Part 6: Sunplementing Prof, Business' Retirement Savings Prot. Business is considering retirement in 5 years. She is in a self-managed defined contribution pension plan and through automatic payroll deduction and University matching both based on mandated percentages of her salary $1400/ month is currently deposited into her pension plan. Due to the lack of recent raises at her public university, she doesn't plan on these monthly contributions increasing much if any over the next 5 years. Prot. Business currently has $900.000 in her pension plan account and is somewhat concemed if this along with her mandated future $1400 monthly deposits will adequately fund her retirement in 5 years. She is considering supplementing her pension plan by having automatic additional monthly deposits deducted into a 403c retirement plan which is like a 401k plan for employees of non-profit organizations like public universities. She is comfortable that this 403c plan since it has the same investment management companies and investment options as her current pension plan and it also has a Roth option where she wor't get a tax break for her deposits but her retirement withdrawals will be tax free. Prof. Business has a monthly deposit amount in mind. but wants your help in trying to figure out if this amount will be adequate. Given her current pension plan portfolio investment mix, she estimates a nominal annual expected return of 7.2% which translates to a 0.6% monthly expected return. 1. Prot. Business is considering having $1000/ month deducted from her salary and deposited into the 403c for the next 5 vears. This is addition to the $900,000 already in her pension plan today and the estimated $1400 monthly deposits into her current pension plan. What is the expected total value of Prof. Business' retirement accounts after making end of the month deposits of $2400 for 5 vears on top of her curtent retirement savings, of $900,000 at her expected monthly return? 2. Prot. Business estimates she wiml live for 20 years after her planned retirement in 5 years and wants a monthly retirement annuity with the withdrawals at the end of each month once she retires. What is her expected monthly cetirement income using vour answer from 81 and assuming she will earn a 0.5% (6.0\% APR) expected monthly. teturn after retirement? 3. Uponhearing the amount of this monthly retirement annuity. Prof. Business is happy with this figure because it's clowe to her current pec-tax income. However, she wonders it her expected monthly investment return is too optimistic and wants to change it to a 68 nominal annual rate, or 0.5 per month before and after retirement. Also. the wants a monthly income of $11,000 once she retires (for 20 vears). How much extra above her estimated mandated $1400 monthiy pension plan amount would Prot. Business need to deposit monthly into the 403c plan ovet the next 5 years to fund this retirement income goal? Part 6: Sunplementing Prof, Business' Retirement Savings Prot. Business is considering retirement in 5 years. She is in a self-managed defined contribution pension plan and through automatic payroll deduction and University matching both based on mandated percentages of her salary $1400/ month is currently deposited into her pension plan. Due to the lack of recent raises at her public university, she doesn't plan on these monthly contributions increasing much if any over the next 5 years. Prot. Business currently has $900.000 in her pension plan account and is somewhat concemed if this along with her mandated future $1400 monthly deposits will adequately fund her retirement in 5 years. She is considering supplementing her pension plan by having automatic additional monthly deposits deducted into a 403c retirement plan which is like a 401k plan for employees of non-profit organizations like public universities. She is comfortable that this 403c plan since it has the same investment management companies and investment options as her current pension plan and it also has a Roth option where she wor't get a tax break for her deposits but her retirement withdrawals will be tax free. Prof. Business has a monthly deposit amount in mind. but wants your help in trying to figure out if this amount will be adequate. Given her current pension plan portfolio investment mix, she estimates a nominal annual expected return of 7.2% which translates to a 0.6% monthly expected return. 1. Prot. Business is considering having $1000/ month deducted from her salary and deposited into the 403c for the next 5 vears. This is addition to the $900,000 already in her pension plan today and the estimated $1400 monthly deposits into her current pension plan. What is the expected total value of Prof. Business' retirement accounts after making end of the month deposits of $2400 for 5 vears on top of her curtent retirement savings, of $900,000 at her expected monthly return? 2. Prot. Business estimates she wiml live for 20 years after her planned retirement in 5 years and wants a monthly retirement annuity with the withdrawals at the end of each month once she retires. What is her expected monthly cetirement income using vour answer from 81 and assuming she will earn a 0.5% (6.0\% APR) expected monthly. teturn after retirement? 3. Uponhearing the amount of this monthly retirement annuity. Prof. Business is happy with this figure because it's clowe to her current pec-tax income. However, she wonders it her expected monthly investment return is too optimistic and wants to change it to a 68 nominal annual rate, or 0.5 per month before and after retirement. Also. the wants a monthly income of $11,000 once she retires (for 20 vears). How much extra above her estimated mandated $1400 monthiy pension plan amount would Prot. Business need to deposit monthly into the 403c plan ovet the next 5 years to fund this retirement income goal