From your Logos work, you have already determined an estimate of how much you will cost each month when you begin your career. ( Career in physician assistant). You also have determined an estimate of how much you will earn each year as a physician assistant. At first glance, it appears that you have all you need to know in order to determine whether or not your monthly salary will pay for all of your monthly bills. But wait...there is more!

Document I. You probably have not figured out two very important pieces to this financial puzzle. Those are taxes and saving for retirement. All are parts of this assignment. Use the tax calculation form to guide you as you estimate your annual and monthly tax amounts. Use the retirement calculation to determine how much you want to save for retirement. Calculate the monthly balance to see if you have extra money each month or if will have a negative balance. Complete the calculations and submit a document that tallies all of the costs and compares them to your monthly take home pay. This can be done using Excel. All parts need to be completed and shown. Use the following as an example:

Part A. List your expected bills and tally them at the end.

Bill #1 - House rent roughly around $4000___

Bill #2 - Auto loan $554 per m onth___

Bill #3 - Utility $400___

Bill #4 - Insurance - $200

Sum = Monthly bill total ___

Part B. List your additional monthly costs and tally them at the end.

Monthly taxes ___

Monthly retirement contribution ___

Sum = Additional monthly costs _______

Part C. Add all of your costs together.

Sum A & B above = Monthly total cost ___

Part D. Determine whether or not you will be able to afford you by finding your monthly balance.

Monthly gross income ___

Minus monthly total cost ___

= Monthly balance ___

With these values determined, you will then need to one-page reflection of:

1. what you learned in this process,
2. what changes you think you might need to make in your future for you to be able to afford you, and
3. what additional costs do you think you will have to incur as your life changes.

Deductions

FICA (Federal Insurance Contributions Act) is taken directly from paychecks. It consists of Social Security and Medicare Taxes. Expect these amounts (7.65% combined) to be subtracted from each paycheck along with payroll taxes. This is insurance you pay now so that you receive a small income and can pay for medical bills once you reach 65 years old. The payout is not a lot per month. It will feed you but saving for retirement is a way to ensure you have enough.

Social Security Tax is 6.2% of gross income. Medicare Tax is 1.45% of gross income.

Federal Deduction Amount: Single $12,950.00 This is a small break the government gives

Head of Household Married but Separate Filing Married and Joint Filing

$19,400.00 to taxpayers. Instead of paying taxes on the $12,950.00 full amount of what you earn, a percentage $25,900.00 is deducted so you pay taxes on less.

Retirement

Do you want to retire one day? Retirement plans allow you to save money and then take it out when you are no longer employed so that you have money to pay your bills.

One type of individual retirement account (IRA) is called a Roth IRA. It allows you to save money you put into the account after you receive it from your paycheck. That way the money has been taxed already. The money earned while in the plan is not taxed when you take it out. There are rules, of course but our sample here assumes you are not going to withdraw money from the IRA until you are 62 years old.

Roth IRA $541.66/mo. (maximum allowable monthly contributions = $6,500 /yr.)

Start @ 27 years old Retire @ 62 years old $227,500 invested ($6,500/year x 35 years)

Rate of Return (ROR) Money invested in this way can expect to earn a percentage each year. The added amount also earns money, so the total growth is greater. The percentage earned is typically expected to be between 4 and 8%. The example below shows both of those.

Total 4% ROR = $892,000 8% ROR = $1,540,000

Earned $664,500

$1,312,500

Tax Free 100% 100%