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FP.99 Practice Case Bloom Case Worksheet Answer Sheet.xlsx...

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Thomas and Jane BloomYou are a financial planner and you have met with new clients Thomas and Jane Bloom several times to gather information for the purposeof developing a comprehensive financial plan.Thomas Bloom is 71 years old, and his wife, Jane, is 68. They have two children, Melissa, age 40, and Jessica, age 42. They also have fivegrandchildren. Melissa has two sons, Duane, age 17, and Gregg, age 15. Jessica has a daughter Martha, age 11, and twins Berry andDickey age 8. The Bloom's are all in excellent health. Duane was recently accepted to the University of New Hampshire and will attendUNH after he graduates high school in a few months. The cost of the first year of school is $50,000 which consists of $34,000 of tuitionand $16,000 for room and board.The Blooms live in a home that they had built in 1979. The home is located in Concord, NH and is titled in both spouse's names. Thomasinherited a lakefront summer home on Lake Winnipesaukee from his father 25 years ago, which he retitled as JTWROS with Jane. Theproperty was originally purchased in 1936 by Thomas's grandfather who built a small log cabin on the property in 1938. Thomas took outa mortgage 20 years ago to modernize and expand the cabin to a year-round vacation home. Jane would like to update the kitchen andbathroom which will cost approximately $35,000. Thomas also wants to trade in his current boat worth $3,000 for a new one that will costa net amount of $22,500.Thomas worked as an accountant for a chemical company for 40 years. Jane was a cashier at various retail stores for the past 32 years.Thomas receives a monthly straight life fixed pension payment of $3,250.00 a month. Each spouse began collecting Social Security benefitsat age 64. The monthly Social Security benefits are $1,200 for Thomas and $750 for Jane. They previously had a qualified retirement accountbut the account has been depleted.Thomas recently received the following inheritance from his mother who died a few months ago. The following assets are net of any estateand/or inheritance taxes that he received:Savings Account$155,000Certificate of Deposits (3 - 18 month durations)$450,000Purchased at the same bank for $450,000.EE Bonds$35,000Purchased over a number of years for $20,000.Annuity$250,000Purchased November 1, 1980 for $40,000.Stock Portfolio$840,000See detail found under Investment Portfolio.Bond Portfolio$2,379,962See detail found under Investment Portfolio.1924 Gibson F-5 Mandolin sighed by Lloyd Loar$250,000Purchased in the 1960's for $1,500. DOD value is $245,000.Furniture$5,000Purchased over a number of years for $25,000. DOD value $5,000Florida Condo$95,000Purchased on 3/1/06 for $125,000, DOD value $95,000. There is no mortgage.$4,459,962The couple has asked you to prepare a retirement needs analysis for them to fund their remaining years in retirement. Do not use the inheritedassets that Thomas received in your calculation. Assume they have provided you with estimated expenses of $125,000 per year, and wantyou to offset this amount by their Social Security benefits and Thomas's pension. In addition, they want you to factor in the $197,000 portfolioof assets that they have saved to achieve their retirement goal. They advise you to use a 32 year retirement period, a yearly inflation rate of3.5%, and an annual return of 6.5% (assume this is an after tax investment rate). What is the lump sum the Bloom's need today to receivethe required annual payout?

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Term
Fall
Professor
NoProfessor
Tags
Balance Sheet, Thomas Bloom

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