Hannah Cuttner is a 47-year-old mechanical engineer eaming $50,000 per year. Hannah wants to retire in 20 years when she is 67. Hannah expects to live for 13 more years after she retires. Hannah also expects her expenses to be about the same as they are now after she retires. She estimates that, along with her other sources of income and assets, by then, 100% of her current income will be necessary to support the lifestyle she desires. Hannah saves and invests but is pretty sure she 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 Hannah's current plan will enable her to reach her goals. Assume a 3% return and growth rate (adjusted for inflation) on all savings and investments. Round your answers to the nearest dollar. Enter zero (0) in any rows for which there is no figure. Any Social Security retirement benefits or pension payments are annual amounts. Savings & Investments Current Balances Amounts that Hannah already has available in today's dollars: Employer savings plans: $40,000 IRAs and Keoghs: $5,000 .Other investments: $10,000 .Home equity (net of possible replacement with new home after retiring): $20,000 Savings & Investments Current Contributions h saves or invests $1,200 per year Other Income According to Hannah's most current Social Security statement, her estimated monthly Social Security retirement benefit in today's dollars is $1,600. Hannah's employer does not offer a pension plan. Hannah is enrolled in an employer-sponsored retirement plan Click here for tables of interest factors Hannah Cuttner's Numbers 1. 2. 3. 4. Annual income needed at retirement in today's dollars. Estimated Social Security retirement benefit in today's dollars. Estimated employer pension benefit in today's dollars. Total estimated retirement income from Social Security and employer pension in today's dollars. Additional income needed at retirement in today's dollars. Amount Hannah must have at retirement in today's dollars to receive additional annual income in retirement. Amount already available as savings and investments in today's dollars. 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 S0,000 5. 6. 7. 8. Future value of current savings investments at time of retirement. 9 Additional retirement savings and investments needed at time of retirement 10. Annual savings needed (to reach amount in line 9) before retirement. 11. Current annual contribution to savings and investment plans. 12. Additional amount of annual savings that you need to set aside in today's dollars to achieve retirement goal (in line 1). Hannah Cuttner is a 47-year-old mechanical engineer eaming $50,000 per year. Hannah wants to retire in 20 years when she is 67. Hannah expects to live for 13 more years after she retires. Hannah also expects her expenses to be about the same as they are now after she retires. She estimates that, along with her other sources of income and assets, by then, 100% of her current income will be necessary to support the lifestyle she desires. Hannah saves and invests but is pretty sure she 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 Hannah's current plan will enable her to reach her goals. Assume a 3% return and growth rate (adjusted for inflation) on all savings and investments. Round your answers to the nearest dollar. Enter zero (0) in any rows for which there is no figure. Any Social Security retirement benefits or pension payments are annual amounts. Savings & Investments Current Balances Amounts that Hannah already has available in today's dollars: Employer savings plans: $40,000 IRAs and Keoghs: $5,000 .Other investments: $10,000 .Home equity (net of possible replacement with new home after retiring): $20,000 Savings & Investments Current Contributions h saves or invests $1,200 per year Other Income According to Hannah's most current Social Security statement, her estimated monthly Social Security retirement benefit in today's dollars is $1,600. Hannah's employer does not offer a pension plan. Hannah is enrolled in an employer-sponsored retirement plan Click here for tables of interest factors Hannah Cuttner's Numbers 1. 2. 3. 4. Annual income needed at retirement in today's dollars. Estimated Social Security retirement benefit in today's dollars. Estimated employer pension benefit in today's dollars. Total estimated retirement income from Social Security and employer pension in today's dollars. Additional income needed at retirement in today's dollars. Amount Hannah must have at retirement in today's dollars to receive additional annual income in retirement. Amount already available as savings and investments in today's dollars. 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 S0,000 5. 6. 7. 8. Future value of current savings investments at time of retirement. 9 Additional retirement savings and investments needed at time of retirement 10. Annual savings needed (to reach amount in line 9) before retirement. 11. Current annual contribution to savings and investment plans. 12. Additional amount of annual savings that you need to set aside in today's dollars to achieve retirement goal (in line 1)
