Angela's Plan Fits Her Goals

Angela works in the human resources department of an automotive supplier. She’s 29 years old, single, has an income of $40,000 a year, no debt, and has saved $31,000.

Angela has two investment goals: 1) to fund her retirement which she would like to occur in approximately 21 years, and: 2) to create an emergency fund in case of sudden job loss. She has decided to put aside $50 per month for her Emergency Fund Goal and $200 per month toward her Retirement Goal.

After telling CitrinGroup about her goals, Angela opened two accounts: a Money Market fund for emergencies and an Individual Retirement Account (IRA) to invest toward her retirement.

Goal: Emergency Fund – Angela transferred $10,000 from her savings account and invests $50 a month into a Money Market fund in her Emergency Fund account. Because this is for emergencies, the CitrinGroup determined that this should be a very stable account that would enable Angela to access funds quickly and easily, if necessary, while offering a higher return on investment than a traditional savings account.

Goal: Retirement – CitrinGroup created an Individual Retirement Account (IRA) in which Angela rolled over her 401(k) of $20,000 and currently invests $200 a month. Given her situation, CitrinGroup calculated that Angela can reach her goal of retiring in 21 years if she earns an average annual rate on her retirement assets of 7.0%. Thus, Angela’s account has been automatically invested in the optimal portfolio to achieve her required rate.

Note: The information contained above is an example only and not intended as actual investment advice.