Ch $14$: Assignment $-$ Planning for Retirement

$2.$ Projecting retirement income and the investment needs worksheet

Estimating Future Retirement Needs

Li and Courtney know that you are completing a personal finance course and that you understand how to complete a Projecting Retirement Income and Investment Needs worksheet. They have gathered the following information for you:

Both Li and Courtney are $30$ years old and plan to retire when they reach age $65.$

Their estimated level of annual current household expenditures is $$67,500.$ They estimate that they will need $80\%$ in retirement.

They will receive $$1,556$ per month of Social Security income and no other sources of income $($except pension$).$

They talked with friends and believe that $8\%$ is a realistic rate of return on their investments once they retire.

Li will have worked at Target for his entire career and will have an annual pension amount of $$15,625.$

Courtney will have worked at General Electric for her entire career and will have an annual pension amount of $$13,000.$

Based on their Internet research, they will use $6\%$ as the average annual inflation rate for retirement calculations.

After contacting their savings and loan, they found out a savings account is currently paying $5\%.$

Use the following tables to identify the necessary future value interest factors.

Interest Factors$-$Future Value

Interest Factors$-$Future Value of an Annuity

$\backslash$table$[[$Periods$,3\mathrm{.}00\%,5\mathrm{.}00\%,6\mathrm{.}00\%,8\mathrm{.}00\%,9\mathrm{.}00\%$