4. What is the insurance aspect of the Social Security annuity?
5. Why does a progressive tax code produce a retirement annuity for a middle-class household that is similar to that which would follow from a flat tax?
6. With no taxes or inflation (Spreadsheet 21.1), what would be your retirement annuity if you increase the savings rate by 1%?
A B C D E 1 Retirement Years Income Growth Savings Rate ROR 25 0107 0.15 0.06 3 Age Income Savings Cumulative Savings Consumption 50 000 7.6DO 7.500 42 600 31 53.500 1 025 15,975 45 475 35 70.128 10.519 61,650 59.60B 19 45 137.952 20.693 308,859 117.259 29 65 271.372 40,706 943.477 989 DEZ 39 65 620 EES 80 074 2,457.518 453.755 Total 7.445.673 1,116,851 Retirement Annuity 192 244 A B C D E Retirement Years Income Growth Savings Rate ROR 2 25 0.07 0.15 0.06 Age Income Savings Cumulative Savings Consumption DE 60000 84'$C$2 -C4 B4-C4 31 85-C5 GE 65 (zsay HI).BE8- 839 $C$2 D30'(1+$042)+C39 6ED-688 Total -SUM B4:839) -SUM C4:C39) Retirement Annulty |-PMT ED( 2.$A$2 -$D$39.0 0)G E F Rotfroment Yours Income Growth Rate of Inflation Savings Rate ROR TROR 25 0.07 0.03 0.15 0.06 0.0291 Income Deflator Saving Cumulative Savings rConsumption 30 80 000 1.00 7,500 7.500 42.500 31 53 500 1 03 8 025 15,975 44,150 35 70 128 1.16 10,519 61.658 51,419 19 45 137 952 156 269 0Z 308 859 75,264 29 55 271.372 2109 40,706 94 3,477 110,167 65 533 829 281 80.074 2457,518 161,257 40 Total 7.445 673 1.1 16,851 Real Annuity 49.668 A C D E F 1 Retirement Years Income Growth Rate of Inflation Savings Rate FOR TROR 25 0.07 0.03 0.15 0.06 (E2-C2)/(1+C2) Age Income Dellator Savings Cumulative Savings rConsumption 20 50000 1 84 $012 -D4 (84-D4/C4 5 31 84TH$8$2) 85 $0$2 -E4TH$8+2 +06 (86-DEVCG 39 65 C38TH$C$2] 2$0$.688 38 H+$8 2)D39 (839-D39 C39 Total -SUM B4:839) -SUM D4:D39) Real Annuity -PMT F$2.A$2.-$8 39/}C$39.0.0A B C D E F 1 Retirement Years Income Growth Rate of Inflation Savings Rate ROR TROR 25 0.07 0.1 0.06 0.0291 Age Income Deflator Savings Cumulative Savings IConsumption 30 50,000 1.00 5.000 5.000 45,000 31 53,500 1.03 5.511 10811 46 592 35 70,128 1.16 8.130 44,251 53,480 19 45 137.952 1.56 21,492 260.927 74,751 29 55 271,372 2.09 56.819 947.114 102.471 39 65 628'EES 2.81 150.212 2,964.669 136,331 40 Total 7.445.673 1,572.466 Real Annulty 59.918 A B C D E F 1 Retirement Years Income Growth Rate of Inflation Savings Rate ROR TROR 2 25 0.07 0.03 0.1 0.06 (E2-C2)(1+C2] Age Income Dellator Savings Cumulative Savings IrConsumption DE 50000 84'C4 $D$2 D4 (B4-D4VC4 31 -B4' H4$8$2) C4TH$C$2) -85*C6'$042 -E471+$8$2)+D6 39 65 C38TH$C$2) 839 C39 SD$2 E38 1+$8$2)+039 (839-D39VC39 Total -SUM(B4:839) -SUM(D4:D39) Real Annulty -PMT($F$2.$A$2.-SE$39/ C$ 39,0,0)A R C F F G H Income Growth Rate of Innation|Exemption Now Savings Rule HOR TROR Z 25 0.07 0 03 15000 0.35 015 0.0201 Income Deflator Exemption Saving Comunlive Sinings rconsumption Spreadsheets are 50,000 1.00 15,000 5016 0.922 35,067 available In Connect 71 57,500 1.03 15,450 5,465 10,724 21,242 36.724 15 70,128 17,289 7.678 14,GOD 83,620 41,319 45 137.952 1.56 23,370 16,605 31,106 438,234 57,864 20 271,172 2.09 31,407 34.057 65 205 1,293.559 81,772 573,829 2.81 12,208 40 71,207 135 087 ,762,956 1 16,265 Total 414.536 1,773,854 Pool Annuity 76,052 41 RETIREMENT Age Nom Withdraw Deflator Exemption Thees Funds Lent Consumption 220,420 2.90 13,474 44,236 3,768,313 60.789 70 248,085 3.26 48,931 10,789 1,720,867 60,789 75 287.598 3.78 56,724 57,719 3,456, 127 60.789 4.38 65,759 G6912 2,856,737 60,789 316.508 5.08 76,232 77.569 1,774,517 60,789 4 48,068 5.89 88,374 89,924 60.789 68 Total 8.036,350 1,612 828 A C D F G Retirement Yours Income Growth Rate of Inflation Savings Rate NOR ROW 25 DOT 0 03 15000 0.25 015 Income Deflator Exemption 30 Cumulative Savings Consumption 340624 31 HS'C5 09 1 17 367237/12378641 39 116364 980523GG4 40 Total SUM E4:E39 SUM F4:F39) Roal Annuity #PMT(SH$2,14$2, $G139/C$390 0 41 RETIREMENT 42 Age Nom Withdraw Deflator Exemption Funds Left GG 40:2013 i Consumption 67 THMOCH MAXDUMM41 12 67 90 GH Total THMOCH SUM 843 867) SUM E43:E67)
