home purchase price 140000 in 1987 Bobs current equity is 40000 50000 in a

Home purchase price 140000 in 1987 bobs current

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home (purchase price $140,000 in 1987; Bob’s current equity is $40,000); $50,000 in a rainy-day fund(invested in a short-term money market mutual fund with Fidelity Investments); and $24,000 in a FidelityGrowth and Income Fund for his daughter’s college tuition. He has a term life insurance policy with avalue of $580,000; this policy has no asset value but pays its face value (plus inflation) as long as Bobcontinues to pay the premiums. He has no outstanding debts in addition to his mortgage, other thanmonthly credit-card charges. Should Bob die while insured, the proceeds on his life insurance are tax freeto his wife. Similarly, if he dies before retirement, his retirement assets go to his wife tax free. one ofthem can convert retirement assets into annuities without any immediate taxation; the monthly incomefrom the annuities is then taxed as ordinary income. Bob’s mother is 72 and in good health. She is retiredandliving in a co-op apartment in Manhattan. Her net worth is on the order of $300,000. His mother-in-law,who is 70, lives with her second husband. Her husband is 87 and has sufficient assets to pay for nursinghome care, if needed, for his likely remaining lifetime. Upon her husband’s death, Bob’s mother-in-law
will receive ownership of their house in Newton, Massachusetts, as well as one-third of his estate (theremaining two-thirds will go to his two children). Her net worth at that point is expected to be in the$300,000 – 400,000 range. Bob’s goal is to work until he is 60 or 65. He would like

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