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Money Management Finance and Accounting - Assignment Example
Author : zstoltenberg
Finance & Accounting
Pages 8 (2008 words)
Money Management Money may not be able to buy any mental happiness, yet it is a necessary instrument for everyone since it allows the exchange of material required for one’s everyday life. Hence, the management of money is also necessary such that the available funds may be optimally utilized or give sufficient outcomes as savings for the individual who might have invested the amount (Aldrow, vi)…
Management of Money: Discussion on the Case: As the case represents, the individual concerned has retired and he has $500,000 saved with him that he can use either for investment or for any other purpose. Either a yearly pension from a life insurance company may prove to be beneficial for him or the individual may manage the wealth himself by investing in a bank. The purpose here is to determine which approach would be more beneficial for the individual after his retirement. Case 1: Yearly Pension from Life Insurance Company: In case of life insurance companies, depending on the age and life expectancy of the individual the insurance company may decide on the pension amount that can be paid to the individual (A Basic Lesson in Immediate Annuities). It is assumed that the individual is a male and his age is 60 years. He has an amount of $50,000 to invest. If he invests the money in a life insurance company, several options of income payment may be available to him. The highest amount that he may receive is $8,455 on a monthly basis on the plan of “Guarantee Income for a 5-Year Period Certain Only” (Estimated Quotes for a Single Life Annuity). ...