Financial Planning : Planning on Saving and Retirement

Running head: FINANCIAL PLANNING
FINANCIAL PLANNING
Name of the Student
Name of the University
Author Note

FINANCIAL PLANNING1
Subject: Planning on saving and retirement
Dear sister
From the given case study and statements of income and net worth, it can be
examined that your earning is sufficient income to cover the expenses of herself and her
child. Considering the retirement plan, given in the statement of net worth, that has been
invested by you for retirements benefits as per policy 403(b), this investment will help you
since it is a tax-free expense and the amount will be taxable at the time of withdrawal. It will
decrease the tax expense and increase the profit, apart from retirement benefits. Investment
on retirement benefits requires action at the earliest (Gunaratne and Nov 2015). The financial
statements are seen below:

FINANCIAL PLANNING2
Presently in insurance, the hospitals are providing a term life insurance policy with
the face amount of $10,000 whose beneficiary is your son. Covered under the hospital
indemnity plan, it is advisable for you to skip investing any amount in the insurance and start
saving some amounts for college education of her son.
Since the earning and profits after all the expenses are sufficient, it is also advised to
reduce the debt by paying in instalments and avoiding payment of interest. The rent payment
at present amounts to $900 per annum, it is also advisable to make a provision from the
earning for housing plans or else housing loan can also be taken if there is any intention of
purchasing a house.
The interest rate on credit cards is above average, so it is advisable to pay the credit
card expenses first, after that the term loans and student loan. The amount of loans are
reasonable but it is recommended to pay off the credit amount completely and better to use
debit cards in future for payments.