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    With two children in college, the Turner once again find their life situation changing. Compared to five years ago, their total assets have declined due to college expenses. The Turner's oldest child will graduate next year, but the youngest will enter college in a couple of years. The drain on the family's finances will continue.
    While the family's finances are adequate, both Jenny and Jeff are beginning to think more about retirement. Over the years, Jeff has taken advantage of different career opportunities. Today his annual salary is higher than ever. However, his employment changes have resulted in a smaller pension fund than would have been available had he remained with the same organization.
    The current value of his pension plan is just over $115,000. The investment program Jenny and he started almost 10 years ago is growing and is now worth about $62,000. But they still worry whether they will have enough money to finance their retirement when Jenny retires in 15 years.
    Jenny and Jeff should also be concerned with various estate planning actions. They have talked about a will and investigated the benefits of several types of trusts. However, they have not taken any specific actions.
    Life Situation Financial Data
    Jenny, 48
    Jeff, 50
    3 Children, ages 21, 19 and 16 Monthly income $6,700
    Living expenses $5,600
    Assets $242,500
    Liabilities $69,100

    Question: What are some important decisions they need to make regarding their estate planning?

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    Solution Preview

    The Turners need to refocus their efforts on saving for retirement. It is important not to let college expenses impact these plans. There are other ways to fund college, but at retirement there will be no options left open to them. It is unclear if the "investment program" Jenny started is in a tax-deferred plan such as an IRA. If not they should start one right away and make the maximum allowable annual contribution it. Each of them can have a separate IRA, and their annual contributions would be $12000 ($5,500 for Jenny and $6,500 for Jeff). In addition they need to determine if that is enough to put them on track to retire in 15 years.

    There are different methods for determining how much retirement income is needed. They should choose one that makes sense for ...

    Solution Summary

    Retirement planning for a couple with children in college