Complete a 1 page cash projection for a case study, as part of an overall financial plan case study..
CFP _Letterhead Prepare a rough draft Cash Flow Projection for Cory & Kassidy Coleman’s financial plan. Your cash flow projection will be graded for neatness and accuracy. Assignment Tips: · The cash flow summary should be a maximum of one page. · See the “Income and Expense Summary” section for details. · Use your net worth and tax projection data from the prior weeks to complete the liability payments and tax portion of the cash flow statement. · The Coleman’s want to include any business income and expenses in the normal household cash flow statement. · This implies using Kassidy’s gross income in the “income section” and having a business expense line item in the “expenses section.” · Alternatively, you can list Kassidy’s net income in the “income section” and have a mini cash flow section separate from the main household cash flow sheet showing her Schedule C breakdown (i.e., use her business profit and loss table). · Employer savings for Cory’s 401(k) should be excluded from the cash flow worksheet. · Interest and dividends have an impact on the tax projection, but they are being reinvested and not spent; thus, they have no impact on cash flow and should not be included in the cash flow projection. PFPL600—Case Studies in Personal Financial Planning, Week 5 Assignment ©2021, College for Financial Planning, all rights reserved. 2 Case Study PFPL600 Case Studies in Personal Financial Planning Case Study: The Coleman Family Case Study © 2002–2021, College for Financial Planning, all rights reserved . © 2021, College for Financial Planning, all rights reserved. This publication may not be duplicated in any way without the express written consent of the publisher. The information contained herein is for the personal use of the reader and may not be incorporated in any commercial programs, other books, databases, or any kind of software or any kind of electronic media including, but not limited to, any type of digital storage mechanism without written consent of the publisher or authors. Making copies of this material or any portion for any purpose other than your own is a violation of United States copyright laws. 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Table of Contents Case Study: The Cory and Kassidy Coleman Family ............ 1 Overview ........................................................................... 1 Client Objectives ............................................................... 2 Financial Planning Assumptions ......................................... 5 Income and Expense Summary ......................................... 10 Assets & Liabilities Summary .......................................... 12 Kassidy’s Schedule C Income (Sole-Proprietorship) ......... 14 Financial Documents ....................................................... 15 Case Study © 2002–2021, College for Financial Planning, all rights reserved . Case Study 1 © 2000–2021, College for Financial Planning, all rights reserved . Case Study: The Cory and Kassidy Coleman Family our new clients, Cory and Kassidy Coleman, who are a referral from a long-standing client, have come to you for help in developing a comprehensive and coordinated financial plan. They have never worked with a financial planner before and are very apprehensive about this experience. However, now that the New Year has begun, they would like to get a head start and recognize that they need help; especially considering retirement is fast approaching. After a series of introductory phone calls, emails, and meetings, the Coleman’s are ready to move forward, and you have now been hired to create for them a comprehensive financial plan. The formal presentation meeting is two weeks from today and they just delivered their financial data to your office so you can begin working on their plan. Overview Cory (age 55) is a senior account executive for Pilsen Inc.–a major information technology corporation. He has worked for the company for over ten years and enjoys his career, but he is starting to think about retirement years. In particular, he wants his wife and children to be taken care of in case he passes away unexpectedly and to start enjoying his life and money a little more as he nears retirement. Kassidy (age 53) has predominately been a homemaker for the majority of her children’s lives. However, prior to marriage and children, Kassidy earned a degree in fashion design and worked in the industry. Now that the children are older and more self-sufficient, Kassidy has decided to again explore her passion of art and fashion and has started her own business. She is now in her third year of business and works predominately from their home office as a sole proprietor, but she is interested in hiring a part-time employee and expanding her business. Together, Cory and Kassidy have been married for 28 years and have three children. Peter (age 25) is their oldest and lives out-of-state. He is unmarried, has no children, and is financially independent. Although he is responsible for repaying his undergraduate loans (Cory and Kassidy repaid their portion), he is considering pursuing graduate school. He has hinted to his parents about Y 2 Case Study © 2000–2021, College for Financial Planning, all rights reserved . financial assistance, but nothing formal has occurred. Cory and Kassidy are reluctant to help, but would like your feedback about financial or non-financial possibilities. Their second child, Cynthia (age 22), recently graduated college and just started her first full-time job. She lives nearby her parents and has two roommates. Similar to Peter, Cynthia is unmarried, has no children, and is financially responsible for herself now that she is graduated and working. Cory and Kassidy have paid off their portion of Cynthia’s student loans, but Cynthia has just started repayments and is overwhelmed at all the new responsibilities of adulthood. The Coleman’s have hinted to you that they would like to provide their daughter with some “high-level” advice as she begins adulthood. Ashton (age 18) is their youngest, lives at home, and is the Coleman’s dependent. He is a very talented soccer athlete and is actively being recruited by college scouts at out-of-state public schools. His athletic scholarship will cover approximately 25% of his total undergraduate costs and the Coleman’s are willing to provide another 25% from their personal funds, if possible. The remainder will be Ashton’s responsibility, but that amount could decrease if you (the planner) discovers that they cannot afford to help that much. Cory’s father, Gerald, passed away several years ago. However, his mother, Susan (age 85), is still alive and lives with the Coleman’s as their dependent. She has no assets of her own and her sole source of income is Social Security (not subject to tax). Kassidy’s parents are both deceased, but her mother only recently passed. As part of her passing, Kassidy inherited her IRA. Client Objectives General The Coleman’s have never taken the time to accurately assess their net worth and cash flow situation. They have noted that sometimes their budget either feels tight or loose and that they have difficulty remembering all of their assets. However, they have provided you with enough information to create both statements and want to know of any strengths, weaknesses, or areas for improvement. Case Study 3 © 2000–2021, College for Financial Planning, all rights reserved . Insurance They want to know if they are adequately protected should anything happen. Do they have the best forms of insurance, or are there better policies with competitive pricing available? How do these insurances change over time? They are interested in life, health, disability, long-term care, and property and casualty. They would like to take advantage of their open enrollment period while it is still available. Kassidy also noted that she does not have any professional insurance for her new business and would like to know her options. Investments Both would like more education on investing and how