3.

How would you recommend the Lis prepare for their retirement and what actions

should they take to prepare?

The recommendation the Lis prepare for their retirement

Tom and Deena Li must to make a saving for their retirement. The savings that they

will make can give reward for them in future. They can started in a small amount and try to

improve the amount by each month. When they start to save early from today, they can get

more money. Tom and Deena Li must take the retirement savings are their priority. They also

can set up an account to take a certain percentage of each pay check. Tom and Deena Li must

to review the budget to see their saving. For example they can save 10 to 20 percent from the

balance of their monthly income deduct the living expenses and paying off debt. For the

future, they can manage their own savings like a professional. They must to be proactive in

saving and get the tips to make more saving the Internet, books, magazines and others.

After that, Tom and Deena Li must to know their retirement needs. The estimation

will require 70 to 90 percent of their earnings income to maintain the current standard of

living. There are the steps that can determine enough income and savings to cover their

retirement expenses. The annual contribution to retirement savings must to multiply that by

the number of years left until retirement. Then, add the current retirement savings to that

number, divide by the number of years to retire and add the other guaranteed sources of

income. After that, can compared the answers to the current annual expenses to know it is

enough to cover the living expenses

Then, the other recommendation is Tom and Deena Li must to contribute to the

retirement savings plan. When the employer offers a retirement savings plan for example a

401 (k) plan, they must to enrolled and contributed it. It can make your taxes will be lower

and automatic cuts make easily. The benefits of compounding and deferral of taxes can create
a big difference in the amount. They must to learn about their own plans such as the

contribution to get a full employer donations and stay plans to earn that money. The other

plans that the employer can make is on easy workers' pensions under Public Service Revenue

Services 590 by calling 1-800-829-3676 on the IRS website.

Tom and Deena Li must learn about pension plan. When the employer has a pension

plan, they must to understand the steps of the pension plan. They can see the individual

statement to know the benefits. They must know the benefit of their pensions. They can put

up to $ 5,000 a year into the Individual Retirement Account. For 50 or older, they can put up

to $ 6,000 and get the tax benefits. There are two options when you open Individual

Retirement Account, it is a traditional Individual Retirement Account or a newer Roth

Individual Retirement Account. The donation and withdrawal tax treatment are based on the

option. They should know after tax deduction based on the inflation and the type of

Individual Retirement Account.

Tom and Deena Li must to consider basic investment principles. The inflation and the

type of investment take an important role in retirement. They must to find the savings or

pension plan is invested. They also must find about the investment plan options with asking

the questions. Tom and Deena Li can put the savings in investments. They should reduce the

risk and increase the returns. The investment can change time to time depends on the age,

goals, and finances situation.

Moreover, Tom and Deena Li cannot to use their retirement savings and just to keep it

safe. When they want to withdraw their retirement savings today, they will loss the principal

and interest. They also may lose tax benefit or must to pay the withdrawal penalty. They must

to keep their savings that invested in the current retirement plan, launch to IRA or launch in

new employer plan when changes the job.

 Tom and Deena Li can told their employer to start a plan. There are a selection of

retirement savings plans. The employers can make simple plans that can help it. The plan

must to start early. They can get more money when start saving as soon as possible. They can

make a retirement plans as a main priority. So, they need to establish the plans, diligence, and

set goals for their retirement plans.

Last but not least, Tom and Deena Li must to prepare for the unexpected such as the

unhealthy and incident. They need to consider to pay and respond or everything from small

problems that come. They may expect health problems with that age and will do the best to

stay healthy and active. There are a plans to meet unexpected obstacles. There are a lot of

problems to retirement early such as ill physical health, lost job, take care of my family

member and mental health like addiction, depression and anxiety.

 References

All Worth Financial. (2017, October 27). 6 Ways to Prepare for an Unexpected Early

Retirement. Retrieved from https://allworthfinancial.com/6-ways-to-prepare-for-an-

unexpected-retirement

Dana Anspach. (2010, March 24). Here Are 5 Easy Steps to Determine If You Have Enough

to Retire. Retrieved from https://www.thebalance.com/calculate-retirement-funds-

2388829

EMPLOYEE BENEFITS SECURITY ADMINISTRATION. (2017, September). Top 10

Ways to Prepare for Retirement. Retrieved from file:///C:/Users/user/Downloads/top-

10-ways-to-prepare-for-retirement.pdf

Fuscaldo, D. (2012). 10 Steps to Get Ready for Retirement - Financial Planning. Retrieved

from https://www.aarp.org/work/social-security/info-05-2011/10-steps-to-retire-

every-day.html

Hands on Banking. (2018, March 16). Start saving for retirement. Retrieved from

https://handsonbanking.org/articles/start-saving-for-retirement/