Typical Acquiring Scenario
Claire is in her early 40s, divorced, with three young children. She’s moving up in her career and makes a good salary. Her main financial goal is to buy a house, but she’s also concerned about funding her children’s education and her retirement. Although Claire has ample savings as well as benefits, and participates in her company’s retirement plan, she hasn’t fully investigated the details of all the plans. She has plenty of questions:
- How should I save for retirement? Is it better to fund 401(k), an IRA, or both?
- What’s the best way to save for my children’s college expenses, and how much should I plan to set aside? What about paying for private elementary or high school?
- What’s the best way to pay off my student loan and other debts?
- How much cash should I hold in reserve?
- Do I need a will?
- What about life insurance for me and for my children’s father?
First, we would educate Claire on basic financial life skills such as how many accounts she should have, what types of accounts she needs, and how they should be arranged to make her money work its hardest for her. We would also help Claire implement strategies to fund an IRA and 401(k) for retirement; pay off her debts; set up cash reserves; fund a 529 college savings plan; determine the most appropriate method to fund college expenses; and obtain life insurance for herself as well as advise on insurance for the children’s father.