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Whats Your Retirement Number #?: MS Excel Retirement Planning Spreadsheet Army Community Service (ACS) U.S. Army Garrison Rock Island Arsenal Edition.

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Presentation on theme: "Whats Your Retirement Number #?: MS Excel Retirement Planning Spreadsheet Army Community Service (ACS) U.S. Army Garrison Rock Island Arsenal Edition."— Presentation transcript:

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2 Whats Your Retirement Number #?: MS Excel Retirement Planning Spreadsheet Army Community Service (ACS) U.S. Army Garrison Rock Island Arsenal Edition of April 29, 2013 version 4

3 Uncle Jon Cook Survivor Outreach Services – Financial Counselor Financial Readiness Program Personal Financial Management (PFM) Specialist Accredited Financial Counselor (AFC) Army Emergency Relief (AER) Notary Public Employment Readiness Program Military Spouse Employment Program (MSEP) (Former) Professional in Human Resources (PHR) & (Former) Certified Workforce Development Professional (CWDP) (309) 782 - 0815 1 – 877 – 882 – 0523 jon.c.cook.civ @ mail. mil www. riamwr. com / acs /

4 Disclaimer This presentation is for the information and education of the participants. The information presented is neither an endorsement nor a guarantee. Past performance is no guarantee of future performance. Before making any financial commitment, consult with your Family Members and appropriate professional advisers.

5 Sequence of this Presentation Purposes The ACS Spreadsheet philosophy and introduction Resources for your use PowerSave Software from Utah State Extension Service Other software and web sites Come visit with us at ACS

6 Having a Scooby Doo moment? Please ask questions as we proceed!

7 Sequence of this Presentation Purposes The ACS Spreadsheet philosophy and introduction Resources for your use PowerSave Software from Utah State Extension Service Other software and web sites Come visit at ACS

8 Purposes of this Presentation To provide a method to develop the amounts of money needed to save for retirement planning. Illustrate that a portion of retirement funding will be accomplished through pensions and annuities (allowances) – and that a portion may need to be funded from savings and investments (piles). Enable persons and families as a team to discuss retirement planning figures in a logical and rational manner.

9 8 Annuity An insurance instrument Purchased over time or at one time (lump sum) Payout – an income stream = an allowance starting at a specified time ending at a specified time; or upon death of the beneficiary [single annuity] – or beneficiaries [joint or group annuity] for a specific amount (fixed) – or variable amount (variable) An asset producing and income stream

10 9 Annuity Annuities from an insurance company (e.g. Met Life) or a private sector employer by contract Annuity – like (government sponsored) income streams with cost of living increases (COLAs), based on a formula : CSRS (Civil Service Retirement System) FERS (Federal Employee Retirement System) Military Retirement Social Security Allowances Steady allowance for life (of the beneficiary) They have the responsibility They have control When you die – it dies

11 10 Income Streams from yourMoney Piles Live off of the Interest Only do not use the principal… Slowly draw down both the principal and the interest = Annuitizing

12 11 Annuitizing Liquefying an asset (e.g. a mutual fund or savings account) Over a specified time Producing an income stream from a $ pile … like creating your own annuity An asset producing and income stream It can be steady or periodic or ____? You have the responsibility You have control You could outlive your $ - or your $ could outlive you …

13 12 Annuity Allowance Their responsibility You have less control Cant outlive the money Cant increase or decrease the periodic amounts ? Cost of Living Increases due to inflation ? Annuitizing Money Piles Vary the pay-outs Your responsibility You have more control Can outlive the money & the money can outlive you Can increase or decrease the periodic amounts You account for cost of living increases due to inflation What is in your Retirement Plan?

14 Whats Your Retirement Number #? Time Line of Persons Involved Requirement over time the number $# Capabilities to reach the number Allowances annuities, retirement plans: Social Security; FERS / CSRS; Military Piles Money you grow, and then pay out: TSP, 401k, IRA

15 Sequence of this Presentation Purposes The ACS Spreadsheet philosophy and introduction Resources for your use PowerSave Software from Utah State Extension Service Other software and web sites Come visit at ACS

16 15 Building Your Time Line Paper or MS Excel (.xls) work sheet Page 1 Lay out your Person(s) Dates Ages Retirement options & time frames Financial obligations and options Plan Your Use of Available Time

17 Social Security Agency (www. ssa. gov) Unisex Life Expectancy at Retirement Table Closest to Year of Retirement Age at Retirement 17.12 Years from 2010 is the half-way point = 2027 assumes that ½ of this retirement population will die before this year (age 83); ½ of this retirement population will die after this year, some living beyond 2044 (age 100)

18 17 Retirement Requirements MS Excel (.xls) Work Sheet Page 2 Annual Budget over the phases of retirement Go – Go Go-Slow No-Go Estate Planning

19 18 Retirement Capabilities MS Excel (.xls) Work Sheet Page 3 Annual Income over the phases of retirement Go – Go Go-Slow No-Go Estate Planning Ret Center Deficit! Insurance? Other? Spendable Income Expense s*

20 19 Page 4: Capabilities by Source What will the piles grow to? What will the piles pay out?

21 20 Retirement Capabilities MS Excel (.xls) Work Sheet Taxable (Columns 4 – 12) Non-Taxable (Column 13) Spendable (Column 14) Back to Page 3

22 21 Retirement Capabilities MS Excel (.xls) Work Sheet 1. Write your timeline starting with year of retirement and age(s) 2. Ages until ??? Inflation (Cost of Living Increase! [You Hope]) Factors

23 22 Retirement Capabilities MS Excel (.xls) Work Sheet Monthly Income (forecasted); Inflation factor increase for appropriate types

24 23 Retirement Capabilities MS Excel (.xls) Work Sheet 4 & 5. Taxable Pensions and Annuities CSRS (Taxable part) FERS Military Insurance Co. Annuitized Funds TSP 401k / 503b IRA

25 24 Retirement Capabilities MS Excel (.xls) Work Sheet 6 & 7. Social Security (Taxable part)

26 25 Retirement Capabilities MS Excel (.xls) Work Sheet Taxable Pensions and Annuities CSRS (Taxable part) FERS Military Insurance Co. Annuitized Funds TSP 401k / 503b IRA Social Security (Taxable part) 8. Work 9. Other Savings Royalties Rents

27 26 Retirement Capabilities MS Excel (.xls) Work Sheet 10. Taxable Income 11. Taxable Rate (effective rate for Federal and State) 12. After Tax Income

28 27 Retirement Capabilities MS Excel (.xls) Work Sheet 13. Non-Taxable Income VA Disability Payments Social Security (non-taxed part) CSRS (non-taxed part) Roth IRAs Life Insurance Pay-outs

29 28 Retirement Requirements & Capabilities MS Excel (.xls) Work Sheet Page 3 Income Expenses* (carried over from previous.xls work sheet) Your results over time From Parts 1 & 2

30 Basic Retirement Financial Planning- Part 2 - ACS RIA 29 Retirement Capabilities MS Excel (.xls) Work Sheet Make Adjustments to Income over time due to transitions

31 Basic Retirement Financial Planning- Part 2 - ACS RIA 30 Retirement Capabilities MS Excel (.xls) Work Sheet Deficit! Increase Ret Savings? Insurance? IRA? Savings? Other?

32 Basic Retirement Financial Planning- Part 2 - ACS RIA 31 Retirement Capabilities MS Excel (.xls) Work Sheet How do you know it is accurate? It isnt – no person knows the future! OK – Now What?

33 32 Retirement Capabilities Work Sheet Build at least 3 scenarios or tests Goldie-Locks and the Three Bears Best Case Low Inflation Low Expenses High Income & Returns Worst Case High Inflation High Costs Low Income & Returns Middle Case In-between inflation and expenses Fair Income & Returns

34 Sequence of this Presentation Purposes The ACS Spreadsheet philosophy and introduction Resources for your use PowerSave Software from Utah State Extension Service Other software and web sites Come visit with us at ACS

35 www. powerpay. org Free from the Utah State University Extension Service New? Sign Up Now

36 www. powerpay. org PowerSave Function Money Future Accumulating Wealth Withdrawing Wealth Accumulation Phase 1 st calculate what your money could grow to: Pay-out Phase - by time period - by set amount

37 www. powerpay. org PowerSave Function Money Future Accumulating Wealth Potentially money growth Impact of inflation

38 www. powerpay. org PowerSave Function Money Future Withdrawing Wealth Your piles monthly payout over 25 years = $_ Impact of inflation Withdraw for a Specified Time

39 www. powerpay. org PowerSave Function Money Future Withdrawing Wealth If your piles monthly payout is $350, how long will the pile last? Impact of inflation Withdraw a Specified Amount

40 Once you create your account, you can create other profiles (e.g. family members); or just have them create their own accounts. Go to your profile Create new profiles PowerPay Debt Pay-offs Spending Plans Create a Budget PowerSave Future Value of Money! www.powerpay.org Free from the Utah State Extension Service

41 Yes! PowerSave!! Got it!!! What could possibly go wrong?

42 Sequence of this Presentation Purposes The ACS Spreadsheet philosophy and introduction Resources for your use PowerSave Software from Utah State Extension Service Other software and web sites Come visit with us at ACS

43 Interest Vision Software for use at Army Community Service You fill in all but one of the missing data elements: it will figure out the one missing element for you!

44 Basic Retirement Financial Planning- Part 3 - ACS RIA 43 www. mymoney. gov From the Dept. of the Treasury and the FTC

45 Basic Retirement Financial Planning- Part 3 - ACS RIA 44 Social Security Administration www. ssa. gov Retirement

46 45 American Savings Education Council (ASEC) www. asec. org / ballpark / Calculators Ballpark Estimate Fed Employee Ballpark Estimate

47 T. Rowe Price Retirement Income Manager – a web simulation www. troweprice. com Retirement > Retirement Planning > Retirement Income Calculator 4% Rule Plan to withdraw no more than 4% of your assets the first year; in following years draw 4% + small COLA factor This is a commercial web site

48 #1 Net Worth Statement Assets (+) Fixed (stuff) Liquid or Monetary Liabilities (-) + Assets - Liabilities = Your Net Worth Net Worth Statement Assets (+) Fixed (stuff) Liquid or Monetary Liabilities (-) + Assets - Liabilities = Your Net Worth Its not the money you make; its the money you get to keep! – Ric Edelman Only way to get money out of a Fixed Asset is to sell or rent it Liquidity! Where ever you start is OK – start! And make it grow from there: build wealth – not debt!

49 Jon Cook Accredited Financial Counselor (AFC) Army Community Service Bldg 102, 1 st Floor, SE corner jon.c.cook.civ@mail.mil (309) 782-0815 / -0829 www.riamwr.com/acs/financial-readiness Come visit!


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