strategic retirement plan savings methodology

Adkins Capital Management OVERVIEW OF STRATEGIC RETIREMENT PLAN SAVINGS

METHODOLOGY AND INTERNET-BASED CALCULATOR

CONTENTS

The purpose of this presentation is to provide an overview of the strategic

retirement plan savings methodology and Internet-based calculator that has

been developed by Adkins Capital Management.

This presentation will explain how prospective home buyers can use the

Retirement Plan Savings Calculator in order to:

Determine the amount of money they need to accumulate by their

retirement date in order to fund their retirement; and

Determine the amount of money they need to save each year in order to

accumulate a retirement savings amount that is capable of funding their

retirement.

By utilizing the analytical methodology and Internet-based calculator

explained in this presentation, prospective home buyers will be able to make

a prudent home purchase decision.

1 Adkins Capital Management, LLC.

Adkins Capital Management Privately owned and independently operated company.

Our mission is to bridge the gap in the residential housing

market, where deficiencies in education, public policy,

regulation, product structure, and personnel have created

an environment where prospective home buyers need

objective information and useful analytical tools that will

allow them to make a prudent home purchase decision.

More than 15 years of real estate analysis experience,

more than 10 years of institutional investment consulting

experience, and more than eight years of freelance

financial writing experience.

Adkins Capital Management, LLC. 2

Author of more than 25 published articles, including publications by Forbes,

Investor’s Business Daily, Yahoo, Investopedia, Financial Edge, and more than 230

news organizations worldwide.

Six Problems With 401k Plans (150+ news organizations);

The Defined Benefit Plans Many Problems (San Francisco Chronicle and

Yahoo Finance);

Five Resources For Learning to Retire Rich (Forbes and Investopedia).

This analysis makes four important assumptions that are necessary in order to utilize the strategic retirement plan savings methodology:

First, the prospective home buyer knows the amount of annual pre-tax retirement income that he would like to have available to spend during his retirement years (e.g. $50,000 per year until death);

Second, the prospective home buyer can make a single prudent assumption about the investment rate of return that he will earn on his retirement savings during his working years and during his retirement years (e.g. 6% per year);

Third, the prospective home buyer will live exclusively off of the investment earnings that are generated by his accumulated retirement savings amount and will not utilize any of his accumulated retirement savings principal once he is retired; and

Fourth, the prospective home buyer will bequest his accumulated retirement savings amount to his beneficiary upon his death.

METHODOLOGY ASSUMPTIONS


In order to establish an effective retirement plan strategy, the prospective home

buyer needs to begin by answering the following question:

How much money will I need to accumulate by the day I retire in order to

maintain my desired standard of living during my retirement years (e.g.

$833,333 dollars)?

By utilizing the strategic retirement plans savings methodology, the answer to this

question can be found by assessing the prospective home buyer’s desired pre-tax

annual retirement benefit amount, and the assumed rate of return on retirement

savings that the prospective home buyer believes he can achieve during his

retirement years.

Example:

If the prospective home buyer would like to have an annual pre-tax retirement benefit

of $50,000 dollars, and the prospective home buyer believes that he can generate a

6% annual return on investment savings during his retirement years, then the

prospective home buyer will need to accumulate $833,333 dollars by the day he

retires.

By answering the first retirement savings question, the prospective home buyer

will have established a financial goal that he should strive to achieve during his

working career.

FIRST STRATEGIC RETIREMENT PLAN SAVINGS QUESTION


Once the prospective home buyer knows how much money he needs to accumulate

by the day he retires in order to fund his annual retirement benefit, the second

question he needs to answer is:

How much money will I need to save each year during my working career in

order to accumulate my required savings target amount (e.g., $10,541 per year

for 30 years)?

By utilizing the strategic retirement plan savings methodology, the answer to this

question depends only on two assumptions:

How many years will the prospective home buyer work prior to his retirement;

and

What rate of return will the prospective home buyer earn on his retirement

savings during his working career.

With this information, the prospective home buyer can use the Strategic Retirement

Plan Savings Calculator in order to analyze his retirement strategy for a wide variety

of financial savings scenarios.

By answering the second retirement savings question, the prospective home buyer

will be able to develop an effective strategic retirement plan policy that he should

strive to achieve during his working career.

SECOND STRATEGIC RETIREMENT PLAN SAVINGS QUESTION


Example: Assume that the prospective home buyer would like to have an annual

retirement benefit amount of $50,000 dollars, assume that he will work for 30 years,

and assume that he believes that he will achieve a 6% annual return on investment

from his retirement savings during his working career.

Question: How much money will the prospective home buyer need to save each

year in order to accumulate a retirement savings amount that is capable of

funding my retirement?

Answer: $50,000 dollars required annual retirement benefit amount * 21.0815% factor

multiple from table above = required annual savings amount of $10,541 dollars. At

retirement, the prospective home buyer will have accumulated $833,333 dollars,

assuming a 6% annualized rate of return on investment and a 30-year working career.

Percent of Annual Gross Retirement Benefit Needed to be Saved Annually During the Prospective Home Buyer’s

Working Career in Order to Fund His Desired Standard of Living During Retirement

Assumed

Annual

Rate of

Return on

Investment

Number of Working Years

10 20 25 30 35 40 50

1% - 5% Contact ACM

6% Contact ACM 21.0815% Contact ACM

7% - 20% Contact ACM


Prospective home buyers can also incorporate their annual estimated social security benefit amount into the strategic retirement plan savings methodology in order to help establish their strategic retirement plan policy. By visiting their “My Social Security Account” at http://www.ssa.gov/myaccount/, prospective home buyers can obtain an estimate of their future social security benefit amount.

For example, assume that the prospective home buyer’s future annual social security benefit amount is estimated to be $20,000 dollars. Given this benefit level, his accumulated savings target at retirement will be reduced from $833,333 dollars to $500,000 dollars, and his annual required pre-tax savings amount will be reduced from $10,541dollars to $6,325 dollars (($50,000 - $20,000) * 21.0815%).

By taking into account the prospective home buyer’s expected social security benefit, a much more accurate and achievable strategic retirement plan policy can be established by using the Strategic Retirement Plan Savings Calculator.

IMPLICATIONS OF SOCIAL SECURITY BENEFITS

7

Strategic Retirement Plan

Savings Policy Without Social Security With Social Security

Required accumulated

target savings amount $833,333 $500,000

Required annual savings

amount $10,541 $6,325

Adkins Capital Management, LLC.


The following picture is an illustration of the Strategic Retirement Plans

Savings Calculator that is available on the Adkins Capital Management Website

The strategic retirement plan savings methodology outlined in this presentation utilizes intuitive financial engineering in order to:

Calculate the amount of money that prospective home buyers need to accumulate by the day they retire in order to fund their retirement;

Calculate the amount of money that prospective home buyers need to

save each year in order to fund their retirement; and

Reduce the number of input variables that are required to implement a

strategic retirement plan policy

Eliminate the need to rely on the prospective home buyers’ future salary

expectations

Eliminate the need to rely on the length of the prospective home buyers’

retirement life.

By utilizing the Strategic Retirement Plan Savings Calculator, in conjunction

with the use of the Adkins Residential Home Valuation Analyzer, prospective

home buyers will be able to establish an effective strategic retirement plan

policy and make a prudent home purchase decision.

CONCLUSION


THANK YOU FOR VISITING

Adkins Capital Management Adkins Capital Management

New York, NY, U.S.A.

Contents of this report are the property of Adkins Capital Management. No part of this report may be reproduced,

redistributed, displayed, or transmitted without the written consent from representatives of Adkins Capital Management.


strategic retirement plan savings methodology

Education