THE ROUGH SCRIPT

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Centennial College *

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226

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Finance

Date

Jan 9, 2024

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docx

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6

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THE ROUGH SCRIPT INTRODUCTION (Rajinda): Good afternoon, James and Maria. Thank you for joining us today. I'm Rajinda, and this is my colleague, Jaspreet. We're here to discuss your comprehensive financial plan. FINANCIAL GOALS OVERVIEW (Jaspreet): Let's start by reviewing your short-term, mid-term, and long-term financial goals. James, you've mentioned a plan to retire in 5 years and focus on part-time writing. How does that align with your current aspirations? James: Well, I've been teaching for quite some time, and I want to explore my passion for writing. Retiring in 5 years would give me the freedom to do that. Maria, we've noticed your emphasis on Andreas' education fund and real estate investment. Can you share your thoughts on these mid-term goals? Maria: Absolutely. Education is a priority, and I want to make sure Andreas has the best opportunities. Real estate seems like a stable income source for our future. PERSONAL INFORMATION (Rajinda): Before we dive deeper, let's briefly recap your personal information. James, with your plan to retire, have you considered what you'd like to do post-retirement with your time? James: Definitely, I want to continue writing and maybe take up some projects I've put on hold. Maria, how's the work-from-home setup and balancing client meetings while taking care of Andreas? Maria:
It as its challenges, but it gives me flexibility. I can manage work and spend time with Andreas, which is essential for us. FINANCIAL ASSUMPTIONS (Jaspreet): Now, let's consider the financial assumptions that underpin our plan. James, you're planning an early retirement at 58. Can you share your thoughts on this decision? James: I've been planning for it, and I feel it's the right time for a change. I want to enjoy life and pursue my interests. Maria, how do you feel about the assumed 2% annual increase in future expenses? Maria: It makes sense. As our family grows, expenses will likely increase. Planning for that is crucial. FINANCIAL MANAGEMENT (Rajinda): Moving on to your financial overview, your total assets amount to $1,640,000 with a net worth of $1,025,000. Any concerns or thoughts about the emergency fund and optimizing expenses? James: The emergency fund is a good idea, especially with the potential changes coming up. I'll look into optimizing our expenses. Maria: Agreed. It's essential to have that financial cushion for unexpected situations.
EDUCATION PLANNING (Rajinda): Jumping into education planning, the RESP seems like a solid strategy for Andreas' future. James, what's your take on the planned contributions? James: It sounds reasonable. I want to make sure Andreas has the financial support he needs for education. Maria: Yes, that’s seems like a good plan. TAX PLANNING (Rajinda): Let's explore your tax situation. Combined taxable income is $155,000. James, have you considered contributing to RRSPs to lower your taxable income? James: It's a good suggestion. I haven't maximized my contributions yet, so that's something to explore. Maria: Any other strategies we should consider for tax reduction? Rajinda: We could explore income-splitting strategies and leverage available tax credits.
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RETIREMENT PLANNING (Jaspreet): Now, onto retirement planning. The desired retirement income is $120,000 annually. James, how does the anticipated income align with your expectations for post- retirement activities? James: I'm planning to supplement it with some writing projects. The extra income will help maintain our lifestyle. Jaspreet: We recommend increasing RRSP contributions and exploring additional ways to supplement retirement income. INVESTMENT PLANNING (Jaspreet): we recommended asset allocation would be: - International and Canadian equities: 50% - Fixed Income: 40% (Cash and Bonds) - 10% of real estate investment is in rental properties. Through equity investments, this allocation seeks to offer growth potential, but it also keeps a sizeable amount of cash and fixed income on hand to protect capital and offer stability. Maria: I'm open to that. Diversification seems like a smart approach. James: How would that impact our overall risk? Rajinda: Diversification helps spread risk, making your portfolio more resilient to market fluctuations.
INSURANCE AND RISK MANAGEMENT (Rajinda): To cover off the mortgage, we recommend purchasing 2 term insurance policies. One of $330,000 for primary residence and $240,000 for the investment property, 25 years each. James: I agree. Things have changed, and it's important to make sure we're adequately covered. Maria: What about coverage for spousal support and future childcare costs? Jaspreet: We'll ensure the insurance coverage considers those aspects, Maria. WILLS AND POWER OF ATTORNEYS (Rajinda): Turning to estate planning, we recommend updating your legal documents, reviewing executor and guardianship selections, and communicating your plans to avoid misunderstandings. James: It's been a while since we looked at our wills. I think updating them is a good idea. Maria: Any specific changes we should consider? Rajinda: It's mostly about reflecting your current preferences and ensuring everything is up-to-date.
RECOMMENDATIONS AND NEXT STEPS (Jaspreet): Prioritize tasks such as legal documents review, life insurance assessment, and emergency fund evaluation. For investment and retirement planning, rebalance portfolios and maximize tax-advantaged contributions. Keep up with RESP contributions, review insurance policies, and take necessary actions. James: These recommendations make sense. It's a lot to process, but it's all crucial for our future. Maria: I appreciate the guidance. It's reassuring to have a clear plan in place. CONCLUSION (Rajinda): In conclusion, regular evaluations and updates are crucial to align your financial plan with changing needs. We'll schedule follow-up meetings to ensure everything is on track and adjust the plan as necessary. Thank you for entrusting us with your financial journey. Any final thoughts or questions?
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