John Speedwell and Carroll Speedwell want to purchase their first home. This will have an impact on their financial planning and retirement plans. When faced with such an issue, it’s important to determine the sources of cash available and what the impact of eliminating these programs will be. John and his wife want to make sure that they have the best financial decision possible while still being in a position to afford a home. This paper provides a roadmap to help people make the right financial decisions about how they save for down payments and their retirement savings. There are many options for John’s savings and contributions. The first is a $17,000 money purchase pension without continuing contributions. But, because the individual is still in his late 20s, and isn’t nearing retirement, you should omit this fund from your current plans. It is only meant to be used for their productive years. John on the other side has a standard IRA plan that he had with a previous company. It includes a $5,000 targeted benefit plan, which was available through his agreement with his old employer. According to the IRA savings model, the funds are accessible (Baker, Logue, & Rader, 2004), so offering the first choice for withdrawing funds for the down payment. The third factor is that his continuing savings contribution of $2,000 is not feasible. His current job’s 401k plan is also realistic, with a 5% employer match and a 5% employee discount. The $17,000 available to him is due to the fact that he has been investing for a new retirement plan through his employment. John needs to ensure that John utilizes his pension plan equivalent at work. It would make sense to put the equivalent amount of his current employer’s 401k plan in an available program for buying a pension. This protects the individual from exhausting their first pension. (Merton (2014) John should therefore contribute a maximum amount of $15,000 towards the purchase of property to ensure financial stability. Caroll’s retirement plan and contributions offer several options. First, there is the Roth (IRA). This was set up six years ago. It has a total value of $4,000 and does not require recurring payments. The home payment plan can also use this option. Second, since her employment ended, $18,000 from Caroll’s previous employer’s SEP with no regular contributions is available. Caroll has no option because her $9,000 403(b) plan with her employer, where she pays 6% each, is still in effect. Caroll should use her Roth IRA six years old.
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