Balance Sheet

Jen and Luke sample are married. Jen (age 59) works as a college professor and makes $120,000 a year. She also has a lucrative consulting business that brings in roughly $88,000 a year and is worth $363,055. Luke (age 61) works as a software engineer and makes $125,000 a year. Currently, they have two kids, Jimmy (age 21) and Jessica (age 18). Jimmy is in his Junior year of college, which costs about $25,000 a year with his scholarships, paid for by Jen and Luke. Jessica just started her freshman year. Due to a difference in her scholarships, Luke and Jen pay about $50,000 a year for her education. In October of this year, Luke and Jen will have completed the process of adopting a new baby. They also have a poodle named Darwin who costs about $700 a year to feed and entertain.

Luke and Jen own two houses. Their primary residence is valued around $777,975. They just refinanced for $200,000 mortgage at a 5% interest rate to be paid off over the next 30 years. They also have a vacation home in Maine, which is fully paid off and is worth about $363,055. Each year they spend around $4,800 to maintain their two homes. They also spend around $12,000 in property taxes. They spend around $6,000 extra a year to travel to and from their vacation home in Maine. With all of that driving they have an annual transportation expense of around $7,200. The cost of upkeep for both houses is around $2,500 a year between lawn maintenance and their high-tech security system. While relaxing in both homes they enjoy watching their premium cable package which costs about $3,600 a year, but also includes phone. All other utilities cost $8,200 for them. When they?re not at their vacation home, they enjoy going to the local country club which costs them $9,000 a year in club dues.

They have provided you with their multiple investment and retirement account statements, which has information about their asset holdings. Also, take note that Jen informed you during your meeting that the annuity accounts are in her name and not Luke?s. Each year they continue to max out Luke?s 401(k) account which has a 3% match. Each month they also save $1,000, which they put into their cash accounts. They have a life insurance policy with a cash value of $46,679. They also pay $4,000 a year in insurance premiums which they have through Luke?s work. In addition to their premiums, they pay $1,200 out of pocket, and an additional $15,000 for other medical/health insurance. Luke and Jen have several credit cards. Their Visa has an outstanding balance of $7,000 at a 7% interest rate, and they choose to pay $93 towards that balance each month. Their Discover has a balance of $19,000 at a 5% interest rate for which they pay $235 a month. Lastly, they have an AMEX card with a balance of $11,000 at a 23% interest rate, they pay $249 a month.

Below are their remaining annual expenses: