Reference no: EM133074970
Jenny and Sal Gonzales are a very successful couple in their mid-30's. They have three children, and call you to discuss making changes to their current insurance policies based on their current level of income. Base the needs analysis on Sal's life.
Their financial statement is:
Jenny's After-tax income (last calendar year) $50,000
Sal's After- tax income (last calendar year) $55,000
Jointly held Investments $130,000
Jenny's RRSP's $70,000
Sal's RRSP's $65,000
Sal's Vehicle $50,000
Jenny's Vehicle $25,000
Primary Residence $1.5 Million
Cash $25,000
Mortgage $495,000
Jewelry $45,000
Antiques $30,000
Line of Credit (loan) $45,000
Credit Cards $15,000
Personal loans (cars, etc.) $25,000
Education Costs $20,000
Continuing household expenses $60,000
- If either died they would not liquidate the stock portfolio
- They are beneficiaries of each other's RRSPs
- They expect to receive $5,000 gross annually from the investment portfolio
- Investment rate are at 5%.
- Inflation is 2.25%
- Tax rate on investments is 20%
- The antiques and jewelery would not be liquidated upon the death of one.
- They would sell Jenny's vehicle in the event of either of their deaths
- They would like the calculation based on a 20-year period.
Please answer question with numbers, appropriately spaced with commas (,) and do not include $ or %.
1. What is the final assets?
2. What are the final expenses?
3. What would th econtinuing income be ?
4. What is the After-Tax inflation Adjusted Rate of Return?
5. What is the total insurance needs?
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