1. Calculate how much the client will need on the day he retires to meet his retirement goal.

2. Calculate how much he needs to save regularly to meet his retirement goal.

3. Discuss if he can meet his current retirement goal with his current savings pattern.

4. Provide three alternatives for the client to consider and explain why each alternative might work. Summarize by explaining which alternatives might work best and be sure to explain why.

Client Information:

Derek Porter is 38 years old and single. He wants to retire at age 62 with an 80% wage replacement ratio. Derek currently earns $150,000 as an employee and has managed to save $50,000 towards his retirement goal. He is currently saving $7,000 per year in his 40l(k) plan. His employer's plan calls for a 50% match for contributions up to an employee elective deferral of 6%.

Client Goals:

Dereks primary goal, for this example, is to retire at age 62 with an 80% wage replacement, including Social Security, projected to be $32,000 in today's dollars at normal retirement age of 67. He wants to plan for a life expectancy to age 90.

External Information:

General inflation is expected to average 3.0% annually for the foreseeable future.

Dereks expected investment portfolio rate of return is 8.0%.

Dereks marginal income tax rate is 25%.