Gordon and Colleen Howe Mini Case Today is January 1, 2023 Gordon and Colleen Howe both 36 years old. Mr Howe recently accepted a job making $93K a year, Mrs. Howe is currently unemployed. They have one child who is 4 years old, an English Setter and Maine Coon Cat. Both are licensed lawyers and have been married for eight years The Extended Family Mr. Howe has a mother in her 60s who is living far away and is modestly self-sufficient. Mr. Howe has two siblings both married and self-sufficient. Mr Howe inherited $400K from his late Uncle Stan who was 100 years old when he died and had worked every day of his life. He has spent the inheritance down to $200K. Mrs Howe has one brother who is married, wealthy and has two children. Mrs Howes mother is a pharma distributor and lives in another state she is 60 and self-sufficient. Mrs Howes father lives in the same town as the Howes and her father is self- sufficient and healthy. Mrs Howes Father (Trust 1) Mrs Howes father set up a trust for the benefit of Mrs Howe. Her brother is trustee, but it is really controlled by the father. The trust distributes $30K/year to Mrs Howe. The basis is $700K and it has an average earnings rate of about 8.5% per year for the last 10 years. There is no plan to increase distributions. Economic Info Inflation averages 3% for last 20 years and expected to continue at 3% Bank lending rates: 15 year 5.25%; 30 year 6.75%; Any closing costs associated with refinance are 3% and included in refinanced mortgage. Expected rate of return 8.5% Residence Current value $550K; Balance on 30-year mortgage at 5.5% $260,514; Land value $150K; Monthly payment (P&I) $1703.37; Owned home for 8 years; Will not qualify for refinance until Mr. Howe has been with his current employer for one year. Life - No life insurance; Mr Howe expects $50K group term from new employer Health Covered under Mr Howe employer plan; Cost $1K/month for family Disability No disability; Mr Howe will be covered for LTD provided by employer at 65% of gross pay. Homeowner HO3 with open perils and replacement value; $250 deductible; Dwelling covered$300K with 80/20 coinsurance clause; Premium $2400/year. Auto - $250 deductible; 100/300/50; Premium $1800/year Assets JT Bank account $28K JT Inherited portfolio $200K C Brokerage account $127K G401K $32K with brokerage account JT Residence $550K JT Auto 1 $40K G Auto 2 $25K JTHH Items $150K JT Liabilities Mortgage $260514 Other Financial Annual Expenses Annual contributions to 401K $17500 SS Taxes $7115 Federal WH $10384 State WH $3715 Property tax $3000 Tuition to preschool $15K Utilities $2400 Entertainment $1200 Clothing $2000 Auto maint/gas $3000 Food $9600 Investments Investment portfolio $327K Brokerage account includes gifts from Mrs Howes father invested in money market account at 0% earnings 401K from Mr Howes prior job invested in index fund Asset Current $ Expected Returns Portfolio Percentage Cash $28,000 0% 7% T Bonds $0 4% Corp Bonds $0 6% International B.

1. Gordon and Colleen Howe Mini Case
Today is January 1, 2023
Gordon and Colleen Howe both 36 years old. Mr Howe recently accepted a job making $93K a
year, Mrs. Howe is currently unemployed. They have one child who is 4 years old, an English
Setter and Maine Coon Cat. Both are licensed lawyers and have been married for eight years
The Extended Family
Mr. Howe has a mother in her 60s who is living far away and is modestly self-sufficient. Mr.
Howe has two siblings both married and self-sufficient. Mr Howe inherited $400K from his late
Uncle Stan who was 100 years old when he died and had worked every day of his life. He has
spent the inheritance down to $200K. Mrs Howe has one brother who is married, wealthy and
has two children. Mrs Howes mother is a pharma distributor and lives in another state she is 60
and self-sufficient. Mrs Howes father lives in the same town as the Howes and her father is self-
sufficient and healthy.
Mrs Howes Father (Trust 1)
Mrs Howes father set up a trust for the benefit of Mrs Howe. Her brother is trustee, but it is
really controlled by the father. The trust distributes $30K/year to Mrs Howe. The basis is
$700K and it has an average earnings rate of about 8.5% per year for the last 10 years. There is
no plan to increase distributions.
Economic Info
Inflation averages 3% for last 20 years and expected to continue at 3%
Bank lending rates: 15 year 5.25%; 30 year 6.75%; Any closing costs associated with refinance
are 3% and included in refinanced mortgage.
Expected rate of return 8.5%
Residence Current value $550K; Balance on 30-year mortgage at 5.5% $260,514; Land value
$150K;
Monthly payment (P&I) $1703.37;
Owned home for 8 years; Will not qualify for refinance until Mr. Howe has been with his current

2. employer for one year.
Life - No life insurance; Mr Howe expects $50K group term from new employer
Health Covered under Mr Howe employer plan; Cost $1K/month for family
Disability No disability; Mr Howe will be covered for LTD provided by employer at 65% of
gross pay. Homeowner HO3 with open perils and replacement value; $250 deductible;
Dwelling covered$300K with 80/20 coinsurance clause; Premium $2400/year. Auto - $250
deductible; 100/300/50; Premium $1800/year
Assets
JT Bank account $28K
JT Inherited portfolio $200K
C Brokerage account $127K
G401K $32K with brokerage account
JT Residence $550K
JT Auto 1 $40K
G Auto 2 $25K
JTHH Items $150K
JT Liabilities Mortgage $260514
Other Financial Annual Expenses
Annual contributions to 401K $17500
SS Taxes $7115
Federal WH $10384
State WH $3715
Property tax $3000
Tuition to preschool $15K
Utilities $2400
Entertainment $1200
Clothing $2000
Auto maint/gas $3000
Food $9600
Investments
Investment portfolio $327K

3. Brokerage account includes gifts from Mrs Howes father invested in money market account at
0% earnings
401K from Mr Howes prior job invested in index fund
Asset
Current $
Expected
Returns
Portfolio
Percentage
Cash
$28,000
0%
7%
T Bonds
$0
4%
Corp Bonds
$0
6%
International
Bonds
$0
7%
Index Fund
$159,000
9%
41%
Large Cap Fund
$200,000
10%
52%

4. Mid/Small Funds
0
12%
International Stock Fund
0
13%
Real Estate Funds
0
8%
Total
$387,000
8.5%
Residence
Current value $550K; Balance on 30 year mortgage at 5.5% $260,514; Land value $150K;
Monthly payment (P&I) $1703.37; Owned home for 8 years; Not qualify for refi until Mr Howe
in new job 1 year
Estate Info - No estate planning documents
Goals and Concerns
Want proper insurance, investment and estate portfolio
Want to know cost of college education for their child so they can approach Mrs Howes father
about funding a 529 plan. Current cost of education $20K in todays dollars with expected 5%
inflation. Expect the child to be in school six years and expect rate of return 8.5%
Want to plan for early retirement (100% WRR, excluding trust income) at age 62. Mr Howe to
save $17500/yr in 401K with an employer match of $6K. Expect to live to age 90. Do not
include SS benefits in planning.

5. Want to be debt free at retirement
Analysis Part A
1. Prepare personal financial statements (income statement, balance sheet)
2. Based on the information from Question 1, prepare pie charts for use in a presentation to the
client.
3. Compare the available information to benchmarks and determine strengths and weaknesses.
What recommendations would you make to improve their results against the benchmarks.
4. Calculate the following & comment on each (show calculations) and compare to benchmarks:
Emergency fund ratio
Savings Rate
Current Ratio assuming only Mortgage Liability
Housing 1
Housing 2
5. Education and Education Funding
Calculate the present value of education (college starts at the age of 18) using an investment rate
of return of 8.5% assume 5 years of education 5% education inflation. Assume the annual
payments will be made for 15 years.
a. FV of education Funds needed in todays dollars
b. PV of education costs Funds needed upon entering college
c. How much per year will the Howes need to save for their childs education, annual savings
required.

6. 6. Retirement Analysis
a. Calculate the future value of the Howes retirement needs at age 62, based on WRR.
b. Calculate the present value of the Howes retirement needs now at age 62, real dollars in todays
dollars.
c. Calculate the Present Value of retirement funds needed at their current age.
d. Calculate the annual savings required to meet the Howes Retirement Goal
7. Review the information from questions 1 thru 4 and determine if the Howe family can meet
the annual contribution and provide suggestions to the family.
Analysis Part B
8 - Prepare an analysis of the Howes risk management insurance coverage using the following
format:
Metric
Actual
Recommended
Cost/Savings
Life Insurance - His
12-16 x Gross Pay
None
Needs $1.5M 30 year term due to level of assets and income
Cost $1,080
$.72 per $1000

7. 9 Describe the estate planning documents the Howes need immediately and what are the
important provisions of each? If you recommend powers, who is the power holder?
10- Perform analysis of the Howes portfolio taking into consideration risk tolerance and asset
allocation. Assume they are aggressive investors (goal of 10% return) and revise asset allocation
to achieve this goal. Assume risk tolerance appropriate for their age and years to retirement

8. 11. Based on your analysis what are the strengths and weaknesses of the Howe family financial
plan and overall financial condition. What recommendations would you make to them based on
your analysis. What additional information would you need to do a complete analysis. SWOT
type analysis
Gordon and Colleen Howe Mini Case
Today is January 1, 2023
Gordon and Colleen Howe both 36 years old. Mr Howe recently accepted a job making $93K a
year, Mrs. Howe is currently unemployed. They have one child who is 4 years old, an English
Setter and Maine Coon Cat. Both are licensed lawyers and have been married for eight years
The Extended Family
Mr. Howe has a mother in her 60s who is living far away and is modestly self-sufficient. Mr.
Howe has two siblings both married and self-sufficient. Mr Howe inherited $400K from his late
Uncle Stan who was 100 years old when he died and had worked every day of his life. He has
spent the inheritance down to $200K. Mrs Howe has one brother who is married, wealthy and
has two children. Mrs Howes mother is a pharma distributor and lives in another state she is 60
and self-sufficient. Mrs Howes father lives in the same town as the Howes and her father is self-
sufficient and healthy.
Mrs Howes Father (Trust 1)
Mrs Howes father set up a trust for the benefit of Mrs Howe. Her brother is trustee, but it is
really controlled by the father. The trust distributes $30K/year to Mrs Howe. The basis is
$700K and it has an average earnings rate of about 8.5% per year for the last 10 years. There is
no plan to increase distributions.
Economic Info
Inflation averages 3% for last 20 years and expected to continue at 3%
Bank lending rates: 15 year 5.25%; 30 year 6.75%; Any closing costs associated with refinance
are 3% and included in refinanced mortgage.
Expected rate of return 8.5%
Residence Current value $550K; Balance on 30-year mortgage at 5.5% $260,514; Land value
$150K;

9. Monthly payment (P&I) $1703.37;
Owned home for 8 years; Will not qualify for refinance until Mr. Howe has been with his current
employer for one year.
Life - No life insurance; Mr Howe expects $50K group term from new employer
Health Covered under Mr Howe employer plan; Cost $1K/month for family
Disability No disability; Mr Howe will be covered for LTD provided by employer at 65% of
gross pay. Homeowner HO3 with open perils and replacement value; $250 deductible;
Dwelling covered$300K with 80/20 coinsurance clause; Premium $2400/year. Auto - $250
deductible; 100/300/50; Premium $1800/year
Assets
JT Bank account $28K
JT Inherited portfolio $200K
C Brokerage account $127K
G401K $32K with brokerage account
JT Residence $550K
JT Auto 1 $40K
G Auto 2 $25K
JTHH Items $150K
JT Liabilities Mortgage $260514
Other Financial Annual Expenses
Annual contributions to 401K $17500
SS Taxes $7115
Federal WH $10384
State WH $3715
Property tax $3000
Tuition to preschool $15K
Utilities $2400
Entertainment $1200
Clothing $2000
Auto maint/gas $3000
Food $9600

10. Investments
Investment portfolio $327K
Brokerage account includes gifts from Mrs Howes father invested in money market account at
0% earnings
401K from Mr Howes prior job invested in index fund
Asset
Current $
Expected
Returns
Portfolio
Percentage
Cash
$28,000
0%
7%
T Bonds
$0
4%
Corp Bonds
$0
6%
International
Bonds
$0
7%
Index Fund
$159,000
9%
41%
Large Cap Fund
$200,000

11. 10%
52%
Mid/Small Funds
0
12%
International Stock Fund
0
13%
Real Estate Funds
0
8%
Total
$387,000
8.5%
Residence
Current value $550K; Balance on 30 year mortgage at 5.5% $260,514; Land value $150K;
Monthly payment (P&I) $1703.37; Owned home for 8 years; Not qualify for refi until Mr Howe
in new job 1 year
Estate Info - No estate planning documents
Goals and Concerns
Want proper insurance, investment and estate portfolio
Want to know cost of college education for their child so they can approach Mrs Howes father
about funding a 529 plan. Current cost of education $20K in todays dollars with expected 5%
inflation. Expect the child to be in school six years and expect rate of return 8.5%
Want to plan for early retirement (100% WRR, excluding trust income) at age 62. Mr Howe to

12. save $17500/yr in 401K with an employer match of $6K. Expect to live to age 90. Do not
include SS benefits in planning.
Want to be debt free at retirement
Analysis Part A
1. Prepare personal financial statements (income statement, balance sheet)
2. Based on the information from Question 1, prepare pie charts for use in a presentation to the
client.
3. Compare the available information to benchmarks and determine strengths and weaknesses.
What recommendations would you make to improve their results against the benchmarks.
4. Calculate the following & comment on each (show calculations) and compare to benchmarks:
Emergency fund ratio
Savings Rate
Current Ratio assuming only Mortgage Liability
Housing 1
Housing 2
5. Education and Education Funding
Calculate the present value of education (college starts at the age of 18) using an investment rate
of return of 8.5% assume 5 years of education 5% education inflation. Assume the annual
payments will be made for 15 years.
a. FV of education Funds needed in todays dollars
b. PV of education costs Funds needed upon entering college
c. How much per year will the Howes need to save for their childs education, annual savings
required.

13. 6. Retirement Analysis
a. Calculate the future value of the Howes retirement needs at age 62, based on WRR.
b. Calculate the present value of the Howes retirement needs now at age 62, real dollars in todays
dollars.
c. Calculate the Present Value of retirement funds needed at their current age.
d. Calculate the annual savings required to meet the Howes Retirement Goal
7. Review the information from questions 1 thru 4 and determine if the Howe family can meet
the annual contribution and provide suggestions to the family.
Analysis Part B
8 - Prepare an analysis of the Howes risk management insurance coverage using the following
format:
Metric
Actual
Recommended
Cost/Savings
Life Insurance - His
12-16 x Gross Pay
None
Needs $1.5M 30 year term due to level of assets and income
Cost $1,080
$.72 per $1000

14. 9 Describe the estate planning documents the Howes need immediately and what are the
important provisions of each? If you recommend powers, who is the power holder?
10- Perform analysis of the Howes portfolio taking into consideration risk tolerance and asset
allocation. Assume they are aggressive investors (goal of 10% return) and revise asset allocation

15. to achieve this goal. Assume risk tolerance appropriate for their age and years to retirement
11. Based on your analysis what are the strengths and weaknesses of the Howe family financial
plan and overall financial condition. What recommendations would you make to them based on
your analysis. What additional information would you need to do a complete analysis. SWOT
type analysis
please answer it all