Personal Finance 1 Worksheet 16

# Personal Finance 1 Worksheet 16 - \$2,378 L Inflation...

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W16 Your Numbers Step 1: Estimate Your Annual Needs at Retirement A. Present level of your living expenditures on an after-tax basis \$22,000 B. Times 0.80 equals: Base retirement expenditure level in today's dollars x 0.80 \$17,600 C. Plus or minus: Anticipated change in living expenditures after retirement + or - \$2,000 D. Annual living expenditures at retirement in today's dollars on an after-tax basis = \$19,600 E. Before-tax adjustment factor, based on an average tax rate of ____% x 10% Use Table 16.2 in Text F. Before-tax income necessary to cover the annual living expenses in line D = \$21,778 Step 2: Estimate Your Income Available at Retirement G. Income from Social Security I today's dollars \$12,600 H. Plus: Projected pension benefits in today's dollars + \$4,800 I. Plus: Other income in today's dollars + \$2,000 J. Anticipated retirement income, in today's dollars [equals (lines G + H + I)] = \$19,400 Step 3: Calculate the Annual Inflation-Adjusted Shortfall K. Anticipated shortfall in today's dollars (line f minus line J)
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Unformatted text preview: \$2,378 L. Inflation adjustment factor, based on anticipated inflation rate of ____% 3.00% Years until retirement 40 FVIF: as found in Appendix A = 3.262 M. Equals: Inflation-adjusted shortfall (line K x line L) \$7,756 Step 4: Calculate the Total Funds Needed at Retirement to Cover This Shortfall Over the Number of Years You Expect to Be Retired N. Expected annual return on your investment after retirement 6.50% Inflation adjusted return 3.50% Number of years after retirement 25 PVIFA: as found in Appendix D = 16.482 O. Funds needed at retirement to finance the shortfall = \$127,837 Step 5: Determine How Much You Must Save Annually Between Now and Retirement to Cover the Shortfall P. Expected annual return on your investment before retirement 8.00% Years until retirement 40 FVIFA: as found in Appendix C = 259.057 V. Amount that must be saved = \$493 WORKSHEET FOR FUNDING YOUR RETIREMENT NEEDS...
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