Examples of Financial Plans

Below are some examples of the financial plans – your situation may fit into one of the examples and perhaps may give you some ideas as to what your plan may look like, however, if it doesn’t then reach out to BlueAris, we will work with you to devise a plan that suits your situation and needs. Do remember that the initial assessment session, typically 30-60 minutes is free- so don’t delay your peace of mind to better for a better financial future and send us an email or give us a call- we are here to help you.

Sample Financial Plans | Planning for a Secure Financial Future

Situation #1

Charlie and Sandy are a retired couple, who have worked all their lives. They are well to do and their children are now all grown up and independent. Charlie worked for a Fortune 500 enterprise and receives a pension, he also delayed collecting his Social Security since he worked until age 70 and started collecting at age 70. Sandy was a school teacher at a state school and she also receives a pension, Sandy is over 65 and has decided to delay her Social Security until 70 to receive maximum benefit. In addition, both Charlie and Sandy contributed to Retirement Savings and Invested in 401K and 403B Retirement plans respectively and the account has grown substantially due to compounding over the years. Charlie and Sandy are on Medicare. Charlie and Sandy do carry Credit card debt and due to past unforeseen circumstances, they had to take a loan and took a small 2nd mortgage on their house. Charlie and Sandy, would like to be debt free as soon as possible and own their home without the 2nd mortgage. They would also like to travel and save for the Nursing home when the need arises.

Assessment – Overall, it may seem that Charlie and Sandy are in good financial shape. They are entitled to receive pension for the rest of their lives and have substantial savings in their Retirement accounts (401K and 403B), their health is covered by Medicare. However, they are paying high APR (interest) on their credit card and they still have to pay the loan on their 2nd mortgage. We need to improve their Personal Balance Sheet.

Financial Plan – The financial plan for Charlie and Sandy will be devised to improve their personal balance sheet – they will be set on a plan where they will pay off their current credit card debt and 2nd home mortgage – so they will be debt free. The savings that they will incur will be invested based on their risk profile, so they have enough funds for the Nursing home, the rest will be invested in long & short-term securities for them to enjoy their future travel and other fun activities. Since, Charlie and Sandy will be required to take RMDs (Required Minimum Distribution) when they hit age 73, any added income from their retirement accounts may impact their Income taxes and Medicare payment’s part B and part D, the financial plan will have to accommodate this situation. Charlie and Sandy would also have an option to contribute to QCD (Qualified Charitable Trust) to reduce their income. Alongside, Charlie and Sandy will be encouraged to write a Will/open a Trust to ensure safe migration of their assets to their children without any Probate.

Situation #2

Mike and Sherry are a couple in their 40s. Mike is in Technology Sales and Sherry is a home maker who works part time as a Digital Marketer while raising their young children in middle school. Mike and Sherry own a house and are paying mortgage. They also have high expenses that includes their mortgage, utilities, health insurance premiums among other expenses. Mike does participate in his employer 401K plan and contributes up to the maximum of matching from his employer. Mike and Sherry would like to save funds for their children and would like to pay the mortgage of their house by age 60. They would also like to save for retirement and would like to be debt free in retirement. Sherry plans to work full time once the children have finished 10th grade.

Assessment – Mike and Sherry are middle class couple who have young children and responsibilities. Mike is the sole breadwinner and has to maintain his job to run the family, even though Sherry does work part-time but her income is just enough to save some money for the family, pay some small expenses and the rest goes for family outings. Mike does well to fully utilize the 401K plan for maximum retirement savings and investments.

Financial Plan – Mike and Sherry need to open a 529Plan for each of their children and do small periodic contributions to the account for college savings from Sherry’s income instead of putting that money in a savings account. Since Mike’s income is important for the family, we advise Mike to purchase a Term Life policy for 20 years incase an emergency arises. Mike should also get a Risk assessment done, so that the family can take the correct risk for the 401K plan Investments and have a peace of mind in cases when the financial markets are volatile.

Situation #3

Anita is a young lawyer who is just starting her career and is age 28. She just recently landed a job as a young lawyer and is currently renting her apartment. She has taken Student loans and currently has credit card debt. Anita would like to buy a home in 5 years and she hopes to meet her significant other to start a family. She contributes to her employer 401K plan up to employer matching and has a Savings account.

Assessment – Anita is young and single. Anita is just starting out and she is doing a smart move in getting a financial plan done at this stage of her life. Since she has a long-term horizon, we will devise a long-term aggressive plan for her.

Financial Plan – At BlueAris, no client is too young or too old to get service. We are encouraged that Anita is interested in getting her Financial Plan done at such early stage of her life, this will certainly benefit her later. Since Anita is starting early, we can devise an aggressive plan for her 401K that will help her through the power of compounding that she has sufficient funds available at retirement or later on in her life. We also encourage Anita to open a Roth IRA account and an investment account where she can do additional contribution from her Savings account to ensure that she can have funds available for down payment when is ready to buy her first house, payoff her student loans and credit card debt. We in BlueAris love to work with young professionals and help them get ahead in their lives, so don’t hesitate to give us a call.