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6. Projecting retirement income and the investment needs worksheet Aa Aa Estimating Future Retirement Needs . Li and Courtney have gathered the following information for you. They know that you are completing a personal finance course and that you understand how to complete a Projecting Retirement Income and Investment Needs worksheet. You will need the following data: Both Li and Courtney are 45 years old and plan to retire when Li will have worked at Target for his entire career and will they reach age 65. have an annual pension amount of $19,375. Their estimated level of annual current household expenditures Courtney will have worked at General Electric for her is $67,500.00. They estimate that they will need 95% in entire career and will have an annual pension amount of retirement $12,500. They will receive $1,556 per month of Social Security income Based on their Internet research, they will use 6% as the and no other sources of income (except pension). average annual inflation rate for retirement calculations. They talked with friends and believe that 8% is a realistic rate After contacting their savings and loan, they found out a of return on their investments once they retire. savings account is currently paying 5%. . . . value (if your answer is zero, type "0"); 2) some values are Complete the worksheet provided. Note: 1) Every field must have repeated; and 3) round to two decimals places. Projecting Retirement Income and Investment Needs Name(s): Li and Courtney Date: May 2015 A. $ C. $ E. I. Estimated Household Expenditures in Retirement Approximate number of years to retirement B. Current level of annual household expenditures, excluding savings Estimated household expenses in retirement as a percentage of current expenses D. Estimated annual household expenditures in retirement (B x C) II. Estimated Income in Retirement Social Security, annual income F. Company/employer pension plans, annual amounts G. Other sources, annual amounts Total annual income (E + F + G) I. Additional required income, or annual shortfall (D-H) III. Inflation Factor J. Expected average annual inflation rate over the period to retirement K. Inflation factor (a) Years to retirement (A) (b) Average annual inflation rate (1) Size of inflation-adjusted annual shortfall II DIN DIN H. % L. $ $ IV. Funding the Shortfall M. Anticipated return on assets held after retirement N. Amount of retirement fund required (your nest egg) 0. Expected rate of return on investments prior to retirement P. Compound interest factor (a) Years to retirement (A) (b) Expected rate of return on investments prior to retirement (0) Q. Annual savings required to fund retirement nest egg (N:P) % $ 6. Projecting retirement income and the investment needs worksheet Aa Aa Estimating Future Retirement Needs . Li and Courtney have gathered the following information for you. They know that you are completing a personal finance course and that you understand how to complete a Projecting Retirement Income and Investment Needs worksheet. You will need the following data: Both Li and Courtney are 45 years old and plan to retire when Li will have worked at Target for his entire career and will they reach age 65. have an annual pension amount of $19,375. Their estimated level of annual current household expenditures Courtney will have worked at General Electric for her is $67,500.00. They estimate that they will need 95% in entire career and will have an annual pension amount of retirement $12,500. They will receive $1,556 per month of Social Security income Based on their Internet research, they will use 6% as the and no other sources of income (except pension). average annual inflation rate for retirement calculations. They talked with friends and believe that 8% is a realistic rate After contacting their savings and loan, they found out a of return on their investments once they retire. savings account is currently paying 5%. . . . value (if your answer is zero, type "0"); 2) some values are Complete the worksheet provided. Note: 1) Every field must have repeated; and 3) round to two decimals places. Projecting Retirement Income and Investment Needs Name(s): Li and Courtney Date: May 2015 A. $ C. $ E. I. Estimated Household Expenditures in Retirement Approximate number of years to retirement B. Current level of annual household expenditures, excluding savings Estimated household expenses in retirement as a percentage of current expenses D. Estimated annual household expenditures in retirement (B x C) II. Estimated Income in Retirement Social Security, annual income F. Company/employer pension plans, annual amounts G. Other sources, annual amounts Total annual income (E + F + G) I. Additional required income, or annual shortfall (D-H) III. Inflation Factor J. Expected average annual inflation rate over the period to retirement K. Inflation factor (a) Years to retirement (A) (b) Average annual inflation rate (1) Size of inflation-adjusted annual shortfall II DIN DIN H. % L. $ $ IV. Funding the Shortfall M. Anticipated return on assets held after retirement N. Amount of retirement fund required (your nest egg) 0. Expected rate of return on investments prior to retirement P. Compound interest factor (a) Years to retirement (A) (b) Expected rate of return on investments prior to retirement (0) Q. Annual savings required to fund retirement nest egg (N:P) % $

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