Bob's Retirement plan Presentation

1. Bob’s Retirement Plan
Prepared by: Fahad Ahsan
Presented by: Erica Robertson
TRU Financials

2. Assumptions and Data
Value of Retirement Fund
Earning
Growth
Rate%
%
College
Invests
Bob’s
Investments
Bob’s
Salary
Age At
Retirement
• Number of Persons
• Simple Interest
• Tax and Inflation
• Yearly interest
• Withdrawals

3. The Model
Data Base case Worst case Variable Age
Retirement age 67 65 65-77
Income Growth Rate 5% 0 0
Postretirement Income (% of his
final salary) 60% 60% 60%
Rate of return on Investments
/year up to retirement = 8% 3% 3%
Rate of return on Investments
/year after retirement = 5% 3% 2.5%
Bob's Current Retirement Fund $150,000 $150,000 $150,000
College % Invested 10% 10% 10%
Current Salary $100,000 $100,000 $100,000
Bob's Annual Contribution $9,500 $9,500 $9,500

4. Model Results
50
60
70
80
90
100
110
5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60%
AgeBobrunsoutof$
%'age of Post Retirement Income
Age Bob runs out of $ - %'age of Post
Retirement Income
50
55
60
65
70
75
80
85
500
1,500
2,500
3,500
4,500
5,500
6,500
7,500
8,500
9,500
10,500
11,500
12,500
13,500
14,500
AgeBobrunsoutof$
Amount of Bob's Annual contribution
Age Bob runs out of $- Amount of
Bob's Annual contribution
50
55
60
65
70
75
80
85
90
51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70
AgeBobrunsoutof$
Retirement Age
Age Bob runs out of $ - Retirement Age

5. Sensitivity
83.00 85.00 87.00 89.00 91.00 93.00 95.00 97.00 99.00 101.00
Rate of return on Investments /year up to retirement =
Postretirement Income (% of his final salary)
Savings Rate
College % Invested
Bob's Annual Contribution
Retirement age
Rate of return on Investments /year after retirement =
Age at death
Age when wife dies
Age at Which Bob Runs out of $
Parameter
Tornado Sensitivity Chart
-10 Pct +10 Pct

6. Summary And Recommendations
• Put off retirement as long as possible
• Better Interest rates
• Tweak percentage of income needed after
retirement
Thank You