You are 30 years old today, starting your new job. Your current salary is $30,000 expected to increase by 5% each year for the next three years, and then to 20% in fourth year and then again increase to 5% from 5th year onwards. In your decision, you plan to work for your current employer for at least 30 years. You plan to retire after 30 years of service. You expect to live until 85. The job offers two choices in retirement planning: a) Choice 1: Join Retirement Pension Plan: you contribute 5% of your salary but do not manage the plan. During your retirement period (age 61 to 85), for every year you have worked your retirement will pay a percentage of the average of last three years salary you earned from the company. The percentage is equal to 1.5 times the number of years of service. You estimate that you will be working for 30 years and then retiring for additional 25 years. Since you will be working for a total of 30 years, your fixed annual retirement payment will be 45% (1.5 x 30 years of service) of your average of the last three years salary. b) Choice 2: Join the Optional Retirement Plan. You are in charge of the plan. You pay. Your contribution is maximum of 5% and the company doubles your contribution. Example: if you contribute 3%, company will contribute 6%. If you contribute a maximum of 5% the company will match by 10%. You expect a return of 8% and you plan to contribute to the maximum 5%. Questions: a) Which choice do you prefer? Why? b) In either choice, what will be your annual receipts in your retirement period of 25 years. c) The receipts you get in each scenario, will that be enough for your life style? Assume current consumption for a family of two is $60,000 and inflation rate is 3%.

Help PLEASE no clue where to start, have to do this in EXCEL