You are doing some retirement planning to make sure you have sufficient funds for retirement. You plan to retire in $15$ years. You have already saved $$250,000$ toward retirement. Presently, you are making $$100,000$ per year and contributing $10\%$ of your salary to retirement. You estimate that you will receive annual salary adjustments of $2\mathrm{.}5\%$ over the next $15$ years and will be able to generate an $8\%$ annual return on your investments. You feel relieved because according to your estimates, you will have over $$1,100,000$ at the time you retire.

But you are wondering about the impact of uncertainty on your retirement plans. While on average your raises have been $2\mathrm{.}5\%,$ they have been as low as $0\%$ some years and as high as $5\%$ other years. While average returns on your investments have been $8\%,$ they have a lot of uncertainty with a standard deviation of $4\%.$

Using the spreadsheet model as a template, build a simulation model to help investigate the impact of uncertainty on your retirement. Assume your annual salary adjustments are uniformly distributed between $0\%$ and $5\%,$ and that returns are normally distributed with a mean of $8\%$ and standard deviation of $4\%.$

To satisfy this part of the project, you will:

$$ Create an Excel workbook with a simulation of your retirement income

$$ Answer questions related to the baseline assumptions in the scenario

$$ Modify your Excel workbook to incorporate decision variables and then submit that modified workbook to your instructor

$$ Answer additional questions based on manipulating the decision variables you have included in your workbook