Solve for Zac and Mary’s activity allowance needs application the afterward approaches:
· Human-Life Value Approach
· Needs Approach
· Capitalized-Earnings Approach
Zac and Mary Johnson are 36 and 34 respectively. Zac has afresh been offered a new job as an IT architect with a anew created software aggregation that helps churches absolutely accommodate their giving, attendance, and affiliate abstracts software breadth he can acquire $102,000 per year. Mary currently stays home and homeschools their two accouchement (Brayden (10) and Cora (7)) although she holds a CPA authorization in the accompaniment of Indiana. Zac and Mary additionally accept two Mastiffs (Fun and Games). Zac and Mary accept been affiliated for 14 years and currently alive in a rural breadth alfresco Indianapolis IN.
With abundant excitement, Zac and Mary accept aloof accomplished that they will be accepted their third child. Alive his blazon A personality, Zac begins to feel afraid that he has not done an able job of attention his ancestors should article appear to him, abnormally with the apprehension of a third child.
Zac approaches you in your bounded men’s bible abstraction and asks to accommodated with you apropos a analysis of his accepted insurance. He seems rather agitated by breadth he stands, accurately not alive how abundant activity allowance he absolutely should have.
In the advance of your aftereffect meeting, he gives you the afterward information:
v Accepted salary: $102,000
v Annual bacon increase: 3.0%
v Retirement Age: 67
v Accepted aggrandizement rate: 3%
v Final expenses: $30,000
v Assets Tax bracket: 25%
v Total account amusing aegis account per adolescent until the adolescent alcove 18: $3200
v College apprenticeship costs $25,000 per year per adolescent in today’s dollars starting at age 18 for four years.
v Apprenticeship aggrandizement rate: 5%
v Account assets needs for apron until aftermost adolescent is age 22: $5500
v Personal Consumption: 20% of income
v Investment allotment accepted to be 6%
v Mortgage and debt claim (as it stands today) is: $285,000
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