Section II. Estimated Income in Retirement.

Use the SSA website Links to an external site. to determine potential Social Security benefits.

For Company Employer/Pension Plans, assume the following:

a. If you are Self-Employed, you have a Keogh Plan or SEP

b. If you are employed in a government or civil service job, you have a pension; assume that your pension will pay you 2% of your annual salary for each year of service (formula: (.02 x years worked x highest annual salary).

c. If you are employed by a private company, you have a 401K, which you paid into and which was matched by your employer (see maximum limits)

Section III. Inflation Factor. Calculate the Inflation Factor using this equation:

(1+i)n = Inflation Factor i = Inflation Rate n = Difference between Base Year and Selected Year. Ex 2010 - 2005 = 5 years, therefore n = 5

Section IV. Funding Shortfall. Calculate the annual savings required to fund retirement nest egg (see worksheet for steps).