Homework Answers
| Savings needed at retirement | $662,879.46 |
| Annual contribution | $2,874.18 |
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Age expected to start contributing to retirement account Retirement Age Life Expectancy # years working # years retired...
Sara Woodyard, age forty-four, plans to retire at age sixty-seven. Her life expectancy, accountin...
Sara Woodyard, age forty-four, plans to retire at age sixty-seven. Her life expectancy, accounting for family medical history, is age ninety-seven. Tara is single and currently earns $56,000 per year as a university librarian. At her normal retirement age, she expects to receive $28,700 in Social Security benefits (today’s dollars). She will also receive a small defined benefit pension in the amount of $13,500 from a local municipality. She has come to you to determine whether she is on track...
Consider a person who begins contributing to a retirement plan at age 25 and contributes for 40 years until retirem...
Consider a person who begins contributing to a retirement plan at age 25 and contributes for 40 years until retirement at age 65. For the first ten years, she contributes $3,600 per year. She increases the contribution rate to $5,600 per year in years 11 through 20. This is followed by increases to $10,600 per year in years 21 through 30 and to $15,600 per year for the last ten years. This money earns a return of 9 percent. First...
Consider a person who begins contributing to a retirement plan at age 25 and contributes for 40 years until retirem...
Consider a person who begins contributing to a retirement plan at age 25 and contributes for 40 years until retirement at age 65. For the first ten years, she contributes $3,300 per year. She increases the contribution rate to $5,300 per year in years 11 through 20. This is followed by increases to $10,300 per year in years 21 through 30 and to $15,300 per year for the last ten years. This money earns a return of 9 percent. First...
1 Required annuity payments Retirement income today Years to retirement Years of retirement Inflation rate Savings...
1 Required annuity payments Retirement income today Years to retirement Years of retirement Inflation rate Savings Rate of return $35,000 10 25 5.00% $165,000 9.00% 10 Calculate value of savings in 10 years: 11 Savings at t = 10 Formulas #N/A 12 13 Calculate value of fixed retirement income in 10 years: 14 Retirement income at t = 10 #NA 16 Calculate value of 25 beginning-of-year retirement payments at t=10: Retirement payments at t = 10 #N/A 19 Calculate net...
You would like to start saving for retirement and you have 40 years until the planned...
You would like to start saving for retirement and you have 40 years until the planned retirement date. Each year, during your retirement years (assume 30 years), you would like to spend an amount equivalent to the purchasing power of $50,000 today. You estimate that the expected rate of return on some recommended investment portfolio is 8%AER and you plan to select that portfolio during the working (savings) years. Assume 4%AER yield on your investments during retirement years. The annual...
CASE PROBLEM: RETIREMENT PLAN Tim is 37 years old and would like to establish a retirement...
CASE PROBLEM: RETIREMENT PLAN Tim is 37 years old and would like to establish a retirement plan. Develop a spreadsheet model that could be used to assist Tim with retirement planning. Your model should include the following input parameters: Tim's current age = 37 years Tim's current total retirement savings = $259,000 Annual rate of return on retirement savings = 4% Tim's current annual salary = $145,000 Tim's expected annual percentage increase in salary = 2% Tim's percentage of annual...
Investment A You are 25 years old, having just started working. You are considering a retirement...
Investment A You are 25 years old, having just started working. You are considering a retirement plan for a retirement at the age of 65. You want to be able to withdraw $79,000 from your savings account on each birthday for 20 years following your retirement at the age of 65. Your first withdrawal will be on your 66th birthday. To achieve your goal, you intend to make equal annual deposits in a pension scheme which offers 7% interest per...
You are 25 years old, having just started working. You are considering a retirement plan for...
You are 25 years old, having just started working. You are considering a retirement plan for a retirement at the age of 65. You want to be able to withdraw $76,000 from your savings account on each birthday for 20 years following your retirement at the age of 65. Your first withdrawal will be on your 66th birthday. To achieve your goal, you intend to make equal annual deposits in a pension scheme which offers 7% interest per year. According...
Rob is thinking about retirement. He is 38 years old and working as a sales associate at Dillard's. His current annual i...
Rob is thinking about retirement. He is 38 years old and working as a sales associate at Dillard's. His current annual income is $56,000 and this income will increase at a 5% rate annually. Dillard's offers a defined contribution plan and Rob contributes $2240 out of his gross income every year and now his current retirement account balance is $55,000. He wants to retire at his normal retirement age which is 67, and his life expectancy is 90. The interest...
Part 1: Tom and Debbie Flynn - Retirement Savings (15 points) Tom and Debbie are starting...
Part 1: Tom and Debbie Flynn - Retirement Savings (15 points) Tom and Debbie are starting to take their retirement planning seriously. They are both 46 and plan to retire in 20 years at the age of 66. They expect to live 15 years in retirement (a life expectancy of 81). Between their 401k and IRA accounts they currently have $67,966 in retirement savings They currently have a combined income of $88,000 per year and expect to be able to...
Consider a person who begins contributing to a retirement plan at age 25 and contributes for 40 years until retirement at age 65. For the first ten years, she contributes $3,600 per year. She increases the contribution rate to $5,600 per year in years 11 through 20. This is followed by increases to $10,600 per year in years 21 through 30 and to $15,600 per year for the last ten years. This money earns a return of 9 percent. First...
Consider a person who begins contributing to a retirement plan at age 25 and contributes for 40 years until retirement at age 65. For the first ten years, she contributes $3,300 per year. She increases the contribution rate to $5,300 per year in years 11 through 20. This is followed by increases to $10,300 per year in years 21 through 30 and to $15,300 per year for the last ten years. This money earns a return of 9 percent. First...
1 Required annuity payments Retirement income today Years to retirement Years of retirement Inflation rate Savings Rate of return $35,000 10 25 5.00% $165,000 9.00% 10 Calculate value of savings in 10 years: 11 Savings at t = 10 Formulas #N/A 12 13 Calculate value of fixed retirement income in 10 years: 14 Retirement income at t = 10 #NA 16 Calculate value of 25 beginning-of-year retirement payments at t=10: Retirement payments at t = 10 #N/A 19 Calculate net...
You would like to start saving for retirement and you have 40 years until the planned retirement date. Each year, during your retirement years (assume 30 years), you would like to spend an amount equivalent to the purchasing power of $50,000 today. You estimate that the expected rate of return on some recommended investment portfolio is 8%AER and you plan to select that portfolio during the working (savings) years. Assume 4%AER yield on your investments during retirement years. The annual...
CASE PROBLEM: RETIREMENT PLAN Tim is 37 years old and would like to establish a retirement plan. Develop a spreadsheet model that could be used to assist Tim with retirement planning. Your model should include the following input parameters: Tim's current age = 37 years Tim's current total retirement savings = $259,000 Annual rate of return on retirement savings = 4% Tim's current annual salary = $145,000 Tim's expected annual percentage increase in salary = 2% Tim's percentage of annual...
Part 1: Tom and Debbie Flynn - Retirement Savings (15 points) Tom and Debbie are starting to take their retirement planning seriously. They are both 46 and plan to retire in 20 years at the age of 66. They expect to live 15 years in retirement (a life expectancy of 81). Between their 401k and IRA accounts they currently have $67,966 in retirement savings They currently have a combined income of $88,000 per year and expect to be able to...
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