Background spousal benefits and start his own. In the meantime, his ben efits will have increased by 24%. Of course, this strategy hed wih Brad taking his benefits and Shery When Sheryl graduated from Northeastem University in 2000 and went to work for BAE Systems, she did not pay cotud be swnc spousal benesfits until age 70 to the monthly payroll dedacion forsocaleei All these options led them to define tour altenative plans security. It was a nocessary il that may be belpful in re A: tirement years. However, this was so far in the future that she fully expected this govemment retirement benefit system to be broke and gone by the time she could reap any benefits Each takes earty benefits at age 62 with a 30% tedK tion to $1400 per month. B Each takes fill benefits at full retirement age of 67 and receives $2000 per month. Each delays benefits until age 70 with a 24% increase to $2480 per month from her years of contribsstions. This year, Sheryi and Brad, another engineer at BAE. got married: Recently, they both received notices from the Social Secarity Administration of their potential retirement C: amounts, were they to retire and start social securty bene fits at presot ages. Since both of them hope to relire a fe years early, they decided to pay closer attention to the pre dicted amount of retirement benefits and to do sone anal sis on ihe numbers D: One person takes full benefits of $2000 per nmonth at age 67, and the other person receives spousal benefits $1000 per month at age 67) and switches to delayed benefits of $2480 at age 70. They realize, of course, that the umbers wil change over time, based on their respective salaries and number of years of contribution to the social security system by hem and by Information They found hat tei projecles sther employers same which makos sene sice tholr salaries are very close to each other Although the imbers were sightly different in Case Study Exercises ther two mallings the similar messages to Brad and Sheryl Brad and Sheryl are the same age Brad determined that most of their investments make an average Gr 6% per year. with this as the interest rate, the analysis for thhe four altematives is possible. Shond ad Brad plan to answer the following ques- ions, but don't have tume this week. Can you please help them? Do the analysis for one person at a time, not the con can be summarized as follows: Ifyou siopworking and start receiving benefits Al age 62, your paynent would be about Al you lull retirement age 67 years), your paymer would be ple, and stop at the age of 85.) $2000 per m ow much in total withot the tme value of monny con- sidered will each plan A throngh D pay throegh age 85? 2. What is the future worth at 6% per war of each plan at At age 70, your payment wouid e about $2480 per month age 85? These numbers rpresent a reduction of 30% for early, re- tirement (age 62) and an increase of 24% for delayed retire. 3. Plot e fture worth vahies for all four plans on one preadsheet graph. ment age 70). Economically, what ts the best combination of plans for Brad and Sheryl, assuming they both live to be 85 years This couple also leaned that it is possible for a spoise to e spousal benefits at the me that one of them is at nll retirement age. In other words, if Sheryi starts her $2000 ben- efit at age 67, Brad can receive a benefit equal to 50% of hers. Ihen, when Brad reaches 70 years of age, he can discontiae 5. Develop at least o addl question that you thinlk Sheryl and Brad may have Answer the question. Background spousal benefits and start his own. In the meantime, his ben efits will have increased by 24%. Of course, this strategy hed wih Brad taking his benefits and Shery When Sheryl graduated from Northeastem University in 2000 and went to work for BAE Systems, she did not pay cotud be swnc spousal benesfits until age 70 to the monthly payroll dedacion forsocaleei All these options led them to define tour altenative plans security. It was a nocessary il that may be belpful in re A: tirement years. However, this was so far in the future that she fully expected this govemment retirement benefit system to be broke and gone by the time she could reap any benefits Each takes earty benefits at age 62 with a 30% tedK tion to $1400 per month. B Each takes fill benefits at full retirement age of 67 and receives $2000 per month. Each delays benefits until age 70 with a 24% increase to $2480 per month from her years of contribsstions. This year, Sheryi and Brad, another engineer at BAE. got married: Recently, they both received notices from the Social Secarity Administration of their potential retirement C: amounts, were they to retire and start social securty bene fits at presot ages. Since both of them hope to relire a fe years early, they decided to pay closer attention to the pre dicted amount of retirement benefits and to do sone anal sis on ihe numbers D: One person takes full benefits of $2000 per nmonth at age 67, and the other person receives spousal benefits $1000 per month at age 67) and switches to delayed benefits of $2480 at age 70. They realize, of course, that the umbers wil change over time, based on their respective salaries and number of years of contribution to the social security system by hem and by Information They found hat tei projecles sther employers same which makos sene sice tholr salaries are very close to each other Although the imbers were sightly different in Case Study Exercises ther two mallings the similar messages to Brad and Sheryl Brad and Sheryl are the same age Brad determined that most of their investments make an average Gr 6% per year. with this as the interest rate, the analysis for thhe four altematives is possible. Shond ad Brad plan to answer the following ques- ions, but don't have tume this week. Can you please help them? Do the analysis for one person at a time, not the con can be summarized as follows: Ifyou siopworking and start receiving benefits Al age 62, your paynent would be about Al you lull retirement age 67 years), your paymer would be ple, and stop at the age of 85.) $2000 per m ow much in total withot the tme value of monny con- sidered will each plan A throngh D pay throegh age 85? 2. What is the future worth at 6% per war of each plan at At age 70, your payment wouid e about $2480 per month age 85? These numbers rpresent a reduction of 30% for early, re- tirement (age 62) and an increase of 24% for delayed retire. 3. Plot e fture worth vahies for all four plans on one preadsheet graph. ment age 70). Economically, what ts the best combination of plans for Brad and Sheryl, assuming they both live to be 85 years This couple also leaned that it is possible for a spoise to e spousal benefits at the me that one of them is at nll retirement age. In other words, if Sheryi starts her $2000 ben- efit at age 67, Brad can receive a benefit equal to 50% of hers. Ihen, when Brad reaches 70 years of age, he can discontiae 5. Develop at least o addl question that you thinlk Sheryl and Brad may have Answer the