Life-time Earnings and Projected Retirement Needs Project Instructions.
Print and Save each of these different plans with a new name !!! Be sure each each plan (including every column) is fully documented with words.
After you have your life-time earnings and projected retirement needs spreadsheet completed and approved by the teacher, you should make the following savings plans.
1. An IRA savings plan with dollar amounts which meets your projected retirement needs assuming a defined retirement plan which provides 50% of your final salary this first year and that is indexed for inflation (teachers, govt. employees, firemen, policemen, etc.). This IRA savings should be completed before you are 55 if at all possible. (Be sure you show the total out-of-pocket savings for each different type of plan you do.! The object is, of course, to have the least out of pocket savings and still remain realistic (less than 5%) of your salary.
2. An IRA savings plan with the lowest savings percentage amount possible, saving over your whole working life, or just over the working years up to age 60 if you like. Again, it must meet your projected retirement needs assuming a defined retirement plan . (Again, what is the total out of your pocket for this plan?)
3. A projected retirement savings plan over your working life, assuming you have a 401K plan where the employer will match the first 3% of your salary, and you can save up to 10% of your salary tax free within the 401K. Reduce your IRA type savings, or move them all to the 401K plan.
4. Now, modify one of the retirement plans (which ever is typical of the type of occupation you have chosen), this time assuming that you do not start your retirement savings plans until you are 40. Document any problems and observations you make here!
5. Write a final evaluation paragraph (or two), clearly stating why you think that I taught this unit and what I wanted you to know, and specifically what you learned that you had never considered before. If any of your spreadsheet retirement projections are not exactly what you would like, what could you have done differently and realistically to improve the plans you have just finished. You might also tell me of topics that you would have liked to known more about about that I did not cover as thoroughly as you would have liked.
6. Get to the office and get a copy of all parts of your project for yourself, before you turn it in, since I will keep it!
7. Extra credit. You may do this only if all other
parts of this project are completed, approved, and turned in for
your grade! Modify plan #2 or #3 (which ever is typical of
the type of occupation you have chosen), as necessary, making a plan
for early retirement. You would like to have enough by age 60.
Assume you will wait for age 67 to collect Social Security ( so keep that
column the same as your original).
Suggested reading list:
Financial Passages by Benjamin J. Stein
Get a Financial Life by Beth Kobliner
Get Rich Slow by Tama McAleese
Time is Money by Frances Leonard
Everything College Didn’t Teach You About Money by Beth Brophy
Money, How to Get It, Keep It, and Make it Grow by Tama McAleese
