Brite Divinity School Retirement Worksheet Template Paper

Content Type

User Generated

User

QnaalXehw

Subject

Business Finance

School

Brite Divinity School of Texas Christian University

Description

Retirement Worksheet

After my education is complete, my career plans include:
I am currently working _________hrs./week at _______________________ where my primary job
I believe / don’t believe this job will assist me in achieving my long-term career goals.
YOUR ESTIMATE/BEST GUESS:I intend to withdraw $_________________ at the END of each year from my retirement account to support my lifestyle.Input how much you think you need to live comfortably in your retirement years.To help you with your estimate, experts estimate you should plan to have approximately 70% of your ending salary in your retirement yearsin order to maintain your standard of living.(Assume no pension or Social Security benefits.)
When I retire, my goal is to have saved $_______________________ in a retirement account.I believe these funds will be sufficient to maintain my desired lifestyle through my retirement years.Input this figure BEFORE you calculate anything on the Excel template.Just take a guess.What do you think is a reasonable amount to have as your nest egg on the day you retire (age 65 in this example) that would support the annuity withdrawal from the previous question.
Based on my total retirement savings from question #5, assuming those funds are invested at 5% compounded annually, I am able to withdraw $______________ from my retirement fund each year over the next 20 years.(Show all inputsbelow.)Compute with the financial calculator (solve for PMT).
In order to meet your retirement goals (withdrawing an annuity stream for 20 years) from question #4, how much would you need to have in your retirement account at age 65?In other words, based on the amount of the annuity from question #4, the total retirement savings account must have an actual balance of $______________ in the account on the day of retirement at age 65 assuming a rate of 5% compounded anually.This is a present value of annuity calculation (CPT PV).(Show all inputsbelow.)
Review your answers from questions #4-#7.This is just the “off the cuff” approach to retirement planning.How close were you to “reality”?What are your thoughts or conclusions?
INPUT INTO TEMPLATE:
I PROMISE that I WILL SAVE 15% of that salary each year, and I expect to retire at age 65.
If my life expectancy is age 85, my retirement years will total ________.
SHOW WORK IN THE TEMPLATE:Assume I invest 15% of my salary annually based upon the above salaries at a savings rate of 6.5% compounded annually.At retirement age, my nest egg (including the retirement funds I had saved by age 30) would total:
SHOW WORK IN THE TEMPLATE:Based on the amount of funds in your retirement account (question #12), how much can you withdraw each year during retirement?In other words, what is your annual annuity?
With a disciplined savings plan I know I can meet my long-term financial goals:TRUE/FALSE
Please comment on this exercise.What are your thoughts/conclusions?

____________________________________________________________________________________

responsibilities include________________________________________________________________.

INPUTS:N =

I/Y =

FV =

PV =

PMT =

INPUTS:N =

I/Y =

FV =

PV =

PMT =

____________________________________________________________________________________

Now let’s take a more analytical approach to retirement planning:

I hope to have $___________________of retirement savings in the bank by age 30.

I hope to earn $___________________ per year when I’m 30.

I hope to earn $___________________ per year when I’m 40.

I hope to earn $___________________ per year when I’m 50.

I hope to earn $___________________ per year when I’m 60.

$_______________________(from Excel template)

additional information you will need

I'm 30 years old

I'm making 30,000 a year

and i can save $7,000 a year

Unformatted Attachment Preview

RETIREMENT WORKSHEET TEMPLATE The blue numbers are variables, but must be changed to match your worksheet figures. You may also change the number of compounding periods (n) and the interest rate, but if you change "n" or "r", you will also have to adjust the interest factors accordingly. First, you have to calculate the future value of your DIFFERENT annuities since you're saving EACH YEAR under different assumptions. Age 30-39 40-49 50-59 60-64 Salary Annual Savings @ 15% r n FVIFA FVA 4,500 8,250 12,000 15,750 5.00% 5.00% 5.00% 5.00% 10 10 10 5 12.5779 12.5779 12.5779 5.52563 $56,601 $103,768 $150,935 $87,029 30,000 55,000 80,000 105,000 at age 40 at age 50 at age 60 at age 65 The above represents a future value of an annuity calculation because you're saving EVERY year. Now, you have to take LUMP SUM FUTURE VALUE calculations to bring these figures from age 40, 50, and 60 (respectively) to your retirement age of 65: Age 40 50 60 65 Accumulated Savings 56,601 103,768 150,935 87,029 r n FVIF FVA 6.50% 6.50% 6.50% 6.50% 25 15 5 0 4.8277 2.5718 1.3701 1 $273,250 $266,870 $206,796 $87,029 $833,944 EXISTING SAVINGS: Do the same with your existing savings (but n= 35): 5,000 Early Savings 6.50% 35 9.0622 TOTAL IN SAVINGS ACCOUNT @ AGE 65 $45,311 $879,255 Assuming a 20 year retirement, how much can you withdraw each year so that at the end of 20 years, the balance will be $0? YOU CAN SOLVE FOR YOUR ANNUITY WITHDRAWAL AMOUNT IN ONE OF THREE WAYS: 1. Using a sinking fund interest factor where you apply that interest factor to the future value. 1st: Do a lump sum FV calculation to carry the total savings in the account (at age 65) 20 years into the future (from age 65-85): n=20, r=5% PV = $879,255 FVIF = 2.6533 $2,332,928 Assuming you didn't spend ANY of your retirement, this is the amount accumulated in your retirement fund at the age of 85. But, you want to draw down that account balance so that in 20 years, there's a $0 balance at age 85. It's a sinking fund problem. 2nd: Now do a sinking fund calculation: Future Value: $2,332,928 Sinking fund table factor: 0.0302 when n= 20, r = 5% 2. Solve for the annuity by the following formula: 3. On a financial calculator, solve for PMT: PV/PVIFA = A PV FV I/Y (r) n $879,255 $879,255 $0 5 20 ÷ 12.462 $70,454 $70,555 CPT PMT COMPUTE Based on the assumptions above, this is the amount you will be able to withdraw per year from your retirement account. *Your answers may differ slightly for each different method (though not statistically significant) because of the rounding involved when using the interest factor tables.
Purchase answer to see full attachment

Tags: savings account Accumulated Savings Annual Savings sinking fund interest factor total savings

User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

Kindly check if the work is satisfactory. feel free to reach out for any revisions and further assistance😜

RETIREMENT WORKSHEET TEMPLATE
The blue numbers are variables, but must be changed to match your worksheet figures.
You may also change the number of compounding periods (n) and the interest rate, but
if you change "n" or "r", you will also have to adjust the interest factors accordingly.
First, you have to calculate the future value of your DIFFERENT annuities since you're saving EACH YEAR
under different assumptions.
Age
30-39
40-49
50-59
60-64

Salary

Annual Savings @ 15%
30,000
55,000
80,000
105,000

4,500
8,250
12,000
15,750

r

n

5.00%
5.00%
5.00%
5.00%

10
10
10
5

FVIFA

FVA

12.5779
12.5779
12.5779
5.52563

$56,601
$103,768
$150,935
$87,029

at age 40
at age 50
at age 60
at age 65

The above represents a future value of an annuity calculation because you're saving EVERY year.
Now, you have to take LUMP SUM FUTURE VALUE calculations to bring these figures from age 40, 50, and 60 (respectively)
to your retirement age of 65:
Age
40
50
60
65

Accumulated Savings
56,601
103,768
150,935
87,029

r

n

FVIF

FVA

6.50%
6.50%
6.50%
6.50%

25
15
5
0

4.8277
2.5718
1.3701
1

$273,250
$266,870
$206,796
$87,029
$833,944

6.50%

35

9.0622

$63,435
$897,380

EXISTING SAVINGS:
Do the same with your existing savings (but n= 35):
7,000
Early Savings

TOTAL IN SAVINGS ACCOUNT @ AGE 65

Assuming a 20 year retirement, how much can you withdraw each year so that at the end of 20 years, the balance will be $0?
YOU C...