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### Bob's retirement strategy

1. Bob Smith’s Strategy to Retirement Riches September 28th, 2013
2. In order to assess the adequacy of your fund, I made the following assumptions to help me build an effective model :  You will be the only one drawing from the pension fund when you retire  The current fund value is assuming all interest payments have be accounted for.  No inflation  Your postretirement income is inclusive of tax, and it is 60% of your income today. Our major assumption was that Bob’s ultimate goal was to find out at what reasonable retirement age he would realize the highest value of his retirement fund.
3. CONTROLLABLE DATA FIXED DATA UNCERTAIN DATA Retirment age Current age Age at Death Postretirement Income Current Salary Age of Wifes Death Your contribution Bob's current retirement fun Rate of increase of income Current salary Return on investment up to retirement Return on investment after retirment College invested Step 1 UNCERTAIN DATA THAT INFLUENCE FUND VALUE Rate of increase of income 0% Return on investment up to retirement 2.5% Return on investment after retirement 2.5% WORST CASE SCENARIO PARAMETERS–Holding all controllable data constant:
4. BASE CASE Post Retirement income \$124,736 Age run out of money 78  Retirement age: Every additional year you work over 65, you increase the year you run out of money by 1 year and 10 months  Personal Portion: For every additional \$500 you contribute every year, you increase the year you run out of money by 5 months  Postretirement income: For every 5% increase in your postretirement income, the year you run out of money decreases by 2 years and 2 months
5. 83.00 85.00 87.00 89.00 91.00 93.00 95.00 97.00 99.00101.00 Rate of return on Investments /year up to retirement = Savings Rate Bob's Annual Contribution Rate of return on Investments /year after retirement = Age when wife dies Age at Which Bob Runs out of \$ Parameter Tornado Sensitivity Chart -10 Pct +10 Pct
6.  Retire no earlier than 65 it will make your fund last longer  Contribute no less than \$9500  Your post retirement income should reflect the bare minimum you need to survive.
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