whats your retirement number #?: ms excel retirement planning spreadsheet army community service...

What’s 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

“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 /

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.

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

Having a Scooby Doo

moment?

Please ask questions

as we proceed!




• Come visit at ACS

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.

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

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 (COLA’s), 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 controlWhen you die – it dies

10

Income Streams from your “Money Piles”

Live off of the Interest Only

do not use the principal…

Slowly draw down both the principal and the interest = Annuitizing

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 controlYou could outlive your $ -

or your $ could outlive you …

12

AnnuityAllowance

Their responsibility

You have less control

Can’t outlive the money

Can’t increase or decrease the periodic amounts

? Cost of Living Increases due to inflation ?

AnnuitizingMoney Piles

Vary the pay-out’s

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?

What’s Your Retirement Number

#?Time Line of Persons

InvolvedRequirement

over time“the number” $#

Capabilities to reach

“the number”Allowances

annuities, retirement plans:Social Security; FERS /

CSRS; Military

PilesMoney you

grow, and then pay out:

TSP, 401k, IRA


• Purposes

• The ACS Spreadsheet “philosophy” and introduction• Resources for your use


• Come visit at ACS

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

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 = 2027assumes 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)

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

18

Retirement Capabilities


Annual Income over the phases of retirement

• Go – Go

• Go-Slow

• No-Go

• Estate Planning

Ret Center

Deficit!Insurance?

Other?

Spendable Income

Expenses*

19

Page 4: Capabilities by Source

“What will the piles grow to? What will the piles pay out?”

20


MS Excel (.xls) Work Sheet

Taxable (Columns 4 – 12) Non-Taxable (Column 13)

Spendable(Column 14)

Back to Page 3

21


MS Excel (.xls) Work Sheet1. Write your timeline starting with year of retirement and age(s)

2. Ages until ???

Inflation (Cost of Living Increase! [You Hope]) Factors

22



Monthly Income (forecasted);Inflation factor increase for appropriate types

23



4 & 5. Taxable Pensions and Annuities

• CSRS (Taxable part)• FERS• Military• Insurance Co.• Annuitized Funds

• TSP• 401k / 503b• IRA

24



6 & 7. Social Security

(Taxable part)

25



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

26



10. Taxable Income

11. Taxable Rate (effective rate for Federal

and State)

12. After Tax

Income

27



13. Non-Taxable Income• VA• Disability Payments• Social Security (non-taxed part)• CSRS (non-taxed part)

• Roth IRA’s• Life Insurance Pay-outs

28

Retirement Requirements & Capabilities


Income

Expenses*(carried over from previous .xls work

sheet)

Your results over time

From Parts 1 & 2

Basic Retirement Financial Planning- Part 2 - ACS RIA 29



Make Adjustments to Income over

time due to transitions




Deficit!Increase Ret Savings?

Insurance?IRA?

Savings?Other?




How do you know it is accurate?

It isn’t – no person knows the future!

OK – Now What?

32

Retirement Capabilities Work Sheet

Build at least 3 “scenarios” or

“tests”

Goldie-Locks and the Three

Bears

Best CaseLow InflationLow ExpensesHigh Income & Returns

Worst CaseHigh InflationHigh CostsLow Income & Returns

Middle CaseIn-between inflation and expensesFair Income & Returns


• Purposes• The ACS Spreadsheet “philosophy” and introduction

• Resources for your use• PowerSave Software from Utah State Extension Service• Other software and web sites


www. powerpay. org

Free from the

Utah State

University Extension

Service

New? Sign Up Now

www. powerpay. orgPowerSave

Function“Money Future”

Accumulating Wealth

WithdrawingWealth

Accumulation Phase 1st calculate what your money could grow to:

Pay-out Phase- by time period- by set amount



Accumulating Wealth

Potentially money growth

Impact of inflation



WithdrawingWealth

Your “pile’s” monthly payout

over 25 years = $_

Impact of inflation

Withdraw for a Specified Time



WithdrawingWealth

If your “pile’s” monthly payout is $350, how

long will the pile last?

Impact of inflation

Withdraw a Specified

Amount

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 profileGo to your profile

Create new profiles

Create new profiles

PowerPayDebt Pay-offs Spending Plans

Create a BudgetSpending PlansCreate a Budget

PowerSaveFuture Value of

Money!

PowerSaveFuture Value of

Money!

www.powerpay.org Free from the Utah State Extension

Service

Yes! PowerSave!! Got it!!!

What could possibly go wrong?



• PowerSave Software from Utah State Extension Service

• Other software and web sites


Interest Vision Softwarefor 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!


www. mymoney. govFrom the Dept. of the Treasury and the FTC


Social Security Administration

www. ssa. gov

Retirement

45

American Savings Education Council (ASEC)

www. asec. org / ballpark /Calculators

BallparkEstimate

Fed Employee BallparkEstimate

T. Rowe Price Retirement Income Manager – a web simulation

www. troweprice. com Retirement > Retirement Planning > Retirement Income Calculator

4% RulePlan 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

#1Net Worth Statement

Net Worth Statement

Assets (+) Fixed (stuff) Liquid or Monetary

Liabilities (-)

+ Assets- Liabilities= Your Net Worth

It’s not the money you make; it’s 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”!

Jon CookAccredited Financial Counselor (AFC)

Army Community ServiceBldg 102, 1st Floor, SE corner

[email protected]

(309) 782-0815 / -0829

www.riamwr.com/acs/financial-readiness

Come visit!

whats your retirement number #?: ms excel retirement planning spreadsheet army community service...

Documents

retirement number

phases of retirement

retirement population

retirement plans

annuitizing slide

income stream slide

ira slide

com acs slide