discussion 4

In this assignment, you will recommend a personal retirement plan for a client that you identify. Support your recommendation to the client by explaining how the plan meets the client’s needs and mitigates risk. In addition to the required page total, include the required appendices. Required appendices may be tables, pie charts, and/or other appropriate figures.


This week, you continue in the role of retirement planner you took on for the Week 7 assignment. You will identify a client, create a retirement plan that meets that client’s needs, and recommend the plan to the client.

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In a 5 page paper, complete the following:

  1. Identify a person, couple, or family for whom you are creating the plan. Describe the person, couple, or family (no name is required, but it can be you, someone else, or someone you imagine). Each of the following items is important because your recommendations must align to them:

    Include the factors that are important to know when developing a retirement plan (age, marital status, number of dependents, health, life expectancy, and other sources of income such as social security and pensions).
    Identify a desired age of retirement and retirement income (assume these were provided by the client).
    Describe the client’s personal risk tolerance (assume this information was provided by the client).  

  2. Develop a personal retirement plan that identifies required savings before retirement and planned savings and withdrawals before and after retirement. Support your explanation of this plan with the following appendices:

    Annual and monthly savings before retirement (in addition to the required page total).
    Annual and monthly withdrawals after retirement (in addition to the required page total).

  3. Recommend asset allocations that mitigate risk based on client’s profile, such as age, marital status, and personal risk tolerance, and based on the riskiness of the assets. Provide the following appendix to support the original and changing allocation of asset classes:

    Asset allocation over the life of the plan (in addition to the required page total).

  4. Use 5–6 sources to support your writing. Choose sources that are credible, relevant, and appropriate. Cite each source listed on your source page at least one time within your assignment. 




Discussion 3 Memorandum

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Importance Of Factors to Consider When Developing a Retirement Plan

When developing a retirement plan, it is important to consider various factors to make the best decisions for your future. Age, marital status, number of dependents, health, life expectancy, and other sources of income are all important things to consider (Fonville, 2022). Each of these factors can affect the amount of money you will need to save for retirement and the type of retirement account that would be best for you. For example, if you are young and healthy, you may be able to take more risks with your investments than someone older and closer to retirement.

It is also important to consider whether you want to retire sooner or later. If you plan to retire early, you will need to make sure you have enough to cover your costs for a longer period. On the other hand, if you plan to work longer, you may be able to take advantage of lower tax rates and save more money in a tax-advantaged retirement account (Fonville, 2022). No matter your circumstances, it is important to consider all of these factors when planning for retirement. By doing so, you can be sure that you are making the best decisions for your future.

The Relationship Between Risk and Return

Risk and return are directly related, and this relationship should be considered when deciding to save for retirement. The higher the potential return on an investment, the higher the risk (Ostrovsky-Berman & Litwin, 2018). For example, if you are saving for retirement and have a choice between investing in a stock that can double your money or a bond guaranteed to return your principal plus interest, you would likely choose the stock because of the higher potential return. However, there is also a greater chance that the stock could lose value, while the bond will likely not lose any value.

When making decisions about saving for retirement, you need to weigh the potential risks and rewards of each investment. If you are willing to take on more risk, you could earn a higher return. However, there is also the chance that you could lose money. It is important to understand your tolerance for risk and make sure that your investment choices reflect that (Ostrovsky-Berman & Litwin, 2018). Generally, the closer you are to retirement, the less risk you should take with your investments. This is because you will need to start withdrawing money from your account soon, and you don’t want to see the value of your account go down just before you retire. However, everyone’s situation is different, and you should talk to a financial advisor to get personalized advice on how much risk you should take with your retirement savings.

How Risk Factors Impact the Allocation of Assets

Your age and the amount of risk you are willing to take play a significant role in the assets that are allocated in your retirement plan. As the time draws nearer for you to take up retirement, you should normally shift a greater portion of your wealth into investments with lower levels of risk, such as bonds and cash. This is due to the fact that you will soon need to begin taking money out of your account, and you do not want the value of your account to decrease right before you retire (Stobierski, 2019). However, because each person’s circumstances are unique, you should discuss the matter with a financial counselor in order to receive individualized guidance on how to distribute your assets. It is possible that, given your circumstances, you are in a better position than another person to make investments that involve a higher level of risk.

For instance, if you are younger, healthier, and closer to retirement, you might be able to take more risks with your investments than an older person who is further away from their golden years. This is due to the fact that you have a longer period of time to recuperate from losses and a lower probability of needing the money straight immediately (Stobierski, 2019). On the other hand, if you are responsible for the maintenance of a family, you should probably put a larger portion of your wealth into investments that carry a lower level of risk. In the event that the market takes a turn for the worst, you will need to be able to access the funds in order to continue providing for your family.

How Fiscal and Monetary Policies May Impact Retirement Plans

Both fiscal and monetary policies can significantly influence retirement plans. Alterations in fiscal policy, such as alterations in tax rates, can potentially affect the amount of money that is available to be saved for retirement. Alterations in the Federal Reserve’s monetary policy, such as shifts in interest rates, can also affect the growth of your savings for retirement (Mackenzie & Gerson, 2001). The variables of interest rates, tax rates, and regulations that affect savings can all substantially influence retirement plans. For instance, if interest rates go up, it may become more expensive to take out a loan for a home or a car because of the increased cost of borrowing money.

Saving money for retirement could also become more challenging due to this factor. Similarly, an increase in the tax rates in place could result in a reduction in the amount of money that is available to be saved for retirement. Additionally, if there is a change in the policies governing savings, this may affect the amount of money you can deposit into a retirement account (Mackenzie & Gerson, 2001). It is important to be aware of how these changes might affect your retirement plan and to make sure that you consider them when making decisions about retirement savings. It is also vital to ensure that you know how these changes can impact your retirement plan. If you do this, you can rest assured that the choices you make regarding your future will serve you in the best possible way.

The Implications of The Time Value of Money concerning Saving for Retirement

When planning for retirement, one of the most crucial concepts to keep in mind is the time value of money. According to this theory, money available now has a higher value than money available in the future since current money can be invested and earns interest (Lusk, 2022). For illustration’s sake, let us imagine you wish to invest $100 for your retirement and have $100 available. If you invest this money right now and it earns interest at the rate of 5 percent, you will have an additional 105 dollars at the end of the year. But if you hold off investing the money for a whole year, you will only wind up with $95 at the end of the year.

This may not appear to be a significant difference at first, but it has the potential to become rather significant over time. If you start investing $100 per year when you are 25 years old, you will have $38,000 after ten years if you do so. However, if you do not begin investing until you are 35, you will only have $26,000 after ten years (Lusk, 2022). As can be seen, one of the most significant considerations to make while putting money away for retirement is the time worth of money. You may take advantage of compound interest and accelerate the growth of your nest egg for retirement if you start saving early and continue to do so regularly.


Fonville, M. (2022, May 11). Nine reasons why retirement planning is important. Covenant Wealth. Retrieved August 2, 2022, from https://www.covenantwealthadvisors.com/post/9-reasons-why-retirement-planning-is-important

Lusk, V. (2022, July 11). Time value of money: The guiding principle for every financial and investing decision. Business Insider. Retrieved August 2, 2022, from https://www.businessinsider.com/personal-finance/time-value-of-money?r=US&IR=T

Mackenzie, G. A., & Gerson, P. R. (2001). Pension reform and the fiscal policy stance. IMF. Retrieved August 2, 2022, from https://www.imf.org/en/Publications/WP/Issues/2016/12/30/Pension-Reform-and-the-Fiscal-Policy-Stance-15536

Ostrovsky-Berman, E., & Litwin, H. (2018). Social network and financial risk tolerance among investors nearing and during retirement. Journal of Family and Economic Issues, 40(2), 237–249. https://doi.org/10.1007/s10834-018-9592-5

Stobierski, T. (2019, July 31). How the risk-return relationship impacts investment gains. Acorns. Retrieved August 2, 2022, from https://www.acorns.com/money-basics/investing/risk-return-relationship/

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