Nicci Denny, age 40, single, and from Colorado Springs, Colorado, is trying to e

Question

Nicci Denny, age 40, single, and from Colorado Springs, Colorado, is trying to estimate the amount she needs to save annually to meet her retirement needs. Nicci currently earns $65,000 per year. She expects to need 80 percent of her current salary to live on at retirement. Nicci anticipates receiving about $1900 per month in Social Security benefits at age 65.

Using the Run the Numbers worksheet on page 528, answer the following questions.

(g) How much additional money will she still need to save for retirement?

(h) What is the amount she needs to save each year to reach this goal?

RUN THE NUMBERS Estimating Your Retirement Savings Goal in Today's Dollars per year assuming a spending lifestyle at 80 percent of current income ($80,000 x 0.80), and will live an additional to be 3 percent after inflation-a reasonable but conser- would differ if the growth rate of the investments were less This worksheet will help you calculate the amount you need 20 years beyond retirement. Investment returns are assumed to set aside each year in today's dollars so that you will have adequate funds for your retirement. The example here vative estimate for a typical portfolio. The financial needs assumes that a single person is now 35 years old, hopes to retire at age 62, has a current income of $80,000, currently han 3 percent. This approach simplifies the calculations and saves and invests about $4,800 per year to an IRA account, puts the numbers to estimate retirement needs into today's contributes zero to an employer-sponsored retirement plan, anticipates needing a retirement income of $64,000 inflation occurs dollars. The amount saved must be higher if substantial

Explanation / Answer

Answer: -

'Run the Number' Exercise: -

Answer-g:-

The answer is of point 12 of above exercise presently from above calculation we got $10671.

Answer-h:-

The answer is of point 10 of above exercise presently from above calculation we got $10671.

Please note above exercise was done with figures taken from checklist as Appendix A-1, A-2, A-3 information is not provided, hence the Answer-G and Answer-H would differ.

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