Personal financial plan assignment

Personal financial plan assignment - retiring today 2...

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Personal financial plan You are to create a personal retirement plan. This should, at a minimum, include: 1) assumptions about investment return and inflation, 2) the amount of money needed to retire at a reasonable range of ages (i.e., at 55, 60, and 65), and 3) the monthly savings required to reach your goals. You should also articulate an investment program that includes: 1) savings vehicle (i.e., Brokerage account, IRA, etc) with justification and 2) asset allocation (percent to stocks, bonds, etc). If you are married or engaged, this exercise is to be completed with your spouse/intended spouse (it might also be a good way to get a “wished for” prospect thinking in the right direction!). In its simplest form, you should do the following: 1. Decide how much income you will need in today’s dollars (i.e., if you were
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Unformatted text preview: retiring today). 2. Estimate inflation; you may want to investigate the impact of several different rates, but good guesses would be 2%, 2.5% and 3% 3. Calculate the amount of annual income you will need when you get ready to retire given the inflation estimates in step 2 (i.e, the FV of step 1) 4. Calculate the present value AT THE TIME YOU PLAN TO RETIRE of the annual retirement income you calculated in step 3. 5. Estimate the return you can earn on your investment; this will depend on the decisions you make, but good guesses are 7%, 8%, 9%, and 10% 6. Calculate how much you will need to save to retire at a reasonable range of ages. 7. Additionally, you will need to think about where you will put your money, etc....
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