Reference no: EM133233553

Your paper and presentation should be to the Fox family not to the FIN 401 instructor. For instance, do not write: "I would tell the Foxes...". During the presentation days, the instructors will ask questions as if they were Frank and Lois.

Start with the attached information and the following details.

• Today is 1/1/2019
• Frank and Lois are married and were each born on 1/1/1977. They wish to retire on 1/1/2040 and have asked you to build a retirement plan until their 90th birthday. They have 1 child, age 6, whom they claim as a dependent. They would like to save to pay for 70% of the cost of Michigan State University in 12 years at a current total (tuition, room and board, books, and expenses) cost of $21,000/yr.
• Overall Inflation = 4%
• Post retirement rate of return on assets = 6%
• Pre-retirement rate of return on assets = 7%
• Please note that during the year, Frank and Lois had the following stock transactions:
  • 12/21/18 in Joint Brokerage account - Sold 500 shares ABC corp. for $8,000. Shares were purchased 12/15/2008 for $12,000.
  • 12/20/2018 in Frank's 401(k) - Sold 2,000 shares XYZ mutual fund for $8,000. Shares were purchased 12/27/2008 for $6,200.

For each problem, retype the question and put your entire answer under that question before beginning the next question. If Frank and Lois are not able to reach their goals without changes to their approach, please be specific as to the steps you recommend that they take.

1. Social Security
   • If they ask you to include Social Security in their retirement projections, what advice would you give them?
2. Insurance
   • Comment on their insurance needs and your recommendations for Frank and Lois.
   • Assume in all circumstances that they would want to maintain a lifestyle similar to their current lifestyle.
   • Be specific as to amounts and types of insurance that you recommend.
   • Include comments on life, disability and long term care at a minimum.
3. Estate
   • Comment on their estate planning needs assuming they do not have an estate plan today.