After calculating a comprehensive income-need analysis for Martha and Matt, you realize they need to start saving $100,000 per year to retire like Madonna will. What for projected cash-flow shortfall compensation strategy would you not suggest?

Question

Quizplus · Accepted Answer

When considering a compensation strategy for projected cash-flow shortfalls one would not suggest level annual payments instead of serial annual payment. In fact, it would be best to consider serial (increasing) annual payments versus level annual payments. Additional alternatives include; consider making maximum contribution to qualified retirement plans, decrease current and future expenditures, participate in more aggressive investments, advance the retirement age or lower the desired amount of income, and to accept higher risk levels for investments.

After Calculating a Comprehensive Income-Need Analysis for Martha and Matt