The Goal Is to be able to withdraw $60,000 a year. From 65 toage 85

1. YOUR ESTIMATE/BEST GUESS: I intend to withdraw$_________________ at the END of each year from my retirementaccount to support my lifestyle. Input how much you think you needto live comfortably in your retirement years. To help you with yourestimate, experts estimate you should plan to have approximately70% of your ending salary in your retirement years in order tomaintain your standard of living. (Assume no pension or SocialSecurity benefits.)

When I retire, my goal is to have saved $_______________________in a retirement account. I believe these funds will be sufficientto maintain my desired lifestyle through my retirement years.Input this figure BEFORE you calculate anything on theExcel template. Just take a guess. What do you think is areasonable amount to have as your nest egg on the day you retire(age 65 in this example) that would support the annuity withdrawalfrom the previous question.

Based on my total retirement savings from question #5, assumingthose funds are invested at 5% compounded annually, I am able towithdraw $______________ from my retirement fund each year over thenext 20 years. (Show all inputs below.) Compute with thefinancial calculator (solve for PMT).

INPUTS:            N =

I/Y =

FV =

PV =

PMT =

In order to meet your retirement goals (withdrawing an annuitystream for 20 years) from question #4, how much would you need tohave in your retirement account at age 65? In other words, based onthe amount of the annuity from question #4, the total retirementsavings account must have an actual balance of $______________ inthe account on the day of retirement at age 65 assuming a rate of5% compounded anually. This is a present value of annuitycalculation (CPT PV). (Show all inputs below.)

INPUTS:            N =

I/Y =

FV =

PV =

PMT =

Review your answers from questions #4-#7. This is just the “offthe cuff” approach to retirement planning. How close were you to“reality”? What are your thoughts or conclusions?

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Now let’s take a moreanalytical approach to retirement planning:

INPUT INTO TEMPLATE:

I hope to have $___________________ ofretirement 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.

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 savingsrate of 6.5% compounded annually. At retirement age, my nest egg(including the retirement funds I had saved by age 30) wouldtotal:

$_______________________  (from Excel template)