Retirement Personal Financial Planning


Elena Diaz is 57 years old and has been widowed for 13 years.  Never remarried, she has worked full-time since her husband died—in addition to raising her two children, the youngest of whom is now finishing college.  After being forced back to work in her 40s, Elena’s first job was in a fast-food restaurant.  Eventually, she upgraded her skills sufficiently to obtain a supervisory position in the personnel department of a major corporation, where she’s now earning $58,000 a year.

Although her financial focus for the past 13 years has, of necessity, been on meeting living expenses and getting her kids through college, she feels that now she can turn her attention to her retirement needs.  Actually, Elena hasn’t done too badly in that area, either.  By carefully investing the proceeds from her husband’s life insurance policy, Elena has accumulated the following investment assets:
Money market securities, stocks, and bonds                   $72,600       
IRA and 401(k) plans                                                   $47,400    

Other than the mortgage on her condo, the only other debt she has is $7,000 in college loans. Elena would like to retire in 8 years, and she recently hired a financial planner to help her come up with an effective retirement program. He has estimated that, for her to live comfortably in retirement, she’ll need about $37,500 a year (in today’s dollars) in retirement income.

Suppose she can invest the money market securities, stocks, and bonds (the $72,600) at 5% after taxes and can invest the $47,400 accumulated in her tax-sheltered IRA and 401(k) at 7%. How much will Elena’s investment assets be worth in 8 years, when she retires?


The question belongs to Finance and it discusses about a scenario where a 57 year old working woman hires a financial planner to help her come up with a good retirement plan. A calculation of how much money she can accumulate in 8 years if she invests in money markets, securities, stocks and bonds has been given.

Total Word Count 25

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