Economic Security – Retirement take a big breath and go SLOW… it just looks overwhelming! Read through it first then tackle a section at a time.
Assignment: (READ THIS CAREFULLY!!) You will earn a grade REDUCTION for not following directions (and this also means for not
following the calculation directions)!!
1. -watch the 4 videos provided
-Read Chapter 10: Economic Well Being (PDF Provided)
CALCULATION SECTION (1,2 & 3)
1.FIRST you need to determine how old you think you will be when you retire? You MUST decide on an age
for this assignment (HINT: right now, you will need to be 67 to collect full Social Security Benefits. Once you
have an age, then RUN a CALCULATION (link–>) https://www.yourmoneypage.com/retire/retirecnt.php ….
HOW MANY DAYS do you have until retirement – (helpful HINT: run the calculator using AGE).. Record the
results! You will need them for the written portion.
2.Now lets see how much you have to save for retirement. Go to the (link–>)
(http://www.calcxml.com/calculators/retirement-calculator) and follow these directions:
a) put in your CURRENT age.. (23)
b) For your salary amount, I want you to use either what you are already in the workforce OR the median salary for
2021 ($50k). The AVERAGE professional salary for 2021 is around $70k, service occupations are averaging $34k
annually. Unfortunately, there is still the glass ceiling and women are making less than men in the same job!
Remember… these figures are medians (in the middle)… so If you think you’ll be making $100k, then use that amount.
If you plan to make $1million a year, then by all means, use that figure
let’s keep going with the calculator…..
c) If you already have any retirement savings, add it…. if not, leave this blank
d) the inflation rate: use 2% for this assignment (right now, inflation is low… which means we are making little interest on investments).
e) input your desired retirement age that you calculated in the above question. (remember, the earlier you retire, the longer your money has to last you!!)…….
f) you’ll have to do some math here… use your Living to 100 age from your previous assignment and SUBTRACT your retirement age to get the figure for Number of Years of Retirement Income….. (example: you want to retire at 67 and you are going to live until 85, then you are going to need to save enough money to support you for 18 years)
( MESSAGE for TUTOR: I DID THIS PART ALREADY, I WAS GIVEN AGE 89)
g) experts suggest between 80 – 100% replacement rate for retirement… I suggest using 80% but you can use 90% if you want to be conservative and don’t like RISK…. (this means that if you are making $200k a year when you retire, you will need $160k (80%) a year in retirement to live the same lifestyle.. think: pay rent/mortgage/property tax, health insurance, taxes, gas, food, utilities, travel, going to the movies, treat for the grandchildren, etc)
h) keep the investment return where it is…
i) and you can leave the Social Security projected benefits question blank!
Save the RESULTS…. Write them down for your paper!!
3.Now let’s think about all the little things that we spend money on… think WANT vs NEED….. did you go to Starbucks today? Do you smoke? Run through the car wash rather than wash it at home? Swing by the Dispensary? Pay for parking instead of walking farther? Grab some fast food? Throw out food in your fridge because it spoiled before you ate it? Buy another song or app or game for your computer/phone? Shopping expense (ULTA, Amazon, click sites, expensive presents for friends/family)? We all can SAVE a bit more than we currently are.
NOW THE WRITTEN ASSIGNMENT: This is what you need to WRITE: (unfortunately, really short answers that don’t thoroughly answer each question are going to result in point loss!!)
Now I want to know what YOUR retirement plan is? LABEL EACH!!! A, B, etc.
A) – (you will have 2 bullets x 2 points each)
B) – (you will have 3 bullets x 2 points each)
C) – (you will have 4 bullets x 4points each)
D) – (you will have 4 bullets x 3 points each)
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