Financial Planning Research Paper Example | Topics and Well Written Essays - 1250 words

Financial Planning - Research Paper Example Financial Planning James Patterson wishes to retire by the age of 56. Nevertheless, if retirement at the age of 56 looked difficult he would consider cutting back to 4 days one year, then 3, and so on. The age pension would start from the time Mr. Patterson attains the age of 65. So it is imperative that Mr. Patterson makes proper arrangement for the financial needs arising during the big gap from the age of 56 to 65. Thus, his prime objective is to accumulate sufficient Retirement Income to fulfil all his responsibilities during that period in addition to fulfilling his personal interests. The interests of James Patterson after retirement comprise of travelling extensively, and attending summer school courses on aspects of ancient history particularly about Greece and Rome among others. He also wants to remain associated with Community Aid and one of his prime responsibilities is to look after his aged mother, and his nephew and nieces. The target retirement income that Mr. Patterson is looking forwar d to is equivalent to 60% of his pre-retirement income. The disposable income of James Patterson at present is $50567, 60% of which would be equivalent to $30340. Thus, the client would require an annual income of around $30340 following his retirement after about 5 years. He could continue to require an income of $30340 for at least the subsequent 9 years, until he attains the age of 65 and his age pension starts.... On the basis of the information provided by Mr. Patterson and the following discussions, his lifestyle objectives and goals were reviewed. The recommendations provided in this financial have been developed to help Mr. Patterson in accomplishing these objectives: Living Expenditure: Mr. James Patterson would like to afford for his living expenses of around $30,500 per year. Holidays: James Patterson would like to expend $5,000 on a travel holiday every year. Family: James Patterson has a large extended family comprising of his mother and five siblings. He intends to take care of her mother and also assist his nephews and nieces financially. Retirement: James Patterson would like to withdraw from full time work in 5 years time when he attains 56 years of age. He is willing to draw down on his capital with the purpose of accomplishing her retirement objectives. Identification of Issues and Problems The total cumulative value of capital and assets owned by James Patterson is equivalent t o $718,781. Assuming the life expectancy level of Mr. Patterson to be 80 years, he needs to arrange for the financial requirements of 25 years. It should be noted that the client intends to retire at 55. He would get some amount of assistance from the Age pension after he attains the age of 65. However, he needs to build a decent corpus of capital for his retirement plans. Mr. Patterson is single and does not have any direct responsibility of a family, but the downside is that he has to prepare for his old age finances on his own. The present level of savings will most likely not be adequate to build up the assets essential for Mr. Patterson to be able to preserve his preferred standard of living post retirement.