Continuing Case Study: Retirement Planning

Shelby and Mark Lawrence are less than 20 years away from retirement. They have one child in college and one in high school. Their primary goals are to help their children with their college expenses and plan for their retirement.

Currently, the balance in Marks pension plan at work is $102,000. This balance is smaller than he would have liked due to fluctuations in the stock market. In addition, the investment plan that he and Shelby started many years ago is now worth $35,000 (includes mostly bond investments and mutual funds). Last year, they had considered an investment in a limited real estate partnership but decided the timing was not right since Blair had begun college. At this point, Shelby and Mark want to evaluate their retirement plans and determine whether they will have enough to fund their retirement.

Their life situation: Shelby is age 45, Mark, age 46. They have two children 19 and 13. Their financial data is:

Monthly gross income      $8,000
Living expenses              $6,500
Assets                              $230,000
Liabilities                          $85,000.

How would you assess the strengths and weaknesses of the Lawrences financial condition at this stage in their lives?

At their current ages, what should their major priorities be as they continue to plan for retirement?

Explain how Shelby and Mark might use the Personal Financial Planner sheets on Retirement Housing and Lifestyle Planning and Forcasting Retirement Income.

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