Posted: November 25th, 2015
Risk Management – Retirement Assignment
Calculate how much money you will need to save for retirement to live at a life style that will be acceptable to you.
1. What type of retirement account(s) do you hope to use? Explain why.
2. How much will you contribute (monthly or annually) to each account. How? Keep in mind the maximum allowable allocation to different accounts.
3. What assumptions did you use in your calculations? (Inflation, rates of return, matching, etc.) Explain why you used each.
4. How many years to you plan on contributing to your retirement account? Specify which years, and why.
5. How much do you hope to have saved before you retire?
6. Calculate your life expectancy using an online calculator. (See links below.)
7. At what age do you plan on retiring? How long will you draw on your retirement funds?
8. How much do you expect to withdraw annually or monthly when you retire? How much is this in today’s dollars vs future dollars?
9. Do you expect to receive any additional funds for retirement? If so, from where?
10. Explain how/why this retirement saving plan will be sufficient to support your lifestyle both now and at retirement.
Notes:
Make sure you include an inflation rate and TVM concepts in your calculations. You can use a financial calculator, online calculators, or either or both of the retirement Excel files posted in Canvas.
Life expectancy calculators:
a. http://gosset.wharton.upenn.edu/mortality/perl/CalcForm.html
b. http://www.ssa.gov/planners/lifeexpectancy.htm
c. https://www.livingto100.com/calculator
d. http://www.lifespancalc.com.
Other links:
http://inflationdata.com/Inflation/Inflation_Rate/Long_Term_Inflation.asp
http://www.usinflationcalculator.com/inflation/historical-inflation-rates/
http://blog.petetheplanner.com/what-rate-of-return-should-you-expect-on-your-investments
http://www.cnbc.com/id/46464842#.
http://www.ssa.gov/planners/benefitcalculators.htm
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