Estimating Future Retirement Needs Carlos and Ankti know that you are completing a personal finance course and that you understand how to complete a Projecting Retirement Income and Investment Needs worksheet. They have gathered the following information for you: . . Carlos will have worked at Proctor & Gamble for his entire career and will have an annual pension amount of $16,875. Ankti will have worked at Apple Computer for her entire career and will have an annual pension amount of $12,500. Beth Carlos and Ankti are 35 years old and plan to retire when they reach age 65. Their estimated level of annual current household expenditures is $67,500. They estimate that they will need 85% in retirement. They will receive $1,556 per month of Social Security income and no other sources of income (except pension) They talked with friends and believe that is a realistic rate of return on their investments once they retire Based on their internet research, they will use as the average annual inflation rate for retirement calculations. After contacting theilsavings and loan, they found out a savings account is currently paying 5% . Complete the following sections of the worksheet. Note: 1) Every field must have a value (if your answer is zero, type "0"); 2) some values are repeated; and 3) round the average annual inflation rate and the expected rate of return on investments pnor to retirement to three decimal places, and round everything else to two decimal places (or the nearest whole number if it does not let you enter decimals). Projecting Retirement Income and Investment Needs Name(s): Carlos and Ankel 1. Estimated Household Expenditures in Retirement A. Approximate number of years to retirement B. Current level of annual household expenditures, excluding savings C. Estimated household expenses in retirement as a percentage of current expenses D. Estimated annual household expenditures in retirement (8 x) Date: May 2015 30 85% Projecting Retirement Income and Investment Needs 11. Estimated Income in Retirement E. Sodal Security, annual income F. Company employer pension plans, annual amounts G. Other sources, annual amounts 50.00 H. Total annual income ( EF) 1. Additional required income, or annual shortfall ( DH) Projecting Retirement Income and Investment Needs III. Inflation Factor J. Expected average annual inflation rate over the period to retirement 6% K. Inflation factor (a) Years to retirement (A) (b) Average annual inflation rate (1) 6% L. Size of inflation-adjusted annual shortfall 30 Projecting Retirement Income and Investment Needs IV. Funding the Shortfall M. Anticipated return on assets held after retirement 89 N. Amount of retirement fund required (your nest egg) 0. Expected rate of return on investments prior to retirement 5% P. Compound interest factor (a) Years to retirement (A) 30 (b) Expected rate of return on investments prior to retirement (0) 596 Q. Annual savings required to fund retirement nest ego (N+P) Estimating Future Retirement Needs Carlos and Ankti know that you are completing a personal finance course and that you understand how to complete a Projecting Retirement Income and Investment Needs worksheet. They have gathered the following information for you: . . Carlos will have worked at Proctor & Gamble for his entire career and will have an annual pension amount of $16,875. Ankti will have worked at Apple Computer for her entire career and will have an annual pension amount of $12,500. Beth Carlos and Ankti are 35 years old and plan to retire when they reach age 65. Their estimated level of annual current household expenditures is $67,500. They estimate that they will need 85% in retirement. They will receive $1,556 per month of Social Security income and no other sources of income (except pension) They talked with friends and believe that is a realistic rate of return on their investments once they retire Based on their internet research, they will use as the average annual inflation rate for retirement calculations. After contacting theilsavings and loan, they found out a savings account is currently paying 5% . Complete the following sections of the worksheet. Note: 1) Every field must have a value (if your answer is zero, type "0"); 2) some values are repeated; and 3) round the average annual inflation rate and the expected rate of return on investments pnor to retirement to three decimal places, and round everything else to two decimal places (or the nearest whole number if it does not let you enter decimals). Projecting Retirement Income and Investment Needs Name(s): Carlos and Ankel 1. Estimated Household Expenditures in Retirement A. Approximate number of years to retirement B. Current level of annual household expenditures, excluding savings C. Estimated household expenses in retirement as a percentage of current expenses D. Estimated annual household expenditures in retirement (8 x) Date: May 2015 30 85% Projecting Retirement Income and Investment Needs 11. Estimated Income in Retirement E. Sodal Security, annual income F. Company employer pension plans, annual amounts G. Other sources, annual amounts 50.00 H. Total annual income ( EF) 1. Additional required income, or annual shortfall ( DH) Projecting Retirement Income and Investment Needs III. Inflation Factor J. Expected average annual inflation rate over the period to retirement 6% K. Inflation factor (a) Years to retirement (A) (b) Average annual inflation rate (1) 6% L. Size of inflation-adjusted annual shortfall 30 Projecting Retirement Income and Investment Needs IV. Funding the Shortfall M. Anticipated return on assets held after retirement 89 N. Amount of retirement fund required (your nest egg) 0. Expected rate of return on investments prior to retirement 5% P. Compound interest factor (a) Years to retirement (A) 30 (b) Expected rate of return on investments prior to retirement (0) 596 Q. Annual savings required to fund retirement nest ego (N+P)