Retirement Planning Worksheet
Complete Parts I and II of the Retirement Planning Worksheet.
Part I: Retirement Planning
1. Estimate your retirement income
You will be asked to answer six questions. If you are unsure of what the fields are, the definitions are below on the same page. There are some assumptions about how much your investments will earn, inflation rates and tax rate; you can edit these to see how they impact the calculation.
• Based on your inputs, what is your estimated monthly retirement income before tax/inflation?
• Based on your inputs, what is your estimated monthly retirement income after tax/inflation?
2. Determine how your current retirement strategy will provide for retirement income
You will be asked to answer eight questions. If you are unsure of what the fields are, the definitions are below on the same page. There are some assumptions about how much your investments will earn, inflation rates, and if Social Security income is considered; you can edit these to see how they impact the calculation.
• Based on your inputs, how much will you have saved using your current strategy? At what age are your savings expected to run out?
• Assume your savings will not be sufficient to cover your living expenses. In at least 100 words, what steps can you take now and/or in retirement to live comfortably in retirement?
3. Forecast when you could become a millionaire
You will be asked to answer four questions. If you are unsure of what the fields are, the definitions are below on the same page.
• How long will it take you to reach $1 million in savings?
• Thinking of what your life might be like in retirement, would $1 million be sufficient to support yourself? (Some things to consider would be your health, where you live, and how much money you owe.) In at least 100 words explain why or why not?
4. Define the differences between a 401K and Roth IRA in at least 50 words.
5. Determine whether a Roth IRA or traditional IRA will lead to higher earnings. Input your current age, estimated age at retirement, annual salary, and annual IRA contribution you expect to make in this calculator .
• Provide a summary of the results. Would a Roth IRA or traditional IRA lead to higher earnings based on your inputs?
• Change the inputs in the calculator to see different scenarios. Provide one scenario/combination of inputs in which the Roth IRA leads to higher earnings than a traditional IRA, and summarize the main reason provided in the report for why this is so.
Then, provide one scenario/combination of inputs in which the traditional IRA leads to higher earnings than a Roth IRA, and summarize the main reason provided in the report for why this is so. Response should be at least 50 words.
Part II: Note to Self
After reviewing the information provided above, write a brief, summative "Note to Self" regarding how you should plan for your future retirement. How will you use what you have learned in this course to plan ahead, and how will the answers you entered above factor in? Responses should be between 260 to 350 words.