You have decided to start saving for retirement and want to build a model that will help you plan. Until you retire, you intend deposit at the end of each year a certain percentage of your salary into your retirement savings account.

During the years prior to retirement, your retirement investment account is expected to generate a $9\%$ rate of return. During retirement, you plan to withdraw money at the beginning of each year, and your retirement account will still receive an investment return but, as you intend to shift to a lower risk portfolio, it is expected to be $5\%.$

$$ Your current age is $25$ years. You expect to live up to the average life span of $85$ years.

$$ You expect that your gross salary when you retire will be $$120,000$ per year, taxed at a $30\%$ tax rate $($for this assignment, you assume personal income and capital gains are taxed at the same rate$).$ You have recently read a study that has made you decide that when you retire you want to be able to live on $50\%-70\%$ of your pre$-$retirement after$-$tax income $($determined from the year you retire.

$$ You have $$10,000$ saved up to make an initial investment today into your retirement investment account.

Excercise $1.$

Create a spreadsheet model that will assist you in your retirement planning. What should the objective of the retirement plan be and what are the decisions that need to be made? These should be clearly incorporated into your spreadsheet model.

Exercise $2.$

Using the spreadsheet model for financial planning developed in Problem $1$ above report in a separate one page $$MS word$$ submission:

$1.$ At the end of the $5$th year from today, what will be the balance in your retirement investment account?

$2.$ Create a table and graph to show how the value of your retirement account changes in both the pre$-$ and post$-$ retirement years.