Investment Planning Proposal

Investment Planning Proposal

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Financial advice: we can all use at least some, right? In this assignment you give that advice in a scenario we have drafted. Based on what you have learned in this course, what is the financial planning advice you would give? Answer this by completing the assignment.

Review your Week 5 Learning Activities.

Complete the Investment Planning Proposal.

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Expert Answer

Investment Planning Proposal


Savings and investments are common concepts in the modern world and this is because it is only through saving and investing that a person, regions, economy or a country can be able to secure a better future.  Many people have been successful through investments. Although, this does not mean that all investments bring about good results. One can only attain a good return by making sure that he or she is investing wisely. An individual must do what it takes to secure his her future. One of the most important steps that a person should take is coming up with a plan regarding how money or resources will be invested (Feldstein and Ranguelova, 2001). Anyone who plans for the future is likely to have additional benefits that include learning how to effectively allocate the available resources. Proper financial planning offers peace of mind since it allows an individual or an organization to consider the existing circumstances, personal objectives and potential risks. While planning, one must examine different factors. For instance, financial goals to be achieved as well as the time to reach them, environmental factors, the ultimate rewards of the investments among others. There are various types of investments but in this case, the author will focus on planning for retirement.


Many people earn their income through employment. This is not only evident in the United States but across the world. An individual cannot work for the rest of his or her life. As a person grows older, the body continuously becomes worn out and it reaches a point when he or she cannot work well or maybe could become sick in case he or she works for long hours. This is what calls for retirement planning.  Recent research reveals that there is an increased need for the provision of long-term care for aged people in the united states due to the increasing number of individual aged 65 years and above. Majority of them are expecting to age while at their homes. Such people are likely to have health complication which is not covered thus creating the need for home care and health services. Some of these services are not Medicaid and Medicare. In a nutshell is important for employees or business people to save some money that will cover their need once they retire.  Saving for retirement allows aged people to be self- reliant rather than depending on the welfare system that is developed by the government in liaison with health care providers and caregivers (Meulbroek, 2005). Apart from being self-reliant, a retirement plan helps old people to live without their children.  Thus, with financial stability, the old people can live and provide for themselves just in case their children are facing financial constraints. There are various consequences associated with the lack of enough savings for retirement. They include burdening family members or the government which may not effectively cater to all the needs, living an uncomfortable life coupled with stress, lack of enough food and other necessities. To avoid such consequences, one can develop a simple retirement plan.

An employee can begin to invest in a retirement fund. Anyone who wishes to have a good retirement plan should take various steps. The first step entails envisioning the plan and determining the goals to be achieved. The second step is the evaluation of the current states including financial status and determining the period that the investment will cover. The third step involves calculating the financial needs following with a review of the sources of income. After completing the fourth step, then one can go ahead and invest by contributing a specific amount to a retirement scheme.

Kathy is a good example of an employee who needs to consider the arguments above. Kathy has already examined his financial status. After determining what she earns and her debts, she discovers that she can save ranges between $200 -$325 in a month. Her employer provides a 401k with a three per cent match, something which gives her a good opportunity to have an invested retirement plan (Huberman and Jiang, 2006). What Kathy can do is to determine the amount of money she ought to contribute or save on a monthly basis as her retirement fund based on what the company can offer. Her annual salary is $70,000 and this means that in a month, she earns approximately ($70,000/12) which is equal to $5833.33. If Kathy considers enrolling herself in a retirement plan then she can contribute ($5833.33*0.03) which is equal to $175 per month. According to the financial review, Kathy is able to save a minimum of $200 and a maximum of $325 a month. $175 is less than $200 and hence Kathy can enrol in a plan.

Kathy can proceed and enrol in a retirement plan. She can contribute $175 a month while the employer contributes the same amount every month.  At the end of every month, Kathy will be saving $350. This is a good idea but then she is able to save more than $175. What else can Kathy Consider to maximize his savings or investment? She can decide to contribute say $250 a month, but the company will only contribute $175. To minimize risks associated with the investments, Kathy can consider diversifying her portfolio. Diversification reduces the risk associated with investments (Feldstein and Ranguelova, 2001). In my opinion, she can invest in mutual funds, stock or bonds. She can invest $50 dollars in stocks and $75 in bonds to maximize her future earnings.


In conclusion, it is important to recognize the fact that one day one cannot have the energy to work. This is what explains the need for investing and saving some cash that will cover future expenses. A retirement plan is a good investment plan to think about. Individuals can examine their financial status, determine what they can save and chose viable investment opportunities.




Feldstein, M., & Ranguelova, E. (2001). The individual risk in an investment-based social security            system. American Economic Review, 91(4), 1116-1125.

Huberman, G., & Jiang, W. (2006). Offering versus choice in 401 (k) plans: Equity exposure and the number of funds. The Journal of Finance, 61(2), 763-801.

Meulbroek, L. (2005). Company stock in pension plans: How costly is it?. The Journal of Law and Economics48(2), 443-474.






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