Troy and Kristy Reynolds (both currently age 56 ) have determined that they will require retirement income equal to $93,000 in oday's dollars, based on their current income. They plan to retire in eight years and wish to assume an after-tax return on their nvestments, prior to retirement, of eight percent. They plan to readjust their assets after retirement and believe that their net return will drop to six percent. Troy's parents are both in their late eighties, and Kristy's parents are in their seventies. Troy and Kristy assume that retirement will last for 30 years, and that inflation will average two percent. Assume that both Troy and Kristy will die at age 95, regardless the clients assumption about life expectancy. Use the Annuity model for capital needs calculations Question 1 0.5 pts (1) 0.5 Points - How much income will Troy and Kristy need in their first year of retirement? (omit the dollar sign) (2) 0.5 Points - What is the amount of capital necessary at the start of retirement to support their income needs throughout retirement? (omit the dollar sign in your answer) Question 3 age 67. Their full (combined) benefit is expected to be $30,000 in today's dollars. If the Reynolds decided to factor in Social Security and begin taking Social Security benefits when they retire at age 64, how much personal capital would they need to accumulate at retirement? One of two Approach... 1. Given how much they are going to receive from so security how much will they now need in today's dollars from their investment portfolio and retirement accounts? 2. How much in how much in future $ would they need each year and month beginning at age 64 from their investment portfolio and retirement accounts? 3. How much capital would they need on the first day of retirement to likely provide for the necessary income from investment portfolio and retirement accounts? Note: Assume that SSI will also increase by 2% due to its Cost of Living Auto increases (COLA) (omit dollar sign from your answer) (4) 0.5 Points - If the Reynolds wanted to leave a specific bequest to their favorite charity (Wounded Warrior Project) in the amount of $2 million (actual amount of donation at death), how much additional capital would they need to have accumulated at the time they retire at age 64 ? (omit dollar sign in answer) Question 5 1pts (5) 1 Point - The Reynolds would like to know how much they need to save each year to fund retirement. For purposes of this calculation, assume they have accumulated retirement savings of $162,491, they want to retire at age 64 , they will live until age 95 , and they expect to inherit $1,000,000 at age 64 (just when they are retiring). Social Security benefits are the same as described above. Assume that they will claim SSI as described in question #3 above for this case Answer with the amount of annual savings yet needed (omit dollar sign in answer) (6) 1 Point - The Reynolds modified their thinking and would like to know how much they need to save each year to fund retirement including a few changes. For purposes of this calculation, assume they have retirement savings of $900,000 (from the sale of a few assets), they want to retire at age 62 , they will live until age 95 , and they will plan on not receiving an inheritance. They also believe that they can live off of $86,000 instead of $93,000, annually in today's dollars. Social Security benefits are the same as described above. Assume they claim SSI at age 62 for this problem and that the amount they would receive at age 62 would be $30,000 per year in today's dollars with the same 2% cost-of-living adjustment (COLA) as in question number three. What is the amount of additional annual savings that your client should be committed to in order to reach the amount of capital needed at the point of retirement? (omit dollar sign from answer) Troy and Kristy Reynolds (both currently age 56 ) have determined that they will require retirement income equal to $93,000 in oday's dollars, based on their current income. They plan to retire in eight years and wish to assume an after-tax return on their nvestments, prior to retirement, of eight percent. They plan to readjust their assets after retirement and believe that their net return will drop to six percent. Troy's parents are both in their late eighties, and Kristy's parents are in their seventies. Troy and Kristy assume that retirement will last for 30 years, and that inflation will average two percent. Assume that both Troy and Kristy will die at age 95, regardless the clients assumption about life expectancy. Use the Annuity model for capital needs calculations Question 1 0.5 pts (1) 0.5 Points - How much income will Troy and Kristy need in their first year of retirement? (omit the dollar sign) (2) 0.5 Points - What is the amount of capital necessary at the start of retirement to support their income needs throughout retirement? (omit the dollar sign in your answer) Question 3 age 67. Their full (combined) benefit is expected to be $30,000 in today's dollars. If the Reynolds decided to factor in Social Security and begin taking Social Security benefits when they retire at age 64, how much personal capital would they need to accumulate at retirement? One of two Approach... 1. Given how much they are going to receive from so security how much will they now need in today's dollars from their investment portfolio and retirement accounts? 2. How much in how much in future $ would they need each year and month beginning at age 64 from their investment portfolio and retirement accounts? 3. How much capital would they need on the first day of retirement to likely provide for the necessary income from investment portfolio and retirement accounts? Note: Assume that SSI will also increase by 2% due to its Cost of Living Auto increases (COLA) (omit dollar sign from your answer) (4) 0.5 Points - If the Reynolds wanted to leave a specific bequest to their favorite charity (Wounded Warrior Project) in the amount of $2 million (actual amount of donation at death), how much additional capital would they need to have accumulated at the time they retire at age 64 ? (omit dollar sign in answer) Question 5 1pts (5) 1 Point - The Reynolds would like to know how much they need to save each year to fund retirement. For purposes of this calculation, assume they have accumulated retirement savings of $162,491, they want to retire at age 64 , they will live until age 95 , and they expect to inherit $1,000,000 at age 64 (just when they are retiring). Social Security benefits are the same as described above. Assume that they will claim SSI as described in question #3 above for this case Answer with the amount of annual savings yet needed (omit dollar sign in answer) (6) 1 Point - The Reynolds modified their thinking and would like to know how much they need to save each year to fund retirement including a few changes. For purposes of this calculation, assume they have retirement savings of $900,000 (from the sale of a few assets), they want to retire at age 62 , they will live until age 95 , and they will plan on not receiving an inheritance. They also believe that they can live off of $86,000 instead of $93,000, annually in today's dollars. Social Security benefits are the same as described above. Assume they claim SSI at age 62 for this problem and that the amount they would receive at age 62 would be $30,000 per year in today's dollars with the same 2% cost-of-living adjustment (COLA) as in question number three. What is the amount of additional annual savings that your client should be committed to in order to reach the amount of capital needed at the point of retirement? (omit dollar sign from answer)