You realize you are entering the last third of your career and you are considering retirement in 10 years. You are in a self-managed defined contribution pension plan and through automatic payroll deduction and employer matching - both based on mandated percentages of your salary - $1,350 per month is currently deposited into your pension plan. Due to the lack of recent raises at your company, you dont plan on these monthly contributions increasing much, if any, over the next 10 years. You currently have $545,000 in your pension plan account and you are somewhat concerned if this along with your mandated future $1,350 monthly deposits will adequately fund your retirement in 10 years. You are considering supplementing your pension plan by having automatic additional monthly deposits deducted into a 403c retirement plan. you have a monthly deposit amount in mind, but wants additional help in trying to figure out if this amount will be adequate. Given your current pension plan portfolio investment mix, you estimate a nominal annual expected return of 7.8% which translates to a 0.65% monthly expected return.

1. You are considering having $900 per month which is about 10% of your monthly gross (pretax) salary deducted and deposited into the 403c for the next 10 years. This is in addition to the $545,000 already in your pension plan today and the estimated $1,350 monthly deposits into your current pension plan. What is the expected total value of your retirement accounts after making end of the month deposits of $2,250 for 10 years on top of your current retirement savings of $545,000 at your expected monthly return?

2. You estimate you will live for 25 years after your planned retirement in 10 years and you want a monthly retirement annuity with the withdrawals at the end of each month once you retire. What is your expected monthly retirement income using your answer from #I and assuming you will continue to earn your expected monthly return after retirement?

3. Upon hearing the amount of this monthly retirement annuity, you are happy with this figure because its higher than your current pre-tax income. However, you wonder if your expected monthly investment return is too optimistic and you want to change it to a 6% nominal annual rate, or 0.5% per month after retirement, but a 7.2% nominal annual rate, or 0.6% before. Also, you want a monthly income of $10,000 once you retire (for 25 years). How much extra above your estimated mandated $1,350 monthly pension plan amount would you need to deposit monthly into the 403c plan over the next 10 years to fund this retirement income goal?