Investment Policy Statement for Retirement Savings Plan

This Investment Policy Statement is prepared for an older person who wants to develop a savings plan for securing the future after retirement. The plan includes timeline, tax concerns, liquidity, legal consideration, and unique features.

Running head: INVESTMENT POLICY STATEMENT
INVESTMENT POLICY STATEMENT
Name of the Student:
Name of the University:
Author’s Note:

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INVESTMENT POLICY STATEMENT
Executive Summary
The main purpose of this assignment is to interview an older person and develop a detailed plan
saving plan which the older person can invest in for securing the future of the same. The
investment plan of the older person will be consisting of timeline, tax concerns, liquidity, unique
feature. The saving plan is to be developed in order to suit the requirement of the individual.

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INVESTMENT POLICY STATEMENT
Table of Contents
Introduction......................................................................................................................................3
Client Overview...............................................................................................................................3
Purpose............................................................................................................................................3
Time Horizon...................................................................................................................................4
Tax concerns....................................................................................................................................4
Liquidity..........................................................................................................................................4
Legal Consideration.........................................................................................................................4
Unique Features...............................................................................................................................5
Reference.........................................................................................................................................6

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INVESTMENT POLICY STATEMENT
Introduction
Investment Policy Statement is prepared by an individual who manages portfolio for a particular
client as per the requirement of the client (Ovbiagele et al. 2013). The investment policy
statement is to be prepared on the basis of the requirement of the client. The client in this
assessment is an elder person who wants to develop a savings plan which can be secure his
future when the elder person retires. The saving plan is to be developed in such a way that the
client can meet the day to day requirements after retirement.
Client Overview
The elder person as per the interview requires a Mid-term savings plan which can assist the elder
person in leading a comfortable life after retirement. The elder person is still working in a
organization and still earning a comfortable salary. The age of the client is 56 years and the client
plan to retire at 60 years of age without any extension of work.
Purpose
The savings plan will be developed on the requirements of the elder person. The saving plan
requires the client to invest a monthly amount of $ 500. The policy will be a policy of 4 years
which will be paying a rate of interest of $ 4.75% per annum. The total policy amount of the
savings plan will be accumulated and paid after the end of four years either at a lumpsum amount
or on a monthly basis as per the requirement of the client. The savings plan will be securing the
post retirement expenses of the client and will be covering areas like general insurance, security,
day to day expenses, medical expenses and other client related areas of concern as per the client.

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INVESTMENT POLICY STATEMENT
Time Horizon
The time horizon as per the requirement of the client for the policy is for 4 years. The policy will
mature after 4 years and the installment for premium payments is $ 500 which will be on a
monthly basis.
Tax concerns
The savings plan which the client will be investing in will be eligible for tax deductions from the
total assessable income of the client. Therefore the policy will be providing tax benefits to the
client. Moreover at the time of maturity if the client draws the maturity amount on a monthly
basis a part of the amount will be eligible for tax whereas if the maturity amount is withdrawn in
lumpsum than the whole amount will be eligible for tax (Arrow and Kruz 2013).
Liquidity
The money invested in the policy fund will be blocked for a period of four years and the client
will be eligible for withdrawing the whole amount after the maturity of the specified period
(Brown 2012). However the client can withdraw money after a period of 2 years but this will be
terminating the policy plan reimbursing only 75% of the total capital invested.
Legal Consideration
The client needs to fill the required forms and also provide important documents such as
identification proof, addresses proof, income tax documents, Certification documents. The client
also needs to ensure that all the terms and conditions are appropriate as per the requirement of
the client.

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INVESTMENT POLICY STATEMENT
Unique Features
The savings benefit policy which the client will be taking will be providing the client an option
to either withdraw full amount or on monthly basis when the policy matures. Another things is
that the policy provides a wide coverage of some keys area of expenses of the client in
comparison to other similar policies present in the market.

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INVESTMENT POLICY STATEMENT
Reference
Arrow, K.J. and Kruz, M., 2013. Public investment, the rate of return, and optimal fiscal
policy (Vol. 1). Routledge.
Brown, R., 2012. Analysis of investments & management of portfolios.
Ovbiagele, B., Goldstein, L.B., Higashida, R.T., Howard, V.J., Johnston, S.C., Khavjou, O.A.,
Lackland, D.T., Lichtman, J.H., Mohl, S., Sacco, R.L. and Saver, J.L., 2013. Forecasting the
future of stroke in the United States: a policy statement from the American Heart Association
and American Stroke Association. Stroke, 44(8), pp.2361-2375.