Learn to use GoalsMapper for a single professional to map out his goals and scenarios. Suggested answer provided.

1. Practice Cases
REDEFINING FINANCIAL PLANNING

3. Stanley Koh
Stanley Koh (Accountant) DOB : 03/11/1990 Single Non Smoker
Retirement Age @ 55
Assets Cash $50,000 Car (8yrs) $70,000 Unit Trust $30,000 @ 5%.p.a.
CPFOA $50,000 CPFSA $18,000 CPFMS $20,000
Liabilities Car Loan $35,000 @ 25 i=3.5% 5 years loan
Income $5,000 per month (2 month bonus) @ 4% increment
Expenses Transport (Life) $1,000 / mth Parent allowances (20 years) $500 / mth
Personal (Life) $1,000 / mth Vacation (Life) $3,000 / year
Insurance Pru Life 20 pay (@ 23) SA : $100,000 – Death, Disability, Critical Illnesses
Premiums $250 / mth Coverage for Life, so no maturity benefits
Questions 1) How old will he run out of money during retirement?
2) How much is he spending at Age 40 on travelling?
3) Why does his expenses drop at Age 46?
4) How much is he earning before he retires?

4. Stanley Koh
Goals
Get Married @ 30 Spends $20,000 on wedding
Buy Property @ 31 Spends $50,000 from cash for downpayment
Property Value $250,000
Mortgage Loan $200,000, i=2.6% (30 years) by CPF.
Having a Child @ 32 Spends $5,000 on delivery
Hire a Maid $350 / mth for 10 years
Send Child for Childcare $250 / mth for 6 years
University @ 49 $25,000 / yr for 4 years
Replace Car @ Age 34 Spends $100,000 on downpayment
Car Value $200,000 Car Loan $100,000, i = 3% (7 years)
Questions 1) How do you advise his current cashflow?
2) Which are the goals he should go ahead with?
3) What are his options if Stanley wants to get his car?

5. Stanley Koh
Scenarios
Disability @ 35 Active income drops to $1,000 / mth.
Expenses: Choose to continue Parents Allowance. Vacation stops.
Medical increase by $500 / mth.
Critical Illness @ 35 Active income stops for 5 years, thereafter earning $5K / mth
Expenses: Medical increases by $2,000 / mth for 5 years.
Career Change @ 45 Take an income cut of 50% to pursue pro-bono or volunteer
work. Stop travelling.
Retirement Lifestyle Expenses: Personal increase by 50%. Vacation increases by 30%.
Liquidate Unit Trust
Questions 1) What is his critical illness and disability expenses shortfall respectively?
2) What budget should he allocate for protection benefits?
3) What options Stanley have to better prepare for his career change?
4) How can Stanley prepares for his retirement lifestyle?

6. Stanley Koh
You have more or less ascertain Stanley’s financial health and his financial goals. You also get him to
see the scenarios he wants to cater for, both risk events and lifestyle changes. Stanley is very
impress with the high resolution and dynamic planning.
Questions 1) Which goals would Stanley likes to plan for first?
2) What are the key scenarios he wants to cater for? What budget would you
allocate to handle each of the risk scenario?
3) What insurance/ investment plans would you recommend he gets? How
would you show him how these plans help him?
4) Would Stanley refers other to your GoalsMapping process? Which target
market and how would you ask for referrals?

7. Stanley Koh
1. 91
2. $4.41k
3. Parents allowance ends at 46
4. $189.51k take-home income
5. Current cashflow is $10.11k which is 18% of his take-home income. His savings ratio is within
healthy range although as a single, he can aim to save more.
6. Get married, buy property, having a child
7. Shortfall is $44.41k. Stanley’s option to get the car is 1) Get a car below $155k or 2) Sell off his
Unit Trust at 34
8. Based on first 3 goals achieved and PruLife payout, CI and disability shortfall till age 55 are
$559.16k and $ 1.37m respectively.
9. He can allocate ~30% of his free cashflow for protection (term and whole life CI)
10. If he goes 50% income reduction, his child’s education will eat into his saving. Total shortfall is
$38k+$37k+$36k+$35k = $146k. He can use a child education policy to fund part of it.
11. Once his retirement lifestyle sets in at 55, his cash will run out at 82 (from 86). Using the cash
savings line, the lowest point is at 32 ($43.18k, 6 years later). Hence, he can set aside no more
than $7k per year into a retirement plan (ILP or endowment)

8. The End