long-time residents of your city. Harold has worked for the same corporation for 35 years and is fully vested in his eorporation's Defined Benefit Pension. He also has saved faithfully in his 401k, whlch has a balance of $$00,000. Virginia worked full-time for 11 vears before they had children, and then stayed home with their two children until they went to college. She never returned to the workforce. They are both 63 years old and are starting to consider retirement. Their biggest concern is how best to position and protect their assets from running out too soon and to protect against having to pay for chronic healthcare needs or assistance. They have come to you for advice on how to prepare for retirement. A. They first ask you about protecting against the risk of chromic healthcare issues in retirement? 1) What, if any, insurance product would you recommend they purchase and why? If you recommended a product, please explain how you would design it? 2) B. They ask you about options to handle their $500,000 of retirement savings. 1) If they want to avoid risk and guarantee a certain income stream, what would you recommend 2) If they are okay with continuing to take risk, but want to move the assets from the corporation's 3 Will Virginia and Harold have to pay taxes on the money as they withdraw it from their 4) Are there any penalties for withdrawing money at this point in their lives? they do with this money? WHY? to their own account, what can they do with the proceeds? If so, at what rate? 401k Finally, they ask about their entitlement to Social Security benefits. i) 2) 3) C. Are they both able to receive retirement benefits at age 65? On what basis? Will their benefits be taxable at all? (Assume a "combined income" of $75,000) If Virginia were to become totally disabled, would she be entitled to any benefits from Social Security? Why or Why not? 4) If Virginia were to die, would Harold receive any survivorship benefits? Why or Why not
