Question: a simulation in Excel You simulation will need to determine the likelihood of running out of money in retirement for different withdrawal rates. Please see

a simulation in Excel

You simulation will need to determine the likelihood of running out of money in retirement for different withdrawal rates.

Please see the presentation for additional guidance

You need to model a retirement portfolio over a 30 year time horizon from age 65 to 95. You need to consider the effect of the withdrawal rate on the likelihood of running out of money before age 95.

Once you determine a withdrawal rate (%), consider how much money you need to start with to have the dollar amount of withdrawals you would like to have. Once you have completed this, use the simulation spreadsheet I created (you can access after completing the learning objective survery) to determine how much of your income you should save for retirement if you start at age 25 and retire at age 65. The withdrawal rate needs to be defined as a percentage of your beginning balance since you will presumably need to maintain a certain standard of living.

You may ignore taxes and inflation for all these calculations but know that in real life we cannot!

Simulation models are important, and I hope you will allow me the indulgence of a non accounting topic for this assignment... knowing that accountants also retire (so do college professors)

report on your findings, including the sensitivity analysis for withdrawal rates, as well as explanations of how you calculated how much money you need, and how much you need to save to get to that amount. Include the amount of risk you are willing to accept.

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Savings Does trial reach 2million
Iteration $1,276,909 yes = 1 average $1,603,656
Age 25 1 $1,390,758 0 % reaching 2 million 27.00%
Current Salary $50,000 2 $1,882,412 0 Median $1,758,672
Current Portfolio $10,000 3 $1,450,122 0 Minimum $878,061
Annual Investment Rate 12.00% 4 $1,697,318 0 Maximum $3,480,910
Salary Growth Rate 5.00% 5 $1,502,875 0
Portfolio Growth Rate 7.00% 6 $1,620,547 0
Portfolio Standard Dev 5.00% Random uniform Random Normal 7 $1,606,464 0
Year Beginning Balance Salary New Investment Earnings Ending Balance Age Sal. Growth Portf. Growth 8 $2,102,905 1
1 $10,000 $50,000 $6,000 $500.78 $16,501 26 3.83% 5.01% 9 $2,157,561 1
2 $16,501 $51,456 $6,175 $434.17 $23,110 27 2.91% 2.63% 10 $1,822,628 0
3 $23,110 $52,584 $6,310 $2,073.30 $31,493 28 2.19% 8.97% 11 $1,816,166 0
4 $31,493 $54,722 $6,567 -$208.99 $37,851 29 4.07% -0.66% 12 $1,899,884 0
5 $37,851 $56,641 $6,797 $1,774.71 $46,422 30 3.51% 4.69% 13 $1,424,274 0
6 $46,422 $57,267 $6,872 $4,004.42 $57,299 31 1.11% 8.63% 14 $1,441,281 0
7 $57,299 $59,745 $7,169 $4,728.50 $69,197 32 4.33% 8.25% 15 $1,820,175 0
8 $69,197 $62,489 $7,499 $5,932.99 $82,628 33 4.59% 8.57% 16 $1,504,215 0
9 $82,628 $63,305 $7,597 $5,087.72 $95,313 34 1.31% 6.16% 17 $1,933,921 0
10 $95,313 $65,490 $7,859 $19,605.67 $122,777 35 3.45% 20.57% 18 $1,333,519 0
11 $122,777 $67,338 $8,081 $7,752.88 $138,611 36 2.82% 6.31% 19 $1,902,573 0
12 $138,611 $68,837 $8,260 $20,416.10 $167,287 37 2.23% 14.73% 20 $1,340,922 0
13 $167,287 $69,847 $8,382 $10,383.69 $186,053 38 1.47% 6.21% 21 $1,428,301 0
14 $186,053 $71,250 $8,550 -$677.42 $193,925 39 2.01% -0.36% 22 $1,111,234 0
15 $193,925 $74,072 $8,889 $26,861.93 $229,676 40 3.96% 13.85% 23 $2,046,194 1
16 $229,676 $75,393 $9,047 -$5,762.25 $232,961 41 1.78% -2.51% 24 $1,739,624 0
17 $232,961 $77,921 $9,351 -$5,662.26 $236,649 42 3.35% -2.43% 25 $2,115,791 1
18 $236,649 $81,199 $9,744 -$1,517.94 $244,875 43 4.21% -0.64% 26 $1,658,812 0
19 $244,875 $82,896 $9,948 $4,353.10 $259,175 44 2.09% 1.78% 27 $2,017,637 1
20 $259,175 $86,525 $10,383 $19,422.07 $288,980 45 4.38% 7.49% 28 $1,824,783 0
21 $288,980 $90,054 $10,806 $29,699.58 $329,486 46 4.08% 10.28% 29 $1,759,730 0
22 $329,486 $90,547 $10,866 $32,671.77 $373,024 47 0.55% 9.92% 30 $1,855,142 0
23 $373,024 $93,716 $11,246 $17,345.98 $401,616 48 3.50% 4.65% 31 $1,729,952 0
24 $401,616 $97,386 $11,686 $22,601.08 $435,903 49 3.92% 5.63% 32 $1,497,492 0
25 $435,903 $97,853 $11,742 $48,739.56 $496,385 50 0.48% 11.18% 33 $2,015,109 1
26 $496,385 $102,007 $12,241 $7,415.87 $516,042 51 4.25% 1.49% 34 $1,427,471 0
27 $516,042 $102,827 $12,339 $55,626.59 $584,008 52 0.80% 10.78% 35 $2,365,460 1
28 $584,008 $105,392 $12,647 $47,130.16 $643,785 53 2.49% 8.07% 36 $1,701,083 0
29 $643,785 $110,200 $13,224 $39,099.52 $696,108 54 4.56% 6.07% 37 $1,697,429 0
30 $696,108 $112,675 $13,521 $81,780.34 $791,410 55 2.25% 11.75% 38 $1,802,801 0
31 $791,410 $114,154 $13,698 -$2,674.68 $802,434 56 1.31% -0.34% 39 $1,662,871 0
32 $802,434 $114,512 $13,741 -$11,775.22 $804,400 57 0.31% -1.47% 40 $1,768,447 0
33 $804,400 $116,052 $13,926 -$5,553.98 $812,772 58 1.34% -0.69% 41 $1,867,106 0
34 $812,772 $118,731 $14,248 $7,237.90 $834,258 59 2.31% 0.89% 42 $1,782,115 0
35 $834,258 $121,538 $14,585 $44,012.23 $892,854 60 2.36% 5.28% 43 $2,167,976 1
36 $892,854 $125,764 $15,092 $53,596.05 $961,542 61 3.48% 6.00% 44 $2,200,160 1
37 $961,542 $129,956 $15,595 $84,450.14 $1,061,587 62 3.33% 8.78% 45 $1,461,108 0
38 $1,061,587 $134,643 $16,157 $71,354.38 $1,149,099 63 3.61% 6.72% 46 $1,531,949 0
39 $1,149,099 $139,821 $16,779 $133,166.24 $1,299,043 64 3.85% 11.59% 47 $1,527,371 0
40 $1,299,043 $141,314 $16,958 $74,757.41 $1,390,758 65 1.07% 5.75% 48 $2,143,655 1
49 $1,805,337 0
50 $1,837,530 0
51 $1,538,997 0
52 $2,180,142 1
53 $2,667,996 1
54 $1,580,081 0
55 $1,851,417 0
56 $1,593,957 0
57 $1,500,685 0
58 $2,197,561 1
59 $2,600,504 1
60 $1,939,195 0
61 $1,972,904 0
62 $2,160,221 1
63 $2,048,018 1
64 $1,519,316 0
65 $2,072,587 1
66 $1,660,895 0
67 $1,852,664 0
68 $2,994,672 1
69 $2,163,099 1
70 $1,652,665 0
71 $2,134,828 1
72 $2,083,774 1
73 $1,810,419 0
74 $1,632,829 0
75 $2,239,080 1
76 $2,333,770 1
77 $1,859,258 0
78 $1,712,314 0
79 $1,329,756 0
80 $2,365,040 1
81 $1,752,790 0
82 $2,154,767 1
83 $1,744,025 0
84 $1,539,188 0
85 $1,712,368 0
86 $1,870,133 0
87 $2,610,046 1
88 $1,837,448 0
89 $2,204,336 1
90 $1,480,226 0
91 $2,431,165 1
92 $1,448,202 0
93 $2,081,011 1
94 $1,306,539 0
95 $1,813,138 0
96 $1,501,983 0
97 $1,621,089 0
98 $1,402,288 0
99 $2,426,228 1
100 $1,552,093 0
101 $1,656,440 0
102 $2,066,709 1
103 $1,257,543 0
104 $2,404,597 1
105 $3,156,110 1
106 $1,411,223 0
107 $2,070,354 1
108 $2,110,654 1
109 $1,330,296 0
110 $1,785,252 0
111 $2,054,553 1
112 $1,199,276 0
113 $1,954,399 0
114 $2,422,345 1
115 $1,392,442 0
116 $1,126,523 0
117 $1,938,264 0
118 $948,234 0
119 $2,307,063 1
120 $2,213,610 1
121 $1,815,892 0
122 $1,715,739 0
123 $2,307,413 1
124 $2,189,262 1
125 $1,586,136 0
126 $2,186,865 1
127 $1,026,468 0
128 $1,640,230 0
129 $1,910,378 0
130 $2,222,180 1
131 $1,521,288 0
132 $1,946,356 0
133 $1,423,620 0
134 $1,697,452 0
135 $1,475,195 0
136 $1,537,766 0
137 $1,730,964 0
138 $1,566,257 0
139 $1,965,672 0
140 $1,390,106 0
141 $1,525,099 0
142 $1,537,826 0
143 $1,936,227 0
144 $2,762,562 1
145 $2,318,519 1
146 $1,824,190 0
147 $1,833,620 0
148 $1,498,712 0
149 $1,649,446 0
150 $1,694,538 0
151 $2,115,318 1
152 $2,029,698 1
153 $1,945,605 0
154 $1,456,341 0
155 $1,685,454 0
156 $1,928,085 0
157 $1,661,475 0
158 $1,528,453 0
159 $1,621,411 0
160 $1,549,800 0
161 $1,499,085 0
162 $1,889,936 0
163 $1,702,277 0
164 $1,424,389 0
165 $2,709,541 1
166 $1,881,385 0
167 $1,957,413 0
168 $2,028,316 1
169 $2,236,788 1
170 $2,367,130 1
171 $1,358,472 0
172 $1,164,920 0
173 $2,514,772 1
174 $1,732,146 0
175 $1,021,736 0
176 $2,333,624 1
177 $1,683,541 0
178 $1,445,828 0
179 $1,566,785 0
180 $2,333,887 1
181 $1,934,998 0
182 $1,914,248 0
183 $1,491,426 0
184 $1,867,534 0
185 $1,408,645 0
186 $1,571,094 0
187 $1,783,751 0
188 $1,174,243 0
189 $1,356,583 0
190 $2,090,666 1
191 $3,159,452 1
192 $1,434,619 0
193 $1,744,072 0
194 $2,027,233 1
195 $1,263,967 0
196 $2,723,027 1
197 $1,461,564 0
198 $2,125,001 1
199 $2,061,816 1
200 $1,783,004 0
201 $2,173,016 1
202 $2,196,774 1
203 $1,820,475 0
204 $1,930,916 0
205 $1,891,512 0
206 $1,897,332 0
207 $1,321,745 0
208 $2,018,371 1
209 $2,192,840 1
210 $1,829,878 0
211 $1,577,775 0
212 $1,404,592 0
213 $1,524,205 0
214 $1,778,161 0
215 $1,299,214 0
216 $2,091,382 1
217 $1,968,189 0
218 $1,469,126 0
219 $2,038,829 1
220 $2,075,658 1
221 $1,703,029 0
222 $1,550,774 0
223 $1,407,735 0
224 $1,400,242 0
225 $1,825,815 0
226 $2,658,314 1
227 $1,528,159 0
228 $1,905,336 0
229 $1,480,961 0
230 $1,449,799 0
231 $2,512,178 1
232 $1,993,998 0
233 $2,243,119 1
234 $2,077,970 1
235 $1,555,217 0
236 $1,783,452 0
237 $1,747,990 0
238 $1,472,427 0
239 $1,194,864 0
240 $1,728,194 0
241 $1,992,895 0
242 $2,546,716 1
243 $1,512,356 0
244 $1,014,740 0
245 $1,891,721 0
246 $1,804,628 0
247 $1,545,075 0
248 $2,785,921 1
249 $1,870,436 0
250 $2,037,943 1
251 $1,746,829 0
252 $1,559,461 0
253 $3,480,910 1
254 $2,089,670 1
255 $1,888,943 0
256 $1,940,239 0
257 $1,385,992 0
258 $1,494,429 0
259 $1,953,739 0
260 $2,794,089 1
261 $1,615,571 0
262 $1,522,830 0
263 $1,814,510 0
264 $2,287,544 1
265 $2,337,949 1
266 $2,102,455 1
267 $1,405,105 0
268 $1,543,173 0
269 $1,793,887 0
270 $1,413,758 0
271 $1,553,976 0
272 $1,598,285 0
273 $2,030,131 1
274 $1,561,216 0
275 $2,028,950 1
276 $2,058,355 1
277 $1,355,489 0
278 $898,926 0
279 $1,904,557 0
280 $1,292,624 0
281 $1,484,049 0
282 $1,132,394 0
283 $1,474,337 0
284 $2,155,881 1
285 $2,462,969 1
286 $1,809,741 0
287 $1,620,064 0
288 $2,110,008 1
289 $1,819,360 0
290 $2,050,631 1
291 $2,082,969 1
292 $2,494,891 1
293 $1,225,949 0
294 $2,269,897 1
295 $1,389,441 0
296 $1,419,547 0
297 $1,406,680 0
298 $1,434,449 0
299 $1,848,886 0
300 $1,892,683 0
301 $1,561,345 0
302 $1,842,386 0
303 $1,382,187 0
304 $1,845,662 0
305 $1,598,230 0
306 $1,693,487 0
307 $1,545,288 0
308 $1,761,476 0
309 $1,834,640 0
310 $1,936,538 0
311 $1,524,318 0
312 $1,903,243 0
313 $1,982,752 0
314 $1,585,658 0
315 $1,641,953 0
316 $1,782,439 0
317 $2,288,406 1
318 $1,668,379 0
319 $1,827,559 0
320 $1,207,406 0
321 $1,453,609 0
322 $1,541,018 0
323 $1,692,942 0
324 $2,201,901 1
325 $1,667,615 0
326 $1,401,339 0
327 $1,638,849 0
328 $1,246,610 0
329 $1,815,905 0
330 $1,744,681 0
331 $1,522,460 0
332 $1,208,980 0
333 $1,564,356 0
334 $1,432,872 0
335 $1,625,203 0
336 $1,890,414 0
337 $1,177,234 0
338 $1,626,748 0
339 $1,609,416 0
340 $2,370,443 1
341 $2,110,804 1
342 $2,300,237 1
343 $1,367,120 0
344 $1,388,222 0
345 $1,979,422 0
346 $1,437,094 0
347 $1,620,670 0
348 $2,057,421 1
349 $1,715,051 0