Financial Planning

Lab3: Design a life-cycle model of saving for yourself. Note that you should at least include the following 4 points in your work. 1. In your work, you should first, present clearly your assumptions and any notations you adopt for your work. 2. You should compute how much you need to save for your retirement using two different approaches. The first one is to use a target replacement rate of preretirement income, and the second one is to maintain the same level of consumption spending before and after retirement. 3. Using tables or figures to show the time profiles of human capital, total wealth, and retirement fund implied by the pattern of income and saving in the two approaches. 4. Compare the two answers you obtained in Step 2, and decide which saving way you will use. Why