Posts by Dan Madden, CFP®

John, a 45-year-old professional, recently inherited $100,000. He has no immediate need for the funds and wants to invest the money to help secure his retirement, which he plans for at age 65. John has moderate risk tolerance and currently contributes the maximum allowable amount to his 401(k) each year. He wants a diversified investment…

A financial planner is working with a client, Lisa, who is 35 years old, earns $100,000 annually, and has expressed an interest in maximizing her retirement savings. Lisa’s employer offers a 401(k) plan with a 100% match up to 5% of her salary. She also has a Roth IRA and an emergency fund covering six…

Lisa, age 50, is considering withdrawing funds from her traditional IRA to pay for her daughter’s college tuition. She is concerned about the tax implications and potential penalties. Which of the following is the best advice to give Lisa? She can withdraw the funds penalty-free because the withdrawal is for higher education expenses, but she…

Mary, age 52, has $300,000 in her 401(k) and plans to retire at age 67. She currently contributes $15,000 per year to her 401(k), and her employer matches 50% up to 6% of her salary. Mary’s salary is $100,000, and she expects to earn a 7% annual return on her investments. She wants to ensure…

John and Sarah are married, both 40 years old, and file jointly. They have two children, ages 8 and 12, and are in the 24% federal tax bracket. They want to save for their children’s college education and have asked you for advice. They estimate each child will need $40,000 per year for four years,…

Lisa is a CFP® professional meeting a new client, Mark, for the first time. During their initial meeting, Lisa asks Mark about his financial goals, gathers his personal and financial information, and identifies his risk tolerance. Which step in the CFP Board’s 7-step financial planning process is Lisa primarily engaging in during this initial meeting?…

A client has provided the following information for income tax purposes: $55,000 salary from an S corporation where the client serves as vice-president $4,500 loss from the S corporation $2,000 loss from a 4% interest in a limited partnership $1,300 loss from a 15% interest in Bayside Partnership in which the client does not materially…

A client, Sarah, is a 35-year-old single mother with two young children. She has a stable job with an annual salary of $80,000 and has accumulated $50,000 in a 401(k) plan. She also has $10,000 in an emergency savings account. Sarah expresses concern about saving for her children’s college education while ensuring she has enough…