As their financial advisor, what part of Jim and Jackie’s financial plan would you encourage them to work on?
a.
They should work on their plan for managing income.
b.
They should work on their plan for managing their liquidity.
c.
They should work on their plan for protecting their assets.
d.
They should work on their plan for protecting their income.
Update:Jim and Jackie are married with three children at home and a mortgage. Jim’s net pay per year is $67,000 and Jackie does not have income. Their mortgage payment of $2,800 includes insurance on their home. They have additional monthly expenses of $2,700.
Jim contributes 15% of his earnings to a retirement fund and they have $5,000 in savings. There is a $500,000 life insurance policy on Jim and a $100,000 policy on Jackie.
Answers & Comments
Verified answer
They have an eight month emergency fund?
Do they have medical insurance?
Do they have a trust?
Can they refi their loan for a lower interest rate? Bank of the West has the fastest loan turnaround in my experience. Mine only took two weeks.
Can they reduce their $2,700 in monthly expenses? Their total expenses seems a bit steep for what they're earning.
Is their home under rights of survivorship?
Is their retirement account portfolio diversified?
These are the immediate questions that come to mind.
5000 in savings is not nearly enough, they should build that up to handle 6 months of expenses, and maybe J should get a job