Question

Personal Financial Plan for “Jack and Jill”

• Jack and Jill are married and a middle-aged couple.
• In order to achieve their goals, they hope to retire and must, therefore, ensure they have enough savings to cater for their needs in their golden days.
• As a married couple, they have made several investments and are not sure whether their insurance coverage is adequate.
• They are not sure whether they have enough financial resources to last them for the rest of their lives.

Personal Financial Plan Assumptions

1. Retirement:

• Jill would like to retire at age 65; and
• Jack would prefer to retire when he is 67.

2. Asset evaluation

• Cash & Cash equivalents (bank accounts/CDs/Money Market) – RM100,000
• Brokerage account (stocks/bonds) – RM315,000 current value
• Retirement Annuity (RM250,000 current value)
• Jill’s EPF - RM400,000
• Jack’s EPF account (RM520,000)
• Home is worth RM388,000 with a RM120,000 mortgage at a 4.5% interest rate
• Jack’s car is 3 years old and worth RM27,000. The loan balance is RM9,500.

3. Insurance Coverage

• Jack’s life insurance coverage is through work (RM305,000) at RM100/month.
• Jill’s life insurance coverage is a whole life policy (RM95,000 death benefit, RM25,000 cash value) at RM85/month.
• Jack has taken a disability policy to compensate him if he becomes disabled through work which replaces 60% of his income and Jane has no disability insurance.

3. Other Situation Details

• Jill is currently self-employed.
• Jack grosses approx. RM140,000 per year; Jill makes approx. RM50,000.
• They spend approximately RM6,000 a month on basic living expenses like utilities, entertainment, basic needs like food, property tax, and other expenses.
• The overall fixed income to equity ratio is about 40% fixed income and 60% equities (40/60) of all investable assets.
• The couple has not drafted a will.

Q: What is Estate Plan Review?

Answer 1