Jill is 40 Has income of 120K Calculates a war of 66.67% (use 2/3rds) Plans on retiring at 63 Expects to live to 87 Has 50k in current savings Invests 50% in the stock market Once retired plans on investing 100% bonds B) Saving while working Jill 1) How much should Jill's original 50,000 have grown into when he is 50 ? 2) How much should Jill's annual savings from E1 have grown into when he is 50 ? (Make sure to use the annuity equation and not just a one time savings here) 3) How much should Jill's combined savings have grown into when he is 50 ? (Just combined 1 and 2 directly above) 4) How much should Jill's original 50,000 have grown into when he is 60 ? 5) How much should Jill's annual savings from E1 have grown into when he is 60 ? (Make sure to use the annuity equation and not just a one time savings here) 6) How much should Jill's combined savings have grown into when h is 60 ? (Just combined 1 and 2 directly above 2) A well planned retirement 2. Given the following: Jill is 40 Has income of 120k Calculates a war of 66.67% (use 2/3 rds) Plans on retiring at 63 Expects to live to 87 Has 50k in current savings Invests 50% in the stock market Once retired plans on investing 100% bonds A) Preliminaries: 1) What is Jiil's rWLE? (Remaining work life expectancy, aka t1] 2) What is Jill's RLE? (Retirement life expectancy, aka t2) 3) What is Jill's expected rate of return whille working and saving {r1} 4) What is Jill's expected rate of return while retired {12} B) Retirement needs 1) What would Jill need if retiring right now? 2) What would Jili need in future dollars when retiring? 3) What total retirement savings would be needed at the start of retirement to have this as an annuity paying the exact same amount each year for all of retirement? 4) What total retirement savings would be needed at the start of retirement to have this as an annuity due paying the exact same amount each year for all of retirement? 5) What total retirement savings would be needed at the start of retirement to have this as an annuity growing 3% per year for all of retirement? (Not this is not an annuity due) 6) What total retirement savings would be needed at the start of retirement to have this as an annuity due growing 3% per year for all of retirement? (Note this is growing and an annuity due. Easiest to calculate growing and then make the annuity due adjustment) C) Percentage withdrawals 1) What is the percentage of retirement savings withdrawn in first year, using a straight annuity? (This is just B2/B3 ) 2) What is the percentage of retirement savings withdrawn in first year, using an annuity due? (This is just B2/B4 ) 3) What is the percentage of retirement savings withdrawn in first year, using a growing annuity? (This is just B2/B5) 4) What is the percentage of retirement savings withdrawn in first year, using a growing annuity due? (This is just B2/B6)
