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FCS 340 – Retirement Analysis
For this assignment, you will be using the information and formulas described in the chapter to personally
address each of the 6 questions posed in the chapter as things to consider when thinking about retirement.
NOTE: Please answer the questions in this assignment based on your age and situation. Question 1: If you are a traditional age student (18-25), what can you do now to begin
to be prepared financially for retirement? If you are not a traditional age student (25+), what are you doing now to prepare for retirement
? I am 67 years of age and retired. I did have a 401k. I now live
with my youngest son and pay the utilities and groceries. I recently have gone back to work, to help pay for the expenses of our animals and to help pay off credit cards.
Question 2: For how many years will you and your spouse need retirement income?
If you are not
married, you can just plan for yourself.
Target retirement year for you: 75
Projected Death Year (use the Longevity game discussed in the chapter, or use family history to project this date)
You: Saturday, 11th March 2028
Use these numbers and the formula discussed in the reading to determine how many years you need to plan for retirement. 4
Question 3: How much income will you need per month during retirement?
Take into consideration the cost of living. Go to this Cost of Living Index
and compare the cost of living in
2 different states (or other location) you would consider living in during retirement
. If you are already retired, compare the state where you are now living and another state of your choice.
Report your findings below:
State #1: Ohio
Cost Index: 94
Cost Rank: 32
Grocery: 100.90
Housing: 80.10
Utilities: 97.20
Transportation
: 97.10
Miscellaneous: 100.10
State #2: Washington
Cost Index: 115.10
Cost Rank: 9
Grocery: 109.70
Housing: 129.40
Utilities: 92.20
Transportation: 117.10
Miscellaneous: 110.80
BYU-Idaho
1
FCS 340
Which State would you choose and why? I would prefer Washington, but I would choose Ohio. All
of the costs shown above are cheaper in Ohio with the exception of utilities.
How much money would you like to have available to you each month during retirement? I would
like to have at least $2000.00 a month.
Now that you know how much money you would like to have each month, and you know how many years you are planning for in retirement, calculate how much total money you will need for retirement. (
Number of years in retirement x 12) x Desired monthly income during retirement = Total money needed in retirement 4 x 12 x 2000.00 $96,000.00
Question 4: Beyond retirement investments, what sources of regular income will you have?
Social Security
In order to get an accurate estimate of your personal social security benefits, please go to the Social Security Website
and input your personal information. (It will require you to use your social security number). If you can not obtain your estimated retirement social security benefits, please use the national average of $2,200 at full retirement age. If you plan on deferring your social security benefits until age 70, please use the national average of $2,800
. If you are not a US citizen, this and the following questions in this section will be difficult or impossible to answer. However, you are welcome to respond using information from your country.
That is, are there retirement benefits in your country that you expect to use? If so, please explain.
OR, you may complete these questions using the US National average of $2200 for this assignment.
How much can you expect to receive from Social Security Retirement Benefits? If you have a spouse that is working, how much can they expect to receive from Social Security Retirement Benefits? $1366.00 is what I receive.
Additional Retirement Accounts
How much more per month will you need to have saved through other types of retirement accounts such as 401k, IRA, or ROTH versions of these accounts to meet your desired monthly income? I have already accessed these accounts.
Question 5: Do you want to leave behind an estate behind, or do you want to use up most of your
retirement before you die?
Tell why. I would love to leave an estate, but insurance costs at my age are too expensive. I only have a $25,000.00 life insurance policy.
Question 6: How can you tell if you are on track for retirement saving?
The textbook indicates that Fidelity, one of the largest investment firms, recommends you
have 8 times your salary saved up by the time you retire. If you are 35 years or older, check yourself according to the formula outlined in the book. Are you on track? Unfortunately, if you are under 35 years old, the formulas in the text will not work for you. Go ahead and project your future by pretending you are 35 to respond to this question.
$24,000.00 x 8 = $192,000.00 I am definitely not on track.
Another way to figure how much money you will need in retirement, is determined by:
BYU-Idaho
2
FCS 340
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