Your team will develop an individual ‘life' financial plan using the excel spreadsheet template provided in the Project D2L folder. Note: you are doing this work as a team, however, the spreadsheet is for an individual. You only hand in 1 spreadsheet for your group. (I would recommend that each of you create your own spreadsheet with your respective data for you to use in the future). You are to fill in (and add rows and columns as needed) the information for both your personal income statement and your personal balance sheet. You will need to add the respective formulas in the spreadsheet, so that the income statement and balance sheet are accurate and "tie" together. For example, your school loans (if you have them or expect them) would go into your liabilities and then you'd have lines in recurring expenses on your income statement as you pay off the loan. Input your expected salaries, costs, deductions, investments, etc. and summarize your assumptions in a clear manner so the logic can be easily understood. You will decide what your expected salary increases will be, when you will buy a house, what the house will cost, how much money you will plan to save in your retirement account vs. your regular savings account and when you will make major purchases. Research median salary data for your expected career and median home prices and/or rent prices in the area you plan to live. You will need to provide an amortization table for any loans that you incur (such as home mortgage and or car payments. You could do this in a separate worksheet in your spreadsheet).
You will also need to determine your income tax rate for each year. This can be found using the current US federal income tax brackets. You will need to research how these work and apply the correct formula in your spreadsheet. For simplicity, state income tax can be ignored.
You are expected to enter the appropriate formulas into the spreadsheet (linking your income statement and balance sheet appropriately) so that you will have a picture of your budget, your growing net worth, and your retirement portfolio. Also, some line items are missing on the spreadsheet and you will need to add them to make your spreadsheet complete and accurate.
Develop a plan that will generate an adequate amount of money to retire at age 55 (if you are currently in your early twenties. If you are older, then you may provide an appropriate retirement age). Complete the analysis out to age 95 to ensure that you will have adequate resources to provide for your entire life. Research what average rate of return can reasonably be expected in your 401k and other investments. Interest is compounded monthly. Assume that you receive NO social security benefits in later years (therefore, your investments have to provide all your required income in your retirement years). Again....clearly show your assumptions and explain your logic in the spreadsheet