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Tom Hagen just graduated from OSU and has taken a job in Dallas, TX. During his first week with his new company, Tom attends a Human Resources seminar where he chooses a health care plan, life insurance, and a retirement savings plan. The discussion about retirement plans makes Tom think about how much he will need in retirement and how much he can save. The Excel file has monthly prices for Vanguards S&P 500 ETF (Ticker = VOO), Vanguards Total Bond Market Index ETF (VBTLX). We can calculate the historical monthly Geometric returns of VOO, VBTLX and predict the future returns. Of course, the future return depends on the market following its historical trends during the next four decades, which isnt guaranteed. Assume Tom invests $300 a month with the first deposit occurring at the end of the month for the next 40 years. There will be 480 deposits in 40 years. Use the TVM calculator for the following questions. If Tom invests 100% of his money in Vanguards S&P 500 ETF (VOO), how much money will he have at retirement? Months (N): Monthly Rate (I/Y): PV: Monthly Payments: Compute FV = If Tom invests 100% of his money in Vanguards Total Bond Market ETF (VBTLX), how much money will he have at retirement? Months (N): Monthly Rate (I/Y): PV: Monthly Payments: Compute FV = If Tom invests in 60% in Vanguards S&P 500 ETF (VOO) and 40% in Vanguards Total Bond Market ETF (VBTLX), how much money will he have at retirement? Months (N): Monthly Rate (I/Y): PV: Monthly Payments: Compute FV= Americans say, on average, that it takes a net worth of $2.27 million to be considered wealthy, according to a 2019 survey from Charles Schwab. Assume Tom retires with $2.27 million in his retirement accounts. If he moves his money to a safe account Vanguards Total Bond Market ETF (VBTLX) fund, how much can he withdraw each month in retirement (assume he waits one month after retirement to make his first withdrawal and that he will live 25 years after retiring)? There are 300 months in 25 years. Months (N): Monthly Rate (I/Y): PV: Monthly Payments = Compute FV

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