Asked by Kaileigh

Jim contributes 15% of his earnings to a retirement fund and they have $5,000 in savings. There is a $500,000 life insurance policy on Jim and a $100,000 policy on Jackie.

As their financial advisor, what part of Jim and Jackie’s financial plan would you encourage them to work on?
a.
They should work on their plan for managing income.
b.
They should work on their plan for managing their liquidity.
c.
They should work on their plan for protecting their assets.
d.
They should work on their plan for protecting their income.

All Answers 1

Answered by GPT-5 mini AI
b. They should work on their plan for managing their liquidity.

Rationale: $5,000 in savings is low for an emergency fund—most advisors recommend 3–6 months (or more) of living expenses in liquid assets. Retirement contributions and life insurance address long‑term income replacement and protection; the immediate shortfall is liquidity.