Ch 17: Assignment- Retirement and Estate Planning Attempts: Attention: Due to a bug in Google Chrome, this page may not function correctly. Click here to learn more Average /16 3. Estimating retirement savings goals in today's dollars Saving Today for Retirement Tomorrow im Alden is a 47-year-old real estate agent earning $50,000 per year. Jim wants to retire in 20 years when he is 67 im expects to live for 13 more years after he retires same as they are now after he retires. He estimates that, along with his other sources of income and assets, by then, 100% of his rrent income will be necessary to support the lifestyle he desires. Jim saves and invests but is pretty sure he should be saving more now to meet tomorrow's retirement goals. using this information and the information in the following tables, complete the worksheet to determine if Jim's ament plan will enable him to reach his goals. Assume a 3% return and growth rate (adjusted for inflation) on all savings and investments. Round your answers to the nearest dolar. Enter zero (O) in any rows for which there is no gure. Any Social Security retirement benefits or pension payments are annual amounts Savings & Investments- Current Balances Amounts that 3im already has available in today's dolars Employer savings plans: $40,000 TRAs and keoghs: $5,000 Other investments: $10,000 Home equity (net of possible replacement with new home atter retiring): s20,000 savings & Investments Current Contributions Jim saves or invests $1,200 per yeer Other Income Accorcing to 3im's most current Social Security statement, his estimated monthly Sacial Secunity retirement benefit in todays dolars is $1,600. 3im's emplayer does not cfter a pension plan, 3im is enrolled in an employer-sponsored retrement plen in today's dollars is $1,600. Jim's employer does not offer a pension retirement plan. Future Value of a Single Amount X Interest Factors - Future Value of a single Amount Years 2% 1.2190 1.24341.3842 1.5395 1.7103 1.26821.4258 1.6010 1.7959 1.2936 1.4685 1.3195 1.5126 1.73171.9799 1.3459 1.5580 1.8009 2.0789 1.3728 1.6047 1.4002 1.6528 1.94792.2920 1.4280 1.7024 2.0258 2.4066 1.4568 1.7535 2.1068 2.5270 1.48591.8061 2.1911 2.6533 1.8114 2.4273 2.2080 3.2620 4.8010 7.0400 3% 4% 5% 10 1.3439 1.4802 1.6289 12 13 14 15 16 17 18 19 20 1.6651 1.8856 1.8730 2.1829 30 3.2434 4.3219 40 2. Estimated social security ret rement benerit in today s del 3. Estimared employer pension tenerit in tedey's della 4 im 's employer not offer in today's dollars is retirement plan. 1,600- does a pen Future value of an Annuity Interest Factors- Future Value of an Annuity Years 3% 4% 5% 2% 10.9497 11.4639 12.0061 12.5779 12.1687 12.807813.486414.2068 13.4121 14.1920 15.0258 15.9171 14.6803 15.6178 16.6268 17.7130 15.9739 17.0863 18.2919 19.5986 17.2934 18.5989 20.0236 21.5786 18.6393 20.1569 21.8245 23.6575 0 12 13 14 15 16 17 20.0121 21.7616 23.6975 25.3404 18 19 20 30 40 21.4123 23.4144 25.6454 28.1324 22.8406 25.1169 27.6712 30.5390 24.2974 26.8704 29.7781 33.0660 40.5681475754 56.0849 66.4389 60.4020 75.4013 95.0255 120.7998 1. A a income neaced at ret rement n teday, sclars 2. Estirised scial sed.ty retrerent benefit ih today a do is $1,600. Jim's employer does not ofer a p in today's dollars retirement plan. Present value of an Annuity Interest Factors -Present Value of an Annuity 4% 5% 296 8.9826 8.5302 8.1109 7.7217 9.7868 9.2526 8.7605 8.3064 10.5753 9.9540 9.3851 8.8633 11.3484 10.6350 9.9856 9.3936 12.1062 11.2961 10.5631 9.8986 12.8493 11.9379 11.1184 10.3797 13.5777 12.5611 11.6523 10.8378 14.2919 13.1661 12.165711.2741 14.9920 13.7535 12.659311.6896 15.6785 14.3238 13.1339 12.0853 16.3514 14.8775 13.5903 12.4622 Years 3% 10 12 13 14 15 16 17 18 19 20 1.Annual inco me heeced at ret rement in today 's dellars 2.Estimated socal securfty retrement benefit ih today 3. Estimated emplover penzion benefit in today s dollars Jim Alden's Numbers 1. Annual income needed at retirement in today's dollars. 2. Estimated social security retirement benefit in today's dollars. 3. Estimated employer pension benefit in today's dollars. 4. Total estimated retirement income from Social Security and employer pension in today's dollars. s. Additional income needed at retirement in today's dollars. 6. Amount Jim must have at retirement in today's dollars to receive additional annual 7. Amount already available as savings and investments in today's dollars. income in retirement. A. Employer savings plans (such as 401(k), SEP-IRA, profit-sharing) B. IRAs and Keoghs C. Other investments, such as mutual funds, stocks, bonds, real estate, and other assets available for retirement D. Portion of current home equity considered savings, net of cost to replace current home with another home after retirement (optional) E. Total: A through D 8. Future value of current savingsfinvestments at time of retirement 9. Additional retirement savings and investments neeced at time of retrement 10. Annuai savings neeced (to reach amount in line 9) before retrement 11. Current annua contibution to savings and investment plans. 12. Addtional amount of annuai savings that you need to set as ce in today s doliars to achieve retrement ges tih ine . Ch 17: Assignment- Retirement and Estate Planning Attempts: Attention: Due to a bug in Google Chrome, this page may not function correctly. Click here to learn more Average /16 3. Estimating retirement savings goals in today's dollars Saving Today for Retirement Tomorrow im Alden is a 47-year-old real estate agent earning $50,000 per year. Jim wants to retire in 20 years when he is 67 im expects to live for 13 more years after he retires same as they are now after he retires. He estimates that, along with his other sources of income and assets, by then, 100% of his rrent income will be necessary to support the lifestyle he desires. Jim saves and invests but is pretty sure he should be saving more now to meet tomorrow's retirement goals. using this information and the information in the following tables, complete the worksheet to determine if Jim's ament plan will enable him to reach his goals. Assume a 3% return and growth rate (adjusted for inflation) on all savings and investments. Round your answers to the nearest dolar. Enter zero (O) in any rows for which there is no gure. Any Social Security retirement benefits or pension payments are annual amounts Savings & Investments- Current Balances Amounts that 3im already has available in today's dolars Employer savings plans: $40,000 TRAs and keoghs: $5,000 Other investments: $10,000 Home equity (net of possible replacement with new home atter retiring): s20,000 savings & Investments Current Contributions Jim saves or invests $1,200 per yeer Other Income Accorcing to 3im's most current Social Security statement, his estimated monthly Sacial Secunity retirement benefit in todays dolars is $1,600. 3im's emplayer does not cfter a pension plan, 3im is enrolled in an employer-sponsored retrement plen in today's dollars is $1,600. Jim's employer does not offer a pension retirement plan. Future Value of a Single Amount X Interest Factors - Future Value of a single Amount Years 2% 1.2190 1.24341.3842 1.5395 1.7103 1.26821.4258 1.6010 1.7959 1.2936 1.4685 1.3195 1.5126 1.73171.9799 1.3459 1.5580 1.8009 2.0789 1.3728 1.6047 1.4002 1.6528 1.94792.2920 1.4280 1.7024 2.0258 2.4066 1.4568 1.7535 2.1068 2.5270 1.48591.8061 2.1911 2.6533 1.8114 2.4273 2.2080 3.2620 4.8010 7.0400 3% 4% 5% 10 1.3439 1.4802 1.6289 12 13 14 15 16 17 18 19 20 1.6651 1.8856 1.8730 2.1829 30 3.2434 4.3219 40 2. Estimated social security ret rement benerit in today s del 3. Estimared employer pension tenerit in tedey's della 4 im 's employer not offer in today's dollars is retirement plan. 1,600- does a pen Future value of an Annuity Interest Factors- Future Value of an Annuity Years 3% 4% 5% 2% 10.9497 11.4639 12.0061 12.5779 12.1687 12.807813.486414.2068 13.4121 14.1920 15.0258 15.9171 14.6803 15.6178 16.6268 17.7130 15.9739 17.0863 18.2919 19.5986 17.2934 18.5989 20.0236 21.5786 18.6393 20.1569 21.8245 23.6575 0 12 13 14 15 16 17 20.0121 21.7616 23.6975 25.3404 18 19 20 30 40 21.4123 23.4144 25.6454 28.1324 22.8406 25.1169 27.6712 30.5390 24.2974 26.8704 29.7781 33.0660 40.5681475754 56.0849 66.4389 60.4020 75.4013 95.0255 120.7998 1. A a income neaced at ret rement n teday, sclars 2. Estirised scial sed.ty retrerent benefit ih today a do is $1,600. Jim's employer does not ofer a p in today's dollars retirement plan. Present value of an Annuity Interest Factors -Present Value of an Annuity 4% 5% 296 8.9826 8.5302 8.1109 7.7217 9.7868 9.2526 8.7605 8.3064 10.5753 9.9540 9.3851 8.8633 11.3484 10.6350 9.9856 9.3936 12.1062 11.2961 10.5631 9.8986 12.8493 11.9379 11.1184 10.3797 13.5777 12.5611 11.6523 10.8378 14.2919 13.1661 12.165711.2741 14.9920 13.7535 12.659311.6896 15.6785 14.3238 13.1339 12.0853 16.3514 14.8775 13.5903 12.4622 Years 3% 10 12 13 14 15 16 17 18 19 20 1.Annual inco me heeced at ret rement in today 's dellars 2.Estimated socal securfty retrement benefit ih today 3. Estimated emplover penzion benefit in today s dollars Jim Alden's Numbers 1. Annual income needed at retirement in today's dollars. 2. Estimated social security retirement benefit in today's dollars. 3. Estimated employer pension benefit in today's dollars. 4. Total estimated retirement income from Social Security and employer pension in today's dollars. s. Additional income needed at retirement in today's dollars. 6. Amount Jim must have at retirement in today's dollars to receive additional annual 7. Amount already available as savings and investments in today's dollars. income in retirement. A. Employer savings plans (such as 401(k), SEP-IRA, profit-sharing) B. IRAs and Keoghs C. Other investments, such as mutual funds, stocks, bonds, real estate, and other assets available for retirement D. Portion of current home equity considered savings, net of cost to replace current home with another home after retirement (optional) E. Total: A through D 8. Future value of current savingsfinvestments at time of retirement 9. Additional retirement savings and investments neeced at time of retrement 10. Annuai savings neeced (to reach amount in line 9) before retrement 11. Current annua contibution to savings and investment plans. 12. Addtional amount of annuai savings that you need to set as ce in today s doliars to achieve retrement ges tih ine