Bill and Kate Macranoughy (both 30) approached you to help them plan for their Retirement Needs in year 2057. Currently, their household expenses are $120,000 and they believe that they can reduce that by 20% for post-retirement needs since they will not have to save for taxes or retirement anymore. They believe after researching their favorite economist that the current inflation rate will decline and so they are hoping for an average of 5% inflation. Their Statement that they saved down from www.ssa.gov said that Bill would receive $25,000 SS Benefits annually and Kate would receive SS Benefits of $23,000 annually. Bill has a pension from when he was at Harvard which will provide $8,000 annual income. Another source of income is that Kate will receive an annuity of $5,000 annually from an annuity inherited from her grandparents. Currently, their investment portfolio is earning 9% Rate of Return but they want YOU to choose what their return on assets rate will be for AFTER they retire. Compute the Annual Savings required to fund their Retirement Nest Egg by completing the worksheet below.

I. Estimated Household Expenditures in Retirement: A. Approximate number of years to retirement B. Current level of annual household expenditures, excluding savings C. Estimated household expenses in retirement as a percent of current expenses, may be 100%. D. Estim Inflation Factor: M. Anticipated return on assets held after retirement N. Amount of retirement funds required-size of nest egg (LM) O. Expected rate of return on investments prior to retirement P. Compound interest factor for an annuity (in Appendix B): Based on years to retirement (A) and an expected rate of return on investments of Annual savings required to fund retirement nest egg (NP) I. Estimated Household Expenditures in Retirement: A. Approximate number of years to retirement B. Current level of annual household expenditures, excluding savings C. Estimated household expenses in retirement as a percent of current expenses, may be 100%. D. Estim Inflation Factor: M. Anticipated return on assets held after retirement N. Amount of retirement funds required-size of nest egg (LM) O. Expected rate of return on investments prior to retirement P. Compound interest factor for an annuity (in Appendix B): Based on years to retirement (A) and an expected rate of return on investments of Annual savings required to fund retirement nest egg (NP)