Financial Management Client Memo: Understand and Mitigate Risk Overview Financial management applies to personal as well as business financial decisions. In this week's assignment, you will lay the...

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Financial Management

Client Memo: Understand and Mitigate Risk


Overview


Financial management applies to personal as well as business financial decisions. In this week's assignment, you will lay the groundwork for creating a personal retirement plan in Week 9.


This week’s analysis requires you to apply what you have learned using the textbook, as well as additional Internet and SU Library research. Also, please refer to the assignments in Weeks 2 and 4, in which you evaluated stocks and bonds as investment options and applied the concept of present value.


Scenario


For this assignment, you take on the role of a personal retirement planner who is preparing a memo for your client. In the memo, explain to the client the financial and risk considerations that go into planning for retirement.


Instructions


Write a 4–5 page paper using the following instructions:



  1. Describe the importance of factors to consider when developing a retirement plan. These will include age, marital status, number of dependents, health, life expectancy, and other sources of income such as social security and pensions.

  2. Examine the relationship between risk and return and its impact on decisions about saving for retirement. Provide examples of the relationship.

  3. Explain how risk factors (such as age and personal risk tolerance) impact the allocation of assets included in a retirement plan. Support your explanation with examples of how asset allocation changes as the risk factors change.

  4. Analyze how fiscal and monetary policies may impact retirement plans.

    1. Research how changes in fiscal policy and monetary policy can impact retirement savings.

    2. This research should include how changes in policies, including interest rates, tax rates, and policies that impact savings (IRAs, 401k), can impact retirement plans.



  5. Evaluate the implications of the time value of money with respect to saving for retirement. Support the answer with specific examples and explanations.

  6. Use 4–5 sources to support your writing. Choose sources that are credible, relevant, and appropriate. Cite each source listed on your source page at least one time within your assignment.


  7. The specific course learning outcome associated with this assignment is as follows:



    • Determine the suitability of an investment strategy that considers external risk factors and a literature review.

    • Create investment recommendations based on research that includes the rationale and risk mitigation for the chosen strategies.







Answered 3 days AfterMay 18, 2022

Answer To: Financial Management Client Memo: Understand and Mitigate Risk Overview Financial management applies...

Prince answered on May 21 2022
93 Votes
MEMORANDUM
To: Client
From: Naomie Thamuk
Date: 21st May 2022
Subject: Understand and Mitigate Risk in Retirement Plan
When planning for retirement, there are numerous financial and risk factors to consider. Among the most important considerations are:
1. How muc
h wealth would you need in retirement to maintain your preferred lifestyle? This covers things like your expected life expectancy, health-care expenditures, inflation, and whether or not you want to downsize or travel.
2. How is your financial status right now? This comprises your savings, assets, debt, and income, among other things.
3. What are your plans for retirement? This includes things like your preferred lifestyle, retirement age, and whether or not you would like to create a financial legacy.
4. What are the issues you should be aware of? Market Risks, price volatility, lifespan uncertainty, and sequencing of returns risk are all included.
5. What are the tax consequences of your retirement strategy? This includes things like your income's taxability, withdrawals from retirement funds, and the effect of any Social Security payments you could get.
6. What are your concerns about estate planning? This includes things like the successors, inheritance taxes, and whether or not a trust is required.
We understand how difficult and confusing retirement planning can be. Our staff can help you create a personalized retirement plan that is tailored to your specific needs and objectives.
The following are important aspects to consider while creating a retirement plan:
· Age is a key consideration when making a retirement plan since it affects how much years that you have to invest for retirement as well as how much income you'll need to maintain your current lifestyle. (Taylor & Doverspike, 2003)
· Your marital status is yet another key issue to consider because, if you're married, your partner's earnings and assets must be factored into your retirement plan as well.
· Consider the number of dependents you have Since the more kids you has, more and more money you'll must have in retirement plan to support them.
· Your health is a significant consideration because it will influence how long you live and how much money you would need in retirement to meet medical bills.
· Life expectancy seems to be a significant consideration because it influences how long the retirement funds should continue.
· Additional forms of revenue, such as social welfare and pensions, should be considered when making a retirement program since they can supplement your income and help you cover your needs.
When it comes to investing for retirement, the connection among return and risk is critical...
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