Saving Today for Retirement Tomorrow Crystal Malik is a 60-year-old mechanical engineer earning $150,000 per year. Crystal wants to retire in 10 years when she is 70. Crystal expects to live for 15 more years after she retires. Crystal also expects her expenses to be lower than they are now after she retires. She estimates that, along with her other sources of income and assets, by then, 75% of her current income will be sufficient to support the lifestyle she desires. Crystal 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 Crystal's current plan will enable her to reach her goals. Assume a 2% 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 Crystal already has available in today's dollars: Employer savings plans: $0 IRAs and Keoghs: $0 Other investments: $50,000 Home equity (net of possible replacement with new home after retiring): $10,000 Savings & Investments - Current Contributions Crystal saves or invests $900 per year. Other Income According to Crystal's most current Social Security statement, her estimated monthly Social Security retirement benefit in today's dollars is $3,000. Crystal's employer offers a pension plan. Assuming steady employment until retirement, according to the benefits advisor, Crystal's annual pension payment will be $70000. Interest Factors - Future Value of a Single Amount Interest Factors - Future Value of an Annuity Interest Factors - Present Value of an Annuity Years 2% 3% 4% 5% 10 1.2190 1.3439 1.4802 1.6289 11 1.2434 1.3842 1.5395 1.7103 12 1.2682 1.4258 1.6010 1.7959 13 1.2936 1.4685 1.6651 1.8856 14 1.3195 1.5126 1.7317 1.9799 15 1.3459 1.5580 1.8009 2.0789 16 1.3728 1.6047 1.8730 2.1829 17 1.4002 1.6528 1.9479 2.2920 18 1.4280 1.7024 2.0258 2.4066 19 1.4568 1.7535 2.1068 2.5270 20 1.4859 1.8061 2.1911 2.6533 30 1.8114 2.4273 3.2434 4.3219 40 2.2080 3.2620 4.8010 7.0400 Crystal Malik's Numbers 1. $ Annual income needed at retirement in today's dollars. Estimated Social Security retirement benefit in today's dollars. 2. $ 3. $ 4. Estimated employer pension benefit in today's dollars. Total estimated retirement income from Social Security and employer pension in today's dollars. $ 5. $ Additional income needed at retirement in today's dollars. Amount Crystal must have at retirement in today's dollars to receive additional annual 6. $ income in retirement. 7. $ 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 $ 8. 9. $ 10. $ Future value of current savings/investments at time of retirement. Additional retirement savings and investments needed at time of retirement. Annual savings needed (to reach amount in line 9) before retirement. Current annual contribution to savings and investment plans. Additional amount of annual savings that Crystal needs to set aside in today's dollars to achieve retirement goal (in line 1). 11. $ 12. $ Saving Today for Retirement Tomorrow Crystal Malik is a 60-year-old mechanical engineer earning $150,000 per year. Crystal wants to retire in 10 years when she is 70. Crystal expects to live for 15 more years after she retires. Crystal also expects her expenses to be lower than they are now after she retires. She estimates that, along with her other sources of income and assets, by then, 75% of her current income will be sufficient to support the lifestyle she desires. Crystal 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 Crystal's current plan will enable her to reach her goals. Assume a 2% 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 Crystal already has available in today's dollars: Employer savings plans: $0 IRAs and Keoghs: $0 Other investments: $50,000 Home equity (net of possible replacement with new home after retiring): $10,000 Savings & Investments - Current Contributions Crystal saves or invests $900 per year. Other Income According to Crystal's most current Social Security statement, her estimated monthly Social Security retirement benefit in today's dollars is $3,000. Crystal's employer offers a pension plan. Assuming steady employment until retirement, according to the benefits advisor, Crystal's annual pension payment will be $70000. Interest Factors - Future Value of a Single Amount Interest Factors - Future Value of an Annuity Interest Factors - Present Value of an Annuity Years 2% 3% 4% 5% 10 1.2190 1.3439 1.4802 1.6289 11 1.2434 1.3842 1.5395 1.7103 12 1.2682 1.4258 1.6010 1.7959 13 1.2936 1.4685 1.6651 1.8856 14 1.3195 1.5126 1.7317 1.9799 15 1.3459 1.5580 1.8009 2.0789 16 1.3728 1.6047 1.8730 2.1829 17 1.4002 1.6528 1.9479 2.2920 18 1.4280 1.7024 2.0258 2.4066 19 1.4568 1.7535 2.1068 2.5270 20 1.4859 1.8061 2.1911 2.6533 30 1.8114 2.4273 3.2434 4.3219 40 2.2080 3.2620 4.8010 7.0400 Crystal Malik's Numbers 1. $ Annual income needed at retirement in today's dollars. Estimated Social Security retirement benefit in today's dollars. 2. $ 3. $ 4. Estimated employer pension benefit in today's dollars. Total estimated retirement income from Social Security and employer pension in today's dollars. $ 5. $ Additional income needed at retirement in today's dollars. Amount Crystal must have at retirement in today's dollars to receive additional annual 6. $ income in retirement. 7. $ 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 $ 8. 9. $ 10. $ Future value of current savings/investments at time of retirement. Additional retirement savings and investments needed at time of retirement. Annual savings needed (to reach amount in line 9) before retirement. Current annual contribution to savings and investment plans. Additional amount of annual savings that Crystal needs to set aside in today's dollars to achieve retirement goal (in line 1). 11. $ 12. $