Financial Planning Report: Analysis of Financial Goals and Planning

This report provides a comprehensive financial analysis, offering recommendations for retirement planning, investment strategies, and debt management. The analysis examines the income, expenses, and net worth of an individual, providing guidance on managing debt, saving for education, and making informed investment decisions. The report highlights the importance of tax-advantaged retirement accounts and suggests strategies for achieving financial goals, such as purchasing a home and planning for the future. It also emphasizes the need to prioritize savings and investments to secure future financial stability, considering both immediate needs and long-term objectives. Furthermore, the report suggests strategies to manage debt and use of credit cards while also making recommendations on how to approach future financial goals such as purchasing a new car and planning for child education. The report also references academic sources to support its findings.

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

1FINANCIAL PLANNING
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:

2FINANCIAL PLANNING
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.

3FINANCIAL PLANNING
For fulfilling the goals, savings need to be done from now onwards. There are some
complex decisions which require immediate action (Lusardi and Mitchell, 2017).
Considering buying a new car, it is advisable first to sell the old car and use the amount while
purchasing a car and the balance can be paid in instalments of one year or two years. Since
these goals are not priorities it can be extended and executed after some years when the debts
get reduced. For transportation purpose, the old car can be used or even public transport can
be opted which will result in saving and execution of future goals much early than
anticipated. Emergency funding is also an option for fulfilling purposes if urgent. Since it will
increase the debt so it is not advisable to borrow more funds.
Planning for the education of the children is always comes primary in the list, so apart
from the loan some savings is necessary from the earnings which will help in the future for
child’s education. Interest on loans taken for children education or savings that are done for

4FINANCIAL PLANNING
children education is a tax-free expense and it decreases the taxable amount of income.
Finally, the savings can be used for estates planning and acquisition.
It is advisable to execute only some plans which you wish, while the primary focus
should be on saving and investment which will prove worthful and necessary in the future
such as acquiring a house or investing in the child’s future plans.

5FINANCIAL PLANNING
Reference
Lusardi, A. and Mitchell, O.S., 2017. How ordinary consumers make complex economic
decisions: Financial literacy and retirement readiness. Quarterly Journal of Finance, 7(03),
p.1750008.
Gunaratne, J. and Nov, O., 2015, June. Influencing retirement saving behaviour with expert
advice and social comparison as persuasive techniques. In International Conference on
Persuasive Technology (pp. 205-216). Springer, Cham.