Carlos and Ankti know that you are completing a personal finance course and that you understand how to complete a Projecting Retirement Income and Investment Needs worksheet. They have gathered the following information for you:

	Both Carlos and Ankti are 35 years old and plan to retire when they reach age 65.		Carlos will have worked at Proctor & Gamble for his entire career and will have an annual pension amount of $16,875.
	Their estimated level of annual current household expenditures is $60,000. They estimate that they will need 85% in retirement.		Ankti will have worked at Apple Computer for her entire career and will have an annual pension amount of $12,500.
	They will receive $1,556 per month of Social Security income and no other sources of income (except pension).		Based on their Internet research, they will use 6% as the average annual inflation rate for retirement calculations.
	They talked with friends and believe that 8% is a realistic rate of return on their investments once they retire.		After contacting their savings and loan, they found out a savings account is currently paying 5%.

Interest FactorsFuture Value

Periods	3.00%	5.00%	6.00%	8.00%	9.00%
20	1.810	2.653	3.210	4.661	5.600
25	2.090	3.386	4.290	6.848	8.620
30	2.420	4.322	5.740	10.062	13.260
35	2.810	5.516	7.690	14.785	20.410
40	3.260	7.040	10.280	21.724	31.410

Interest FactorsFuture Value of an Annuity

Periods	3.00%	5.00%	6.00%	8.00%	9.00%
20	26.870	33.066	36.780	45.762	51.160
25	36.460	47.726	54.860	73.105	84.700
30	47.570	66.438	79.060	113.282	136.300
35	60.460	90.318	111.430	172.314	215.700
40	75.400	120.797	154.760	259.052	337.870

Projecting Retirement Income and Investment Needs Name(s): Carlos and Ankti Date: May 2015 I. Estimated Household Expenditures in Retirement A. Approximate number of years to retirement 30 B. Current level of annual household expenditures, excluding savings C. Estimated household expenses in retirement as a percentage of current 85% expenses D. Estimated annual household expenditures in retirement (BC) Projecting Retirement Income and Investment Needs II. Estimated Income in Retirement E. Social Security, annual income F. Company/employer pension plans, annual amounts G. Other sources, annual amounts $0.00 H. Total annual income (E+F+G) I. Additional required income, or annual shortfall (D - H) Projecting Retirement Income and Investment Needs III. Inflation Factor J. Expected average annual inflation rate over the period to retirement 6% K. Inflation factor (a) Years to retirement (A) 30 (b) Average annual inflation rate (J) 6% L. Size of inflation-adjusted annual shortfall Projecting Retirement Income and Investment Needs IV. Funding the Shortfall M. Anticipated return on assets held after retirement 8% N. Amount of retirement fund required (your nest egg) o. Expected rate of return on investments prior to retirement 5% P. Compound interest factor (a) Years to retirement (A) 30 (b) Expected rate of return on investments prior to retirement (O) 5% Q. Annual savings required to fund retirement nest egg (NP)