Retirement Worksheet

Retirement Worksheet ; Name: ____________________________________________

1. ; After my education is complete, my career plans include:

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2. ; I am currently working _________hrs./week at _______________________ where my primary job

responsibilities include________________________________________________________________.

3. ; I believe / don’t believe this job will assist me in achieving my long-term career goals.

4. ; YOUR ESTIMATE/BEST GUESS: ; I intend to withdraw $_________________ at the END of each year from my retirement account to support my lifestyle. ; Input how much you think you need to live comfortably in your retirement years. ; To help you with your estimate, experts estimate you should plan to have approximately 70% of your ending salary in your retirement years in order to maintain your standard of living. ; (Assume no pension or Social Security benefits.) ;

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

6. ; Based on my total retirement savings from question #5, assuming those funds are invested at 5% compounded annually, I am able to withdraw $______________ from my retirement fund each year over the next 20 years. ; (Show all work here.) ; Easiest to compute with the financial calculator (solve for PMT). ;

INPUTS:

7. ; In order to meet your retirement goals (withdrawing an annuity stream for 20 years) from question #4, how much would you need to have in your retirement account at age 65? ; In other words, based on the amount of the annuity from question #4, the total retirement savings account must have an actual balance of $______________ in the account on the day of retirement at age 65 assuming a rate of 5% compounded annually. ; This is a present value of annuity calculation. ; (Show all work here.)

INPUTS:

8. ; Review your answers from questions #4-#7. ; This is just the “off the 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 more analytical approach to retirement planning:

9. ; INPUT INTO TEMPLATE:

I hope to have $___________________ ; of retirement 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.

10. ; I PROMISE that I WILL SAVE 15% of that salary each year, and I expect to retire at age 65.

11. ; If my life expectancy is age 85, my retirement years will total ________.

12. ; SHOW WORK IN THE TEMPLATE: ; Assume I invest 15% of my salary annually based upon the above salaries at a savings rate of 6.5% compounded annually. ; At retirement age, my nest egg (including the retirement funds I had saved by age 30) would total: ;

$_______________________ ; (from Excel template)

13. ; SHOW WORK IN THE TEMPLATE: ; Based on the amount of funds in your retirement account (question #12), how much can you withdraw each year during retirement? ; In other words, what is your annual annuity?

$_______________________ ; (from Excel template)

14. ; With a disciplined savings plan I know I can meet my long-term financial goals: ; TRUE/FALSE

15. ; Please comment on this exercise. ; What are your thoughts/conclusions?