Joan and Joe, both 45, have one child starting her 2nd year in college. Tuition is $13,000/year. Their goals are to pay
Posted: Wed Mar 09, 2022 8:42 am
Joan and Joe, both 45, have one child starting her 2nd year in
college. Tuition is $13,000/year. Their goals are to pay for
tuition and fund their retirement. Currently, the balance in his
pension plan is $70,000. He puts $8,000 per year into it from
pre-tax money plus his employer's match (100%). It is earning an
average of 5% per year. In addition, they have $10,000 of
non-retirement money in mutual funds. At this point, they want to
evaluate their retirement plans and determine how much they will
have for retirement at age 65. Their financial data is:
Monthly net income $7,500
Living expenses $3,500
Assets $305,000 (their home's value, excludes investments)
Liabilities $105,000 (all mortgage, maturing in 15 years)
At age 63, how much should they have in the pension plan
account? In the non-retirement account?
college. Tuition is $13,000/year. Their goals are to pay for
tuition and fund their retirement. Currently, the balance in his
pension plan is $70,000. He puts $8,000 per year into it from
pre-tax money plus his employer's match (100%). It is earning an
average of 5% per year. In addition, they have $10,000 of
non-retirement money in mutual funds. At this point, they want to
evaluate their retirement plans and determine how much they will
have for retirement at age 65. Their financial data is:
Monthly net income $7,500
Living expenses $3,500
Assets $305,000 (their home's value, excludes investments)
Liabilities $105,000 (all mortgage, maturing in 15 years)
At age 63, how much should they have in the pension plan
account? In the non-retirement account?