6. Retirement Planning for Jennifer and Lennon.

Jenifer is an early bird for everything. She starts tocontribute $1,000 to her own 401(K) plan right after she joinedcompany A.E. Corp (at the age of 30). Jenifer's colleague, Lennon,is a late bird for everything. He decides to enjoy his life beforehe turns 45 and then contributes to his 401(K). Over a coffeebreak, he learns that Jenifer contributes $1,000 per month now. Hefigured that if he can contribute $2,000 every month starting fromage 45 he would have contributed the same amount as Jenifer whenthey turn 60 years old (he thought they will both contribute atotal of $360,000 = 1000 * 30 *12 also = 2000 *15 *12). In thisway, he can lead a pretty decent life style before he turns 45 andhave the same amount of retirement funds as Jenifer. After hisquick calculation, he decides to persuade Jenifer to do the same.1) If you were Jenifer, do you agree with Lennon? What seems to bethe most important factor to determine the end balance in theretirement plan? 3) What other factors are also important with a401(K) plan? 4) How can you guide your clients like Jennifer andLennon to make sound financial decisions to optimize theirretirement investments? What should you do differently?