The Academy of Financial Services 35th Annual Meeting

Financial Planning, Living Standard, Education

In this presentation, we will explore why planning a household’s finances and refined financial planning questions are best addressed with a consistent decision tool based on economic theory. From the general question related to establishing the appropriate household budget for the current year to questions about “how should I payoff a student loan?,” “where should I live?,” “what if the income tax structure changes,” etc., the life-cycle approach to financial planning establishes living standard as the decision criterion while embodying all financial attributes and preferences of the individual or household. Financial plan construction and graphic and numerical results from the life-cycle approach will be illustrated by using an actual individual who is confronting the “when can I retire?” financial planning question.