YULECTURE #9-RETIREMENT PLANNING

YULECTURE #9-RETIREMENT PLANNING - LECTURE #9-RETIREMENT...

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LECTURE #9-RETIREMENT PLANNING Chapter #17- Retirement Planning Introduction-Steps to Retirement Planning : 1. Set financial goals for retirement. 2. Determine the financial resources the family has now to put towards retirement. 3. Estimate how much family must save to meet their retirement goals. 4. Decide on the appropriate investment vehicles for savings for retirement. 5. Consider government & employer pension plans.
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The Retirement Planning Model W 0 (1+k) n + SUM (E t – C t ) (1+k) n-t = W n =SUM C t (1+k) t-n
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Achieving You Financial Goal Options: 1. Increase revenues 2. Decrease expenses 3. Delay retirement 4. Change financial expectation in retirement. See Example 17.1
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Income Shortfall In Retirement Expenses are greater than Income expected in retirement. Example 17.2-Illustrates the concept of the income shortfall and how the retirement goal can be calculated in terms of the income shortfall. NOTE that because of the long timeframe involved in retirement planning, calculations are just estimates. Inflation Discount real dollars using a real discount rate and discount nominal dollars using nominal discount rate. Income Tax
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YULECTURE #9-RETIREMENT PLANNING - LECTURE #9-RETIREMENT...

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