You should read the assignment 1 document, then finish it.This assignment should be prepared as a memo.

FIN 311 Summer 2016 Retirement Planning Project Part #1 Due Tuesday, July 19 This is the first of three parts of a retirement planning exercise that gives you an opportunity to employ time value of money principles to prepare for retirement. This assignment should be prepared as a memo and submitted via BbLearn before class time on July 19. Demographics and justifications: Assume you are beginning full time work this year. State the age at which you plan on retiring. How many years do you have to accumulate the dollars necessary to commence retirement? Report the age at which you expect to die and how much money (if any) you want to have upon death to leave to someone or some organization. How many years will you be spending money in retirement? Show these assumptions and their justifications on your spreadsheet. Expected Retirement Spending: (Use a spreadsheet to make this easier) Create an annual expense budget for your needs in your first year of retirement using today's dollars. For example, you may have no mortgage payment due in retirement. Note that if you retire prior to being eligible for Medicare (age 65 under current law), you will also need to budget for medical insurance. There are sources online available to help you find an estimate of this. Recognize that this figure could vary widely based on your future health. Note that it is not necessary to establish a budget that varies from month to month. The focus of this assignment is your annual needs rather than your expected monthly cash flows. Using your estimate of expenses in today's dollars, the number of years before retirement and a rate of inflation assumption of 2.1%, report how much money you expect to spend in your each year of retirement in future dollars. Remember to continue to adjust for inflation to account for the impact of inflation during retirement. Earnings and Savings Behavior: Create an estimate of your future annual earnings in a spreadsheet, reporting the following assumptions: Your actual current retirement savings Average annual salary growth rate The percentage of salary you expect to contribute each year between now and retirement toward work-sponsored retirement accounts (e.g., 401(k)), including the assumed employer contribution percentage. This can vary from year to year if you wish, either increasing or decreasing over time. If you do not use a linear salary growth rate, please bold the figures that use a different assumption. For example, if you give yourself a flat $10,000 raise at age 30 because you predict a promotion that year, bold the salary of the year in which the $10,000 raise applies. If you see yourself leaving the workforce to return to school, bold the reduced student salary you expect during those years. Current Age Expected Retirement Age Expected Annual Inflation Rate Starting Salary Expected Salary Growth Rate Employer contribution (%) Employee contribution (%) Current retirement savings % of final salary required 22 65 0.021 45000 0.04 0.03 0.06 300000 0.75 Age Salary Growth 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 Salary Contributions 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 Withdrawals