Question
Case Study Statement: Financial Independence, Retire Early (F.I.R.E) is a movement that encourages people to save a significant portion of their earning (e.g., 70%) to
Case Study Statement:
Financial Independence, Retire Early (F.I.R.E) is a movement that encourages people to save a significant portion of their earning (e.g., 70%) to allow early retirement (e.g. in the age of 40). Please evaluate whether this extreme retirement plan can work for you and what percentage of your salary will need to be saved to achieve retirement at your desired retirement age?
Hints:
-You will need to develop the cash flow to account for your earning, expenses, and saving before and after your retirement.
-Estimate your annual salary based on your major and years of experience ($120,000 & 22 years of experience)
-Evaluate your annual living expenses and identify the maximum portion of your earning that you can save for investment(Annual living expenses = $40,000 & 20% of salary should be saved)
-Identify an appropriate personal MARR (MARR of 10%)
-Estimate your annual living expenses of your retired life (what would be your post-retirement life style, increased travel costs etc.) (Amount has risen to $60,000)
-Account for inflation
All values for the question above were assumed/made up.
Need help developing a cash flow for the problem above on Excel for the values above.
Thank you!
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