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Giselle currently has 25 years of service and an average salary of $38,000 over

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1. Giselle currently has 25 years of service and an average salary of $38,000 over;her last five years of employment. She was looking forward to retirement but has;been offered a promotion. If she continue to work for five more years and;increases her average annual salary to $48,000, how will her monthly pension;benefit change according to the typical pension benefit formula as described in;this chapter?;a. If Giselles plan is similar to most pension plans, how will it adjust for;inflation?;2. Assuming a 6.8 percent annual return with Houston Community College;Education Savings Account, how much would $1,300 annual contributions be;worth when the child is 18 and ready to enter college? (Hint, Use your financial;calculator.);3. Alexis is age 25, just graduated from college, accepted her first job with a net;(after-tax) $53,000 salary, and is already looking forward to retirement in 40;years. She assumes a 2.2 percent inflation rate and plan to live in retirement for;20 years. She does not want to plan on any Social Security benefits. Assume;Alexis can earn a 7 percent rate of return on her investment prior to retirement;and a 4 percent rate of return on her investments post-retirement to answer the;following questions using your financial calculator.;a. Alexis want to replace 90 percent of her current net income. What is her;annual need in todays dollars?;b. Using the table below, Alexis thinks she might have an average tax rate of;13 percent at retirement if she is married. Adjusting for taxes, how much;does Alex really need per year, in todays dollars?;c. Adjusting for inflation, how much does Alexis need per year in future;dollars when she begins retirement in 40 years?;d. If she needs this amount for 20 years, how much does she need in total;for retirement? (Hint, use the inflation-adjusted rate of return);e. How much does Alexis need to save per month to reach her retirement;goal assuming she does not receive any employer match on her;retirement savings?;Chapter 17;4. Ruthena had a $994,000 net worth at the time of her death in 2012 not including;the cash value of her life insurance. At the time of her death she owned a;$252,000whole life policy with $38,959 of accumulated cash value, her niece was;designated as the beneficiary. She also had a $129,200 pension plan benefit;also payable to her niece.;a. What is the value of Ruthenas gross estate?;b. The portion of her estate that is taxable is?;c. The portion of her estate that must pass through probate is?;5. Gerry and her husband Kwesi, each own assets valued at $3,200,000. If Kwesi;dies in 2015 and leaves all of his assets to Gerry, without the use of a trust;agreement, how much of his estate will be subject to tax?;a. If Gerry were also to pass away in 2015, after receiving Kwesis assets;what will be her estate tax liability;Chapter 18;6. What factors should a married couple consider when choosing to have one or;more checking accounts?;a. Credit Cards?;a.i. Having separate credit card accounts assures that both spouses;are establishing a credit history that would enable them to get credit;in the future even after a Death, Divorce, or Separation. Explain;in detail if you agree or disagree with this statement.

 

Paper#25037 | Written in 18-Jul-2015

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