ANSWER ALL PARTE $1-7$

Retirement calculations

Use this google sheet to assist you with calculations $$

Use the following assumptions for all calculations:

Discount rate during employment

$6\%$

Interest rate during retirement

$4\%$

Life expectancy

Age $85$

Annual increase in salary

$3\%$

Starting salary

$$100,000$

$1.$ Assume that the taxpayer starts working at the age of $32$ and wants to retire at age $65.$ If they retire at the expected age and want to be able to draw about the same amount pretax as their monthly earnings at the time of retirement, about what percentage of their salary would they need to contribute to the retirement account each year?

$2.$ Assume that the taxpayer starts working at the age of $32$ and wants to retire at age $65.$ If they retire at the expected age and want to be able to draw about half their pretax monthly earnings at the time of retirement, about what percentage of their salary would they need to contribute to the retirement amount each year?

$3.$ Same facts as #$2-$ how does this change if the employer matches the employee$$s contribution?

$4.$ Same facts as #$2-$ How would this change if the taxpayer started working at age $40?$

$5.$ Same facts as #$2-$How would this change if the taxpayer lives to be $95?$

$6.$ What tax and nontax factors should we consider when planning for retirement?

$7.$ What are some tax planning ideas for saving for retirement?