2 *Please see Appendix 1-A for a detailed list of assumptions we have made in order to prepare your financial plan.

Transcription

1 Dear Mr. and Mrs. Callahan Per your request, we have analyzed your current financial situation using the information we gathered over the phone last month. We have provided you with a detailed financial plan for how both of you can retire when David turns 64. Our plan includes recommendations that will provide you with long term care insurance and also allow you to help fund your grandson and any future grandchildren s college educations. We will be here to assist you every step of the way in implementing the plan before and after you retire. It has been our great pleasure getting to know both of you in such a short period of time. We are excited about the opportunities you have in front of you and look forward to meeting you in person in a couple months. If you have any questions or concerns about the plan we have set up for you, don t hesitate to contact us via phone or . We would be happy to sit down with you or any of the professionals that we recommended as you start on this next journey in your life. Best Wishes, 2

2 Table of Contents Executive Summary 4 SWOT Analysis 5 Assessment of Needs, Wants, and Wishes 6 Analysis of Current Situation 6 Recommendations 7 Pension 8 Investments and the 403(b) 9 Life Insurance 11 Long Term Care 12 Auto 12 Refinancing your home 13 College Savings 14 Estate Plan 14 Plan of Action Checklist 15 Appendices 1-A (Assumptions) 16 2-A (Cash Flows in Key Years) 17 3-A (Car Loan Amortization Charts) 21 3

3 Executive Summary You have come to us with the task of getting you prepared for retirement. You have also expressed a desire to establish a fund for your grandchildren s college education and a plan for extensive long term care to keep that burden away from your children, Michael and Allison. While you have the final say on how to manage your finances, we believe our plan will allow you to achieve your goals as fast as possible. Based on the financial statements you have provided, your goal of retiring before David turns 65 is possible. Background David you have been working at John Hopkins Hospital (JHH) for the past twenty-five years. Ellie you have also been working at JHH for the past six years. In addition to the pension David will receive, you both have been depositing money into your 403(b) investment option from JHH. Interesting aspects of your current financial position is the value of your personal residence and the 529 Plan in David s name. This 529 Plan should come in handy when it comes to funding the grandchildren s college education. Your personal residence is valued at $475,000, the remaining mortgage you have is $226,964 which won t be payed-off for another 25 years. Other liabilities on your statement of financial position consist of a car loan and a student loan on Allison. The remaining useful background information we have gathered on you is the life insurance policies with $500,000 in death benefits for your spouse. We want to commend the steps you ve taken on your own but you still have some ground to make up. Thankfully, JHH will provide David with a matching account along with his pension. Since retirement is so close it is vital that we get to work as soon as possible. 4

4 SWOT Analysis What does a SWOT analysis tell us? This part of your plan consists of a SWOT Analysis; a planning method that evaluates the Strengths, Weaknesses, Opportunities, and Threats of your current financial position. Your strengths represent any internal factors that have a positive effect on your current financial situation. One of your greatest strengths is the fact that your combined salary is well above the average income. The fact that there are substantial salary increases from year to year is a representation of the hard work you two continue to do, and we want to commend you for your effort. A lack of debt and the presence of a college and retirement account are another example of strengths within your portfolio. Weaknesses in a SWOT Analysis are aspects in your current financial situations that can drail you from your goals. The main weaknesses we found are the mortgage and the auto loan that still have payment, no current long-term care insurance, and the lack of retirement planning thus far. The payments left on the mortgage are very achievable and will be discussed later in the plan. The long-term care needs will be taken care of as well. The lack of retirement planning is the main focus of our meeting today, as we will discuss with you the recommendations we have created. A few other weaknesses that must be observed is the fact that there is not an up-to-date estate plan as well as the inability to meet basic needs until retirement. Fortunately, these weaknesses are things we can control and eliminate. Opportunities are any external factors that can have a positive impact on your portfolio. For example, the fact that you came to us years before retirement is a great opportunity regarding your investments. Having a time horizon will allow us to allocate your investments into the appropriate categories that best suit your needs. Another key opportunity is to delay Social Security benefits until age seventy to take advantage of 132% of your benefit. Another opportunity is low interest rates, giving us the ability to lower your mortgage interest rate. This will allow us to pay off your mortgage in a shorter amount of time. One last opportunity that we would like to point out is the fact that we can use a catch up contribution on your 403(b) plan. This will all be explained in more detail later on in the plan. The last part of the SWOT Analysis consists of any threats, or external negative factors that can hinder your chances of reaching your goals. A main threat is the fluctuation and unpredictability of the economy in the future. This unpredictability is a risk that we will monitor regarding any investments. Threats are something that we cannot control, but we will be able to limit them to the best of our ability due to our detailed plan. Our SWOT Analysis is a general survey of what we observed when looking at your current financial position and matching them with your goals and objectives. We will go into depth throughout this plan and explain how we have come up with our observations, as well as how we will implement a plan to meet your goals. 5

5 Assessment of Needs, Wants, and Wishes The difference between needs and wants can be unclear at times, thus we will briefly examine your needs and wants. We will also interpret the wishes you have for you and your family. Needs Wants Wishes Life Insurance Increase emergency fund Have enough money to live until 90 Long Term Care Retire before David turns 65 Invest at your desired risk tolerances Pay for grandchildren s college These are our interpretations of your needs, wants, and wishes. If you have questions or concerns about our classifications do not hesitate to reach out and voice them to us. The plan we have in place addresses your needs first, then wants, and finally your wishes. If the market reacts the way we expect it to, you should be able to attain all of your needs, wants, and wishes. Analysis of Current Situation Our first step in this process was to analyze your financial situation without implementing any recommendations. Keep in mind that this analysis excludes all of your goals except for retirement and rate of return. Below is a table illustrating what you will need at your current standard of living in retirement. Total Amount Needed at Retirement ($1,232,202) Projected Value of Current Retirement Assets - Jt. $967, Surplus (Shortfall) at Retirement ($265,068.64) Monthly Payment to fund Shortfall - Beginning $2, Monthly Payment to fund Shortfall - Ending $2, Annual Payment to fund Shortfall - Beginning $24, Annual Payment to fund Shortfall - Ending $30, By this estimation you will fall short of retiring comfortably by approximately $265,068 if changes are not made. Additionally, David s pension is factored in to the table above. This immediately became a red flag for us and funding your retirement became our first priority considering how close you are to it. We believe that we have produced the best possible strategy for you to retire comfortably, as well as accomplish your needs, wants and wishes. 6

6 Recommendations Retirement planning is a process that takes hard work and commitment to stay on the right path. In our previous meeting you suggested you will be willing to compromise to fulfill your wants and wishes. After much contemplation and analysis, we have come up with the plan that we believe will work best for you. Here are a few recommendations you can implement right away. As you will see below, our first recommendation is to refinance your house (see page 13). Secondly, we believe you should begin maxing out both 403(b) plans, plus catchup of $6,000. Adding more life insurance will also be a priority (see page 11) along with beefing up your emergency fund. We took into consideration your desire to purchase long term care insurance and have added that into your plan (see page 12). Last but not least we need to discuss tradeoffs. There are several areas we recommend that you cut back spending on (see list below). Food- Groceries: 5% increase Food- Restaurant: 30% decrease Clothing: 10% decrease Entertainment: 10% decrease Hobbies: 10% decrease Travel: 30% decrease Gifts: 25% decrease Misc.- lifestyle: 30% decrease In retirement, we want to allow you to loosen your belt when it comes to what s important to you and your family. Our budget has allowed ample room to increase certain expenses. We did this with the thought that more grandbabies may be in your future. With the help of the recommendations on the subsequent pages and accomplishing these cash flow recommendations, you will be able to increase your travel, hobby and gift expenses by the following amounts (compared to your 2015 expenses). Travel: 20% increase Hobbies: 20% increase Gifts: 10% increase Additionally, this plan allows you to contribute to your grandkid s education through a 529 plan (see page 14). Those contributions are reflected in the cash flow in appendix 2a. Finally, we want to show you the same table as we showed you on page 6, adjusted for our recommendations. The pages following will show in detail the steps you need to take. Total Amount Needed at Retirement ($958,947) Projected Value of Current Retirement Assets - Jt. $967, Surplus (Shortfall) at Retirement $8, Monthly Payment to fund Shortfall - Beginning ($64.21) Monthly Payment to fund Shortfall - Ending ($64.57) Annual Payment to fund Shortfall - Beginning ($754.55) Annual Payment to fund Shortfall - Ending ($953.51) As you can see, with hard work and the knowledge to take the right steps it is possible to retire comfortably while also accomplishing your goals. 7

7 Pension David s pension is great asset that we will take full advantage of in retirement. A pension is a regular payment made during a person s retirement from an investment fund to which that person or their employer has contributed during their working life. David is projected to retire at the age of 64, however your pension does not come into effect until age 65. Due to this, we will pull some of the funds needed for retirement out of your retirement assets for that year. Once your pension begins, this will be used as your main source of income. The way the pension will be paid out is by a level income option. Under this option, you will receive an increased amount of benefit from the plan until your Social Security benefits begins, which will be at age 70. The goal of this plan is to provide you with a steady monthly income, both before and after you begin to receive Social Security benefits. The total valuation of the pension is $100,438, which is the annual benefit amount. See calculator below. Retirement Formula Step 1 1% of your final average compensation $ 2, Step 2 1/2% of your final average compensation above the social security limit $ * Step 3 Your years of benefit servics (up to 40) 33 $ 100,

8 Investments and the 403(b) You have both established separate 403 (b) plans and we commend you for this. To help you understand better, a 403 (b) plan is a type of retirement plan provided by employees of taxexempt organizations, such as John Hopkins. We will use two different 403 (b) plans to better fit your individual risk tolerances and giving you both more flexibility in your retirement plan. David, you consider yourself a moderately aggressive investor. This means you are mostly concerned with your investments growing in value and you do not need the returns as your current income. If you plan to retire early, some of your 403 (b) plan will be used as your current income. Due to this, we advise you to take a moderate risk approach. This will give you a time horizon between 5-10 years, which is when you will be able to retire. Taking a moderate risk approach compared to a moderately aggressive approach will also give you more security, because the risk is not as great. Below is a pie chart to show where your investments will be allocated. 9

9 Based on the John Hopkins 403(b) Plan Investment Options, we have decided to allocate your investments based on past market performance. Due to the fact that there are no International Stocks or Emerging Markets in the John Hopkins 403(b) Plan Investment Options, we will use some of the money from other savings to invest into these two categories. This will allow us to have a well-diversified portfolio, as well as giving us the best opportunity to meet your goals. Ellie, you considered yourself a moderately conservative investor. A moderately conservative investor is ideal for those who want to save a large portion of the portfolio s total value, but are still willing to take on some risk. We will use some of the profit you make from your investments as income before retirement, making the moderately conservative the right approach. Below you will see how we will diversify your 403(b) plan and where each percentage will go. 10

10 As stated in David s investment plan, the John Hopkins 403(b) Plan Investment Options does not offer any International Stocks or Emerging Markets. To best diversify your portfolio, we will use other savings to invest in these two categories. Your investment portfolio is very similar to David s, with a few minor differences. For one, we will be investing 10% of our allocation into a short-term bond. Another difference is the percentage we will invest into each category. Below are where we will allocate the funds. Life Insurance The sole purpose of life insurance is to replace income once a spouse/provider dies. The financial hardship a family experiences with an unexpected death has no comparison. The $500,000 policies you have in place for each other are not large enough to replace the income if David were to pass away suddenly. Based on the Human Life Value Method, which projects an individual s income throughout his remaining work life expectancy, we calculated David s income value to be $632,000 and Ellie s to be $252,000. Based on this calculation we have decided that you should purchase a ten year $150,000 term life insurance policy in David s name with Ellie as the beneficiary. The quote we received on a ten year $150,000 term policy came to $512 yearly. This $512 will be added to your existing life insurance expense, which will bring it to $1640 until However, in year 2026 you will have to pay $512 for the final year of the ten year $150,000 term policy. Even though this quote is from a respectable company, it is important to remember these are quotes based on the information we have. It will be smart to reach out to a licensed life insurance agent. 11

11 Long Term Care The family history you gave us suggests that long term care insurance would be a wise investment decision. It is said that the last four years of an individual s life can be the most expensive years of their life. We would like to prepare you and your children if that time were to ever come. We recommend you begin to purchase long term care sooner rather than later. Based on insurance quotes from Genworth Financial the total cost of two $200 per day benefit with a four-year benefit multiplier would be $4210, if you were to enroll this year. Now if you waited until David turned sixty-five the total cost for the same benefits would be $6220. Two thousand dollars may not seem like a major price difference right now but that $4210 price is locked, which means your payment will not change with inflation. The $6220 price is in today s dollars. Based on the inflation we expect the $6220 will actually be $8550 if you were to wait another ten years to purchase long term care insurance. Similarly, to the life insurance this is simply a quote. It is important to reach out to a long term care professional. Think of it like football, the financial planner (us) is similar to a quarterback. The quarterback makes sure his teammates are in position. In this case the teammates are the insurance agents. Auto Only having one automobile between the two of you is a major contribution to retiring early. However, we believe that buying a cheaper car in the future will further insure a secure retirement, as well as allowing you to contribute more towards your other goals. In our plan, we have made the assumption that you will need a new car every 6 years. Using the same format as your current auto loan, we recommend paying off each car in 5 years. Additionally, we recommend that you use the year after you pay off the loan to save for a down payment on the next car you buy. This is illustrated below: 12

12 Your current car payment is $8928 and the car will be paid off at the end of Our recommendation is that you save the save $8928 in 2018 to apply as the down payment to the car you will purchase in (We have factored in estimated trade in value and depreciation of your current car). Refinancing your Home Regarding your home, we have analyzed your mortgage loan and strongly recommend that you refinance your home. Rates are much lower than they were when you originally took out your mortgage loan and you also have a low level of debt. Additionally, we recommend that you take out a 15 year mortgage instead of a 30 year mortgage. We have spoken with a number of banks and can confidently estimate that you will land a rate of around 3%. This new rate will allow you to pay off your house by the time you retire in 2024 although you will need to bump up your house payments by an increasing amount each year. Illustrated below: Loan Payment Schedule Loan Information Loan Amount $ 226,964 Total Payments $ 259, Annual Interest Rate 3.00% Total Interest $ 32, Compound Period Annual Est. Interest Savings $ 25, Term of Loan in Years 15. First Payment Date 12/31/2016 Payment Frequency Payment Type Annual End of Period Number of Payments 8 Rate (per period) 3.000% Payment (per period) 19, Summary Year Payment Schedule [42] No. Due Date Payment Due Payment Interest Principal Balance $ 226, /31/16 $ 19, $ 29, $ 6, $ 22, $ 204, /31/17 $ 19, $ 30, $ 6, $ 23, $ 180, /31/18 $ 19, $ 31, $ 5, $ 25, $ 155, /31/19 $ 19, $ 32, $ 4, $ 27, $ 128, /31/20 $ 19, $ 33, $ 3, $ 29, $ 98, /31/21 $ 19, $ 34, $ 2, $ 31, $ 67, /31/22 $ 19, $ 35, $ 2, $ 32, $ 34, /31/23 $ 19, $ 35, $ 1, $ 34, $

13 College Savings In our last meeting, you wanted to know more about the possibility of contributing your grandchildren s college education. Wanting to contribute to your grandchildren s future education is a great decision, and one that will have a major impact on your family's future. A 529 Plan is an education savings plan that is exempt from federal tax. The 529 plan locks in a prepaid tuition and is different from state to state. The unique aspect about the 529 plan is that it allows you to choose any state s 529 plan, but still attend a university in a different state. For example, you can live in Texas, have a California 529 plan, and have your child or grandchild attend a college in Florida. Below is our recommendation for your desire to help contribute to your grandchildren s future education. From your assets, we noticed that you have already established a 529 Plan for Allison. Since she is graduated and will no longer need the plan, we will be able to roll the remaining balance into a new 529 Plan. We will use the Utah Education Savings Plan, or the UESP, because of their past performance and history. The UESP has had the best ten-year performance ratings, making it an ideal long term plan for your goals. Estate Plan We know it is a morbid subject but it must be confronted Estate planning is known as the process of accumulation, management, conservation, and transfer of wealth considering legal, tax, and personal objectives. In easier terms, it is financial planning in anticipation of a client s inevitable death. The objective of an estate plan is to ensure an effective transfer of assets to persons and/or institutions of your intention, and efficiently transferring your assets by minimizing taxation and transfer costs. By having a detailed estate plan, you can feel comfortable knowing that your loved ones will be properly provided for if something ever were to happen to you. You have a simple will in place, but it has not been updated in 7 years. It is crucial to update the will and make any necessary changes to it, especially after major life events, such as the birth of a grandchild. There are many risks with failing to have a detailed will, such as the transfer of property contrary to a client s wishes, insufficient financial provision for the client s family, and many other potential hazards. Any of these risks can be catastrophic to the decedent's heirs and family. If you choose to update your will, there are a few things we will do to make sure your needs are met. We will work closely with an attorney to ensure your estate plan follows Maryland state rules and regulations. The use of a Certified Public Accountant will be used to ensure taxes and transfer costs are minimized. We will also use a trust officer to handle trust accounts and a life insurance consultant to make sure you are properly insured. As your financial planners, we will develop a more thorough and in-depth estate plan that are in line with your needs, while periodically reviewing and updating your plan. If you so wish to continue with a more detailed estate plan, we will need additional information. Estate planning is not an easy subject to discuss, but never-the-less an important one. Please take some time to talk about your thoughts regarding estate planning and let us know if we can be assistance to you. 14

14 Plan of Action Checklist Year 1 Refinance mortgage Max out 403(b) s plus catch-up New life insurance policy Contribute to emergency fund Purchase long term care Cut various expenses (see page 7) Year 2-3 Continue to increase emergency fund Year 4 Make first contribution to 529 plan Finish increases to emergency fund Year 1 in Retirement Begin taking distribution from 403(b) s Year 2 in Retirement Begin taking pension benefits Year 6 in retirement Begin drawing Social Security benefits 15

15 Appendix 1-A Assumptions Plan begins January 1 st, 2016 End of plan when David reaches age 90 and Ellie reaches age 89. Inflation 3.22% a year. Income will increase at the same rate it has grown at for the last 24 years. o David = 3.627% o Ellie = 3.76% Considering that David and Ellie have different investment preferences, we used a weighted average of their rates of returns based on risk tolerance levels. Illustrated below: Weighted Rate of Return Formula Name Rate of Return % of 403b Held David 7% 87% Ellie 5% 13% 6.74% David will need a new car every 6 years. (2019, 2025, 2031, 2037, 2043). o We will use the same interest rate as the original car note. o In years that there is no auto payment, save for a down payment on the next car. o Car will depreciate at roughly 15% a year. Social Security Wage Base will grow at the same average rate it has for the last 24 years. (3.3916%) Upon retirement, due to increased travel, utilities will decrease by 5%. Insurance premiums remain constant after purchase. 16

16 Appendix 2-A Cash Flows in Key Years STATEMENT OF CASH FLOWS David & Ellie Callahan As of December 31, 2016 Income - Annual David Salary : $152, Bonus: $39, Total - David $191, Ellie Salary: $62, Bonus: $10, Total - Ellie $72, Total - Income $264, Taxes, Expenses and Savings - Annual Taxes Taxes - Federal $40, Taxes - FICA $12, Taxes - Medicare $3, Taxes - State $9, Total - Taxes $66, (Disposable Income = $197, ) % of Expenses % of Disposable Income % Change from 2015 Expenses Mortgage (PI) 20.0% 14.7% 44.4% $29, Mortgage (TI) 6.4% 4.7% - $9, Auto Payments 6.2% 4.5% - $8, Insurance - Auto 1.3% 0.9% - $1, Insurance - Term Life 1.1% 0.8% 45% $1, Insurance - LTC 3.0% 2.2% - $4, Insurance - LTD 0.7% 0.5% - $1, Benefits 4.7% 3.4% - $6, Utilities 12.3% 9.0% - $17, Medical 2.0% 1.4% - $2, Food - Groceries 8.5% 6.2% 5% $12, Food Restaurants 6.0% 4.4% -30% $8, Auto - Fuel/Repairs 2.1% 1.5% - $3, Clothing 4.0% 2.9% -10% $5, Entertainment 3.5% 2.6% -10% $5, Hobbies 3.3% 2.4% -10% $4, Travel 7.1% 5.2% -30% $10, Gifts 4.5% 3.3% -25% $6, Misc - Lifestyle 3.3% 2.5% -30% $4, Total - Expenses 73% $144, Savings David - 403(b) Match: $3, $24, Ellie - 403(b) $24, Savings Account JTWROS $4, Total - Savings $52, Total - Taxes, Expenses and Savings $264,

17 STATEMENT OF CASH FLOWS David & Ellie Callahan As of December 31, 2019 Income - Annual David Salary : $169, Bonus: $43, Total - David $213, Ellie Salary: $69, Bonus: $11, Total - Ellie $81, Total - Income $294, Taxes, Expenses and Savings - Annual Taxes Taxes - Federal $45, Taxes - FICA $13, Taxes - Medicare $4, Taxes - State $9, Total - Taxes $73, Expenses Mortgage (PI) $32, Mortgage (TI) $10, Auto Payments $5, Insurance - Auto $2, Insurance - Term Life $1, Insurance - LTC $4, Insurance - LTD $1, Benefits $7, Utilities $19, Medical $3, Food - Groceries $13, Food Restaurants $9, Auto - Fuel/Repairs $3, Clothing $6, Entertainment $5, Hobbies $5, Travel $11, Gifts $7, Misc - Lifestyle $5, Total - Expenses $154, Savings David - 403(b) Match: $4, $26, Ellie - 403(b) $26, Savings Plan $3, Savings Account JTWROS (Emergency Fund) $10, Total - Savings $67, Total - Taxes, Expenses and Savings $294,

18 First year of retirement. STATEMENT OF CASH FLOWS David & Ellie Callahan As of December 31, 2024 Income - Annual Retirement 403b Distribution $176, Total - Income $176, Taxes, Expenses and Savings - Annual Taxes $26, Total - Taxes $26, Expenses % of Expenses % of Disposable Income % Change from 2015 Mortgage (TI) 7.9% 7.83% - $11, Auto Savings 3.7% 3.62% - $5, Insurance - Auto 1.6% 1.58% - $2, Insurance - Term Life 1.1% 1.08% - $1, Insurance - LTC 2.9% 2.87% - $4, Medical Emergency Fund 5.8% 5.80% - $8, Utilities 14.5% 15.17% -5% $21, Medical 2.4% 2.42% - $3, Food - Groceries 10.6% 10.51% - $15, Food Restaurants 7.4% 7.34% - $11, Auto - Fuel/Repairs 2.6% 2.61% - $3, Clothing 5.0% 4.92% - $7, Entertainment 4.4% 4.35% - $6, Hobbies 5.3% 5.25% 30% $7, Travel 13.2% 13.08% 50% $19, Gifts 7.5% 7.43% 35% $11, Misc - Lifestyle 4.2% 4.12% - $6, Total - Expenses $150, Total - Taxes, Expenses and Savings $176, (Note: At 64 David will not be qualified for Medicare yet. Hence, the medical emergency fund. After 2024, you will not need this fund.) 19

19 Appendix 3-A Car Loan Amortization Charts Value of Car: Savings Applied: 1st Car Purchased in 2019 $ 32, Auto Loan: $ 24, $ 8, YEAR RATE PAYMENT INT PAID PRINC PAID BALANCE % $ 24, % $5, $ 1, $4, $ 19, % $5, $ $4, $ 15, % $5, $ $4, $ 10, % $5, $ $5, $ 5, % $5, $ $5, $ 0.00 Value of Car: Savings Applied: 2nd Car Purchased in 2025 $ 39, Auto Loan: $ 34, $ 5, YEAR RATE PAYMENT INT PAID PRINC PAID BALANCE % $ 34, % $7, $ 1, $ 6, $ 28, % $7, $ 1, $ 6, $ 21, % $7, $ $ 6, $ 14, % $7, $ $ 7, $ 7, % $7, $ $ 7, $ 0.00 Value of Car: Savings Applied: 3rd Car Purchased in 2031 $ 48, Auto Loan: $ 40, $7, YEAR RATE PAYMENT INT PAID PRINC PAID BALANCE % $ 40, % $9, $ 1, $ 7, $ 33, % $9, $ 1, $ 7, $ 25, % $9, $ 1, $ 8, $ 17, % $9, $ $ 8, $ 8, % $9, $ $ 8, $ - 20

20 Value of Car: Savings Applied: 4th Car Purchased in 2037 $ 58, Auto Loan: $ 49, $9, YEAR RATE PAYMENT INT PAID PRINC PAID BALANCE % $ 49, % $11, $ 2, $ 8, $ 40, % $11, $ 1, $ 9, $ 30, % $11, $ 1, $ 9, $ 20, % $11, $ $ 10, $ 10, % $11, $ $ 10, $ 0.00 Value of Car: Savings Applied: 5th Car Purchased in 2043 $ 70, Auto Loan: $ 59, $11, YEAR RATE PAYMENT INT PAID PRINC PAID BALANCE % $ 59, % $13, $ 2, $ 10, $ 48, % $13, $ 2, $ 11, $ 37, % $13, $ 1, $ 11, $ 25, % $13, $ 1, $ 12, $ 12, % $13, $ $ 12, $ - 21