Worksheet: Retirement Savings 
1 
Annual retirement income you'll need in today's
dollars. 
$25,000.00 
(Your current
comfortable annual income x 0.80) 

2 
Annual income you'll need in inflationadjusted
dollars. (Assume 4% inflation) 

$25,000.00 
x 
1.04 
$26,000.00 

Line 1 

Factor A 

3 
How much annual income do you expect to earn during
retirement? 

$9,000.00 
+ 
$0.00 
$9,000.00 

Social Security 

Pension 

4 
Additional annual income you'll need from savings
and investments. 

$26,000.00 
 
$9,000.00 
$17,000.00 

Line 2 

Line 3 

5 
Amount you must save to make up for retirement
shortfall (20 years). 

$17,000.00 
x 
13.5903 
$231,035.10 

Line 4 

4% growth after inflation 

6 
Amount you've already saved including IRAs, 401(k)s,
etc. 
$460,000.00 




7 
At retirement, your
current savings will be worth this much (assume 8%). 

$460,000.00 
x 
1.08 
$496,800.00 

Line 6 

Factor B 

8 
Amount you still need to save. 

$231,035.10 
 
$496,800.00 
$265,764.90 

Line 5 

Line 7 

9 
Amount you need to save each year to reach your
goal. 

$265,764.90 
x 
1 
$265,764.90 

Line 8 

Factor C 


Note: Factors are for retirement in 10 years. 


For 1 year:
use A = 1.0400 B = 1.0800 C= 1.000 


For 2 years:
use A = 1.0816 B = 1.1664 C= 0.4808 


For 3 years:
use A = 1.1249 B = 1.2597 C= 0.3080 


For 4 years:
use A = 1.1699 B = 1.3605 C= 0.2219 


For 5 years:
use A = 1.2127 B = 1.4693 C= 0.1705 


For 10 years:
use A = 1.4802 B = 2.1589 C= 0.0690 


For
15 years: use A = 1.8009 B =
3.1722 C = 0.0368 


For 20 years:
use A = 2.1911 B = 4.6610 C = 0.0219 


For 25 years:
use A = 2.6658 B = 6.8485 C = 0.0137 


For 30 years:
use A = 3.2434 B = 10.0627 C = 0.0088 


Friday, March 30, 2007 





