The Retired Couple
For many years Marie and Pierre Andre have dreamed of traveling after retirement. Their idea is to visit a different foreign country every year and visit their children and grandchildren more often. They are both 63 and enjoy good health and can readily afford this luxury. There is just one hitch to these pleasurable trips. Being gone from home presents some problems they would rather not deal with. Who will mow the yard when they’re gone? The crime rate is increasing in their neighborhood. What if someone breaks in when they’re gone? Suppose the pipes freeze in the winter? Their home is at the age that money need to be spent for a new heating and cooling system, various repairs, and maintenance. Marie and Pierre must now choose between spending their extra money on travel or housing.
1. What advantages would they enjoy if they rent?
a) no property taxes, no groundskeeping work, asset appreciation, very mobile
b) allows for redecorating, very mobile, no home repair, no property taxes
c) very mobile, no down payment, avoid falling house prices, better cash flow
d) very mobile, no down payment, no repair and maintenance, tax and advantages
e) potential source of cash, amenities may be provided, avoid real estate selling costs
2. If you want to stay away from any life plans that are risky and bear unnecessary costs, which of the following plan(s) would you avoid?
a) whole life
b) universal life
c) reentry life
d) level tern
e) variable life