Financial Plan for Sheldon and Amy Cooper

Accounting, Assignment Questions

Financial Plan

for

Sheldon and Amy Cooper

Presented by

Your full name

Your work title (you can make up one)

Your work address (you can use USF address or make up one)

Your work phone number (you can make up one)

Your email address (use your usf email)

January 1, 2020

Table of Contents

Executive Summary	x
Disclaimer	x
Letter of Engagement	x
Contact Information	x
Family Information	x
Employment Information	x
Personal Statement of Cash Flows	x
Personal Statement of Financial Position	x
Explanation of Financial Planning Process	x
Assumptions	x
Goals	x
Recommendations	x
I. Saving for Education Planning	x
II. Long-term Care Insurance	x
III. FSA and Tax Saving	x
IV. Retirement Plans Performance	x
V. Financial Statements and Net Wealth	x
VI. CFP Board’s Standards of Professional Conduct	x
Additional Observations	x

Executive Summary

Briefly comment on the financial position of the Coopers based on your analysis of their financial statements. List their strengths and weaknesses.

Disclaimer

This plan provides a general overview of some aspects of your personal financial position. It is designed to provide educational and/or general information and is not intended to provide specific legal, accounting, tax, or other professional advice. For specific advice on these aspects of your overall financial plan, you should consult with your professional advisors. Asset or portfolio earnings and/or returns shown or used in the plan are neither intended to predict nor guarantee the actual results of any investment products or particular investment style.

IMPORTANT: The projections or other information generated in this report regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Additionally, please note that information in this report is based upon financial information input on the date above; results provided may vary over time and with subsequent uses.

Letter of Engagement

Dear Mr. and Mrs. Cooper,

This engagement letter is intended to outline the specific terms of the financial planning engagement between Your name and Sheldon and Amy Cooper. Please be assured that all information that you provide to me will be kept strictly confidential. During the financial planning engagement it may, on occasion, be necessary to consult with other third-party professionals at which time I would obtain your written permission to disclose your personal information.

As discussed at our initial meeting, this engagement will include all services required to develop a comprehensive financial plan. These services will specifically include, but are not limited to:

reviewing and prioritizing the goals and objectives of your current financial situation, including a statement of financial position, statement of cash flows, budget, and income tax analysis;
developing a financial management strategy, including financial projections and analysis;
assessing exposure to financial risk and developing a risk management plan;
completing a retirement planning assessment, including financial projections of assets required at the estimated retirement date;
assessing estate net worth and liquidity and developing an estate plan to ensure estate planning objectives are met;
identifying tax-planning strategies to optimize financial position;
integrating and prioritizing all strategies outlined above into a comprehensive financial plan;
presenting a written financial plan that will be reviewed in detail with you;
developing an action plan to implement the agreed upon recommendations;
referring to other professionals, as required, to assist with implementation of the action plan;
managing the implementation of the financial plan;
monitoring financial performance in relation to the financial plan;
reviewing and assessing assumptions incorporated into the financial plan given ongoing changes in the economic, political, and regulatory environment;
determining necessity to revise financial plan;
reviewing current investment portfolio and developing an asset management strategy; and
designing recommendations to meet your stated goals and objectives, supported by relevant financial summaries.

This will be an ongoing professional relationship. At a minimum, we will meet on an annual basis to ensure the plan is still appropriate for you. If you should wish to terminate this engagement at any time, you must notify me in writing. Any fees incurred to that date will be accrued and payable in full.

My engagement fee is $x,xxx plus applicable taxes for the initial financial plan and one year of monitoring. Payment terms include $xxx payable upon acceptance of this engagement, with the balance due upon presentation of the comprehensive financial plan. Subsequent to the first year, our meetings will be subject to a fee of $xxx per hour. Please be advised that I do not receive a referral fee from any other professional(s) to whom you may be referred.

In order to ensure that the comprehensive financial plan contains sound and appropriate financial planning recommendations, it is your responsibility to provide complete and accurate information regarding all aspects of your personal and financial situation, including objectives, needs and values, investment statements, tax returns, copies of wills, powers of attorney, insurance policies, employment benefits, retirement benefits, and relevant legal agreements. This list is not all inclusive and any other relevant information should be disclosed in a timely manner.

1

Form ADV Part 2A is available for review and will be provided to you at the time a formal fee-based or discretionary account is established.

You are responsible for ensuring that any material changes to the above noted circumstances are disclosed to your financial planner on a timely basis because they could impact the financial planning recommendations. If the scope or terms of the financial planning engagement are subject to change, they should be documented in writing and mutually agreed upon by all parties of the engagement.

I wish to advise you that I have no known conflicts of interest in the acceptance of this engagement. I commit that I will advise you of any conflicts of interest, in writing, as they should arise.

I have read, understood, and accept the terms outlined in this engagement letter.

Sheldon Cooper 12/31/2019

Client – Sheldon Cooper Date

Amy Cooper 12/31/2019

Client – Amy Cooper Date

Your name 12/31/2019

Financial Planner Date

Contact Information

Planner Contact Name
Title
Address
City, State, Zip
Office
Fax
Email
Website

Client Name(s)	Sheldon and Amy Cooper
Address	123 Thorn Lane
City, State, Zip	Anytown, FL 34567
Cell #1	(727) 123-456
Cell #2	(727) 456-789
Email	[email protected]

Family Information

DOB(s)

Sheldon 1/1/1982, Amy 1/1/1982

Marital Status

Married

Children & Ages

Bradley, age 10

Brea, age 5

Blaire, age 2

Employment Information

	Sheldon Cooper	Amy Cooper
Occupation	Owner, Manager	Educator
Employer	Big Joey’s Bar and Grill	Anytown Private Elementary School
Annual Income	$76,000	$57,200

Personal Statement of Cash Flows

STATEMENT OF CASH FLOWS Sheldon and Amy Cooper For the year ending December 31, 2019 (and projected for 2020)
INFLOWS
Sheldon’s net income Big J’s (Schedule C) Amy’s salary Dividend income Checking interest Income Savings Interest income Certificate of deposit Rental property income (Schedule E) Total inflows	$76,000
	57,200
	777
	130
	400
	275
	$22,000
	$156,782
OUTFLOWS
Planned savings Amy’s Section 403(b) plan Sheldon’s IRA Total planned savings	$ 2,860
	3,000
	$ 5,860
Ordinary living expenses Mortgage (principal and interest) Homeowners insurance premium Church donations—cash Auto lease Auto loan principal and interest Gas/oil/maintenance Auto insurance payments (both cars) Credit card payments Federal income tax and FICA Property taxes on residence Utilities Telephone Life insurance premiums (Sheldon) Accidental death and dismemberment Parental support Health insurance Dental insurance Child care paid to day care provider Private school tuition Disability income insurance premiums (both) Vacation expense Entertainment expense Food Clothing Rental property expenses (Schedule E) Total ordinary living expenses Total outflows	$10,267
	1,239
	6,000
	4,000
	7,800
	2,400
	2,180
	6,200
	19,931
	2,657
	2,400
	1,600
	2,361
	68
	9,600
	4,592
	416
	4,500
	12,000
	1,600
	6,000
	3,250
	6,250
	5,000 $22,000
	$144,311
	$150,171
Net cash flow surplus	$6,611

Statement of Financial Position

STATEMENT OF FINANCIAL POSITION

Sheldon and Amy Cooper

January 1, 2020

Assets
Cash/cash equivalents
Checking account	JT	$5,200
Savings account	JT	12,300
Total cash/cash equivalents		$17,500
Invested assets Certificate of deposit Savings bonds Mutual funds Individual stocks Amy’s inherited IRA Amy’s Section 403(b) Sheldon’s IRA Big J’s Rental property Life insurance cash value Total invested assets	JT	$5,000
	JT	4,000
	JT	18,800
	JT	13,600
	Amy	100,000
	Amy	31,331
	Sheldon	27,942
	JT	138,000
	Amy	84,000
	Sheldon	21,250
		$443,923
Personal use assets
Primary residence1 (including land)	JT	125,000
Jewelry	Amy	8,000
Jeep Grand Cherokee	JT	24,000
Baseball card collection	Sheldon	2,400
Total personal use assets		$159,400
Total assets		$620,823
Liabilities
Credit cards		$ 8,200
Auto loan		11,000
Home mortgage		98,836
Total liabilities		$118,036
Net worth		$502,787
Total liabilities and net worth		$620,823

1Replacement value of house is $115,000.

Ownership: JT – JTWROS property; otherwise, owned by individual listed.

Explanation of the Financial Planning Process

Define our relationship. In this step, we fully explain the services to be provided, how we are compensated, and any sources of compensation. We also discuss each of our expectations regarding the roles we will have during the personal financial planning process. The way decisions will be made is clarified, and we discuss the duration of our relationship.

Gather information; set goals and expectations. Here, we gather your financial information and other data needed to create a personal financial plan. We also assist you in identifying and prioritizing your goals.

Analyze your current financial status. Next, we identify your financial strengths and weaknesses to prepare to make recommendations.

Develop and communicate recommendations. Once we determine your financial status, a financial plan is developed. The plan is customized with recommendations based on your needs, goals, and objectives. We will meet with you to discuss my recommendations and the various options you may have to meet these needs, goals, and objectives.

Implement the recommendations. A financial plan is only helpful if action is taken on the recommendations. Here, we assist you in either implementing the recommendations or in coordinating their implementation with the other knowledgeable professionals.

Monitor the recommendations. Over time, your financial and family circumstances may change. Current economic conditions may change as well. Therefore, we provide periodic reviews of your financial plan at agreed upon intervals to ensure that you are in the process of meeting your financial goals.

Assumptions

List all assumptions you have used for your recommendations such as interest rate, inflation, rate of return, etc.

Goals

Briefly list the goals you would like to accomplish for your clients in this recommendation.

Recommendations

I. Saving for Education Planning