What information would you need from Sarah in order to give her sound advice?
You’re at a family party when your cousin, Sarah, approaches you admitting she knows “nothing about money.” She is starting a new job at UConn and has a choice between a 401k and a pension. She really wants to make the smart choice and asks for your advice. In order to vest in the pension plan, Sarah must work at her job for 10 years and contribute 2% of her salary to the pension fund.
• What information would you need from Sarah in order to give her sound advice?
• Sarah doesn’t know what any of this stuff means-please write a memo to her as if she is a client of a financial planner .
Outline the pros and cons of each type of investment and what she should consider before making a decision. Remember this is someone who does not have an MBA. You need to walk her through the correct thought process and use easy numerical examples. When using technical terminology, explain what it means and provide relevant analogies. Please include graphics to show how amounts accumulate over time.