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WORKSHEETS FOR THE FUTURE WORKSHEETS FOR THE FUTURE by qlc15660

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									     WORKSHEETS FOR THE FUTURE
     You have seen                               These lighter colored versions will
     the following                               also make it easier to make extra
     worksheets                                     copies as needed. So if you
     before. They appear                                        anticipate needing more
     on some of the preceding                                                than one
     pages. This additional collection will
     prove useful in a variety of ways:          extra set,
     It will help you redo some or all of your   why not make it now?
     calculations from time to time.                    And don’t forget to use your
     If you get a raise and add it to your       trusty number 2 pencil. Remember,
     savings, that's an ideal time to update     the reward for completing this infor-
     Worksheet A (Today's Money).                mation should be a happy retirement
     Its abbreviated instructions will provide   future rather than a beautifully drafted
     an extra level of understanding.            plan. Done well, it will be as considered
     Do you plan to pay off a mortgage           and accurate as it is erased and
     between now and retirement? This will       dog-eared. Accomplishing such a goal
     also affect your worksheet calculations.    will require that each mystery be
     And each time you add more to savings,      solved a clue at a time.
     you close any gap between the money                If all this sounds a little daunting,
     you have and the money you will need        please don’t forget our generous time
     for retirement (Worksheet H).               frame – 5 to 10 years if we start now.
     Saving copies of all the worksheets will    Even devoting just one hour a month
     clarify the progress you are making         will allow more than enough attention
     toward your retirement goals.               to develop your successful strategy.




45                                                                                              46
                                                                                                                                                      WORKSHEET A
                                                                                                                                        TODAY’S MONEY
                                                                                                                   Instructions: Record amounts for yourself and for your spouse in columns 1 and 2. Add up the
                                                                                                                   money across each row for you and your spouse and write the total in column 3. Then add all
                                                                                                                   the numbers down column 3 and write the total in column 3 at the bottom.
               INSTRUCTIONS FOR WORKSHEET A
               TODAY’S MONEY                                                                                                                                      1                  2                   3
     Worksheet A lets you shine some light on the             retirement saving sources and project earnings                                                   You               Spouse               Total
     money you will have to support yourself (and your        on each of them during the next 10 years. You will
                                                                                                                   Work-related retirement savings
     spouse, if you have one) in retirement.                  be able to transfer the dollar amounts for your
             Write down in this worksheet only the            income sources directly from Column 3 of               401(k) or 403(b)
     money you have today that you plan to use when           Worksheet A. Multiply that number by the savings
     you retire. Include the balance on your 401(k)           growth factor your choose and enter the new            Keogh
     plan, Keogh, SEP-IRA, and SIMPLE plans in the            number in Column 3.
     spaces provided. The next rows include savings in                Like Worksheet A, Social Security benefits     SEP-IRA
     IRAs (both traditional and Roth), savings accounts       and traditional pensions are not include since you
     in a bank, and the market value of your home.            won't receive these sources of income until            SIMPLE IRA
             Enter mortgage and other liens as a              retirement.
     negative amount, then go on to add any other                                                                    Other
                                                                        INSTRUCTIONS FOR WORKSHEET C
     personal savings and investments you have,                    NEW SAVINGS BETWEEN                             IRAs (traditional)
     including the cash value of life insurance and any            NOW AND RETIREMENT
     valuable collections you may have.                       You may well have additional workplace and
                                                                                                                   IRAs (Roth)
             The only items you don't add in this chart       personal savings to add to your earnings between
     are balances from your Social Security statements        now and retirement. Worksheet C lets you             Other
     and from a traditional pension plan, if you              calculate potential growth using a savings growth
     have one.                                                factor representing 3, 5, or 7 percent rates of      Home equity (market value)
                INSTRUCTIONS FOR WORKSHEET B
                                                              return, depending on how much you believe each
               YOUR MONEY-                                    of the worksheet items will increase in value        Mortgage and liens
                                                                                                                   (enter as negative amount)
           10 YEARS FROM TODAY                                between now and the day you retire in 10 years.
     This worksheet takes the total from Worksheet A                  To get 10-year totals, multiply the amount   Personal savings and investments
     and projects it into the future – specifically, to the   you believe you will add monthly to IRAs, 401(k)s
     day you retire. How much money will you have?            and other savings instruments by the growth factor   Other assets (collections, etc.)
              By choosing a savings growth factor for a 3,    your select. The result: the value of your new
     5, or 7 percent rate of return, you can take current     savings in 10 years.                                 TOTAL ASSETS




47                                                                                                                                                                                                                48
                                        WORKSHEET B                                                                                                 WORKSHEET C
                 YOUR MONEY-                                                                                             NEW SAVINGS BETWEEN
             10 YEARS FROM TODAY                                                                                         NOW AND RETIREMENT
                          Asset Growth Factors for Three Selected Rates of Return                                                Savings Growth Factors for Three Selected Rates of Return
                            1.344 for 3%        1.629 for 5%       1.967 for 7%                                                  139.741 for 3%       155.282 for 5%        173.085 for 7%
                                                        1                     2                    3                                                          1                  2                    3
                                                 Current $           Asset growth Asset value                                                           Estimated           Savings             Value of
                                                  value                 factor    in 10 years                                                            monthly            growth              savings
                                                (from Worksheet A,
                                                    Column 3)
                                                                       (rate of return)   (Column 1x Column 2)
                                                                                                                                                         savings             factor           in 10 years
     Work-related retirement savings                                                                                                                     amount                              (Column 1x Column 2)
                                                                                                                 Work-related retirement savings
       401(k) or 403(b)
                                                                                                                   401(k) or 403(b)
       Keogh
                                                                                                                   Keogh
       SEP-IRA
                                                                                                                   SEP-IRA
       SIMPLE IRA
                                                                                                                   SIMPLE IRA
       Other
                                                                                                                   Other
     IRAs (traditional)
                                                                                                                 IRAs (traditional)
     IRAs (Roth)
                                                                                                                 IRAs (Roth)
     Other
                                                                                                                 Other
     Home equity (market value)
                                                                                                                 Home equity (market value)
     Mortgage and liens
     (enter as negative amount)                                                                                  Mortgage and liens
                                                                                                                 (enter as negative amount)
     Personal savings and investments
                                                                                                                 Personal savings and investments
     Other assets (collections, etc.)
                                                                                                                 Other assets (collections, etc.)

     TOTAL ASSETS
                                                                                                                 TOTAL ASSETS



49                                                                                                                                                                                                                  50
                                                                                                                                                      WORKSHEET D
                                                                                                                       MONTHLY INCOME OVER
                                                                                                                       A 30 -YEAR RETIREMENT
                                                                                                                                    Income Conversion Factors for Assumed Rates of Interest
               INSTRUCTIONS FOR WORKSHEET D
                                                                                                                                  0.004216 for 3%      0.005368 for 5%       0.006653 for 7%
        MONTHLY INCOME OVER
        A 30-YEAR RETIREMENT                                                                                                                                   1                  2                     3

     Worksheet D takes your earnings and savings over                For other assets, those you tracked down in                                        Accumulated            Income      Monthly
                                                                                                                                                             assets           conversion    income
     a lifetime and projects a monthly income – the         Worksheets B and C, add the totals for each item                                                  (Column 3
                                                                                                                                                                                factor   beginning at
                                                                                                                                                        from Worksheet B plus
     amount you will have to live on – during a 30-year     from both worksheets and enter the total in                                                       Column 3                    retirement
                                                                                                                                                          from Worksheet C)                    (Column 1x Column 2)
     retirement period. Unlike previous worksheets,         Column 1 of this worksheet. Then select an income
     this one adds the amount of your Social Security       conversion factor representing a 3, 5, or 7 percent    Social Security
     benefit and of any payout from a traditional           rate of return and enter it in Column 2. Multiple
     pension plan.                                          Column 1 by Column 2 and enter the result in           Work-Related Retirement Savings
              If you have a fixed pension (rather than an   Column 3. Remember, this is a guesstimate of your
     employer 401(k)-type plan), your pension plan          monthly income for the 30 years of retirement            Pension benefits
     administrator or union can give you the                since things that impact your income will vary.
     approximate amount of your pension and whether                                                                  401(k) or 403(b)
     you can receive it as a lump sum or as fixed
     monthly payments. If it is a lump sum, enter that                                                               Keogh
     amount in Column 1 of the worksheet; if you
     receive it as a fixed monthly benefit, fill in only                                                             SEP-IRA
     Column 3.
                                                                                                                     SIMPLE IRA

                                                                                                                     Other

                                                                                                                   IRAs (traditional)

                                                                                                                   IRAs (Roth)

                                                                                                                   Home equity (market value)

                                                                                                                   Mortgage and liens
                                                                                                                   (enter as negative amount)

                                                                                                                   Personal savings and investments

                                                                                                                   Other assets (collections, etc.)

51                                                                                                                 TOTAL ASSETS                                                                                       52
                                                               WORKSHEET E
                                                   Y
                                             MONTHL EXPENSES
                                                 TODAY
     INSTRUCTIONS FOR WORKSHEET E                                                1                                                     1                                    1
MONTHLY EXPENSES                                                              Monthly                                               Monthly                              Monthly
    TODAY                                                                     Amount                                                Amount                               Amount
Now that you know what your
savings and investments are, the         Housing                                        Loans                                                 Health Care (continued)
next step is to move on to today's
expenses. Worksheet E                       Mortgage (Including condo fees)               Car                                                   Dental
calculates what you spend today.            Rent                                          Credit card                                           Vision
        Some monthly expenses               Maintenance                                   Other                                                 Noncovered items
are easy to figure. Others, like a
heating bill, may not remain the         Food (at home)                                 Workplace retirement and personal savings             Travel/vacations
same from month to month and
will require a calculation of your       Utilities                                      Personal Care                                         Entertainment
average monthly bill over a year's
time. Still other bills may arrive          Electricity                                   Hair cut                                              Eating out
only quarterly. While you may               Heat                                          Dry cleaning                                          Hobbies
want to guesstimate some of                 Internet/cable                                Gym                                                   Movies/theatre
these bills the first time you fill in      Phones                                        Other
the worksheets, you will probably           Water/sewer                                                                                       Charitable contributions

want to add more accurate
                                         Clothing                                       Transportation                                        Other
figures later.
        If you are married, include
                                         Taxes                                            Car repairs and maintenance                           Gifts
your spouse's expenses; in
                                                                                          Gas                                                   Membership dues
addition, if anyone is financially
                                            Real estate                                   Parking                                               Pet-related costs
dependent on you, add in those
                                            Income (state and federal)                    Public transportation
expenses.
                                            Other property taxes                                                                              TOTAL ESTIMATED
                                                                                                                                              MONTHLY EXPENSES
                                         Insurance                                      Health Care                                           (other than health)

                                            House                                         Health insurance                                    TOTAL ESTIMATED
                                            Life                                          Doctor visits                                       MONTHLY EXPENSES
                                            Car                                           Hospital                                            (health)
                                            Disability                                    Medicine
                                            Long-term care                                Over-the-counter medicine
53                                                                                                                                                                                 54
                                          WORKSHEET F
           Y
     MONTHL EXPENSES IN 10 YEARS          (First year of retirement)

                                                     1                        2                       3                                                                    1                        2                       3
                                           Total monthly expenses 10-year inflation factor   Total expenses in 10                                                Total monthly expenses 10-year inflation factor   Total expenses in 10
                                              now (from monthly      of 1.4106 (3.5%)         years adjusted for                                                    now (from monthly      of 1.4106 (3.5%)         years adjusted for
                                             expenses column in   (except for health care) inflation (Columns 1x2)                                                 expenses column in   (except for health care) inflation (Columns 1x2)
                                                Worksheet E )                                                                                                         Worksheet E )


     Housing                                                                                                         Loans


        Mortgage (Including condo fees)                                                                                Car
        Rent                                                                                                           Credit card
        Maintenance                                                                                                    Other

     Food (at home)                                                                                                  Workplace retirement and personal savings

     Utilities                                                                                                       Personal Care

        Electricity                                                                                                    Hair cut
        Heat                                                                                                           Dry cleaning
        Internet/cable                                                                                                 Gym
        Phones                                                                                                         Other
        Water/sewer

     Clothing                                                                                                        Transportation


     Taxes                                                                                                             Car repairs and maintenance
                                                                                                                       Gas
        Real estate                                                                                                    Parking
        Income (state and federal)                                                                                     Public transportation
        Other property taxes

     Insurance                                                                                                       Health Care                                                  For a 7% inflation factor, use 1.9672


        House                                                                                                          Health insurance
        Life                                                                                                           Medicare Part B
        Car                                                                                                            Medigap
        Disability                                                                                                     Doctor visits
        Long-term care                                                                                                 Hospital
                                                                                                                       Medicine
55                                                                                                                     Over-the-counter medicine                                                                                           56
                                     WORKSHEET F CONTINUED
      Y
MONTHL EXPENSES IN 10 YEARS
                                     (First year of retirement)
                                                1                        2                       3
                                      Total monthly expenses 10-year inflation factor   Total expenses in 10
                                         now (from monthly      of 1.4106 (3.5%)         years adjusted for                  INSTRUCTIONS FOR WORKSHEET F
                                        expenses column in
                                           Worksheet E )
                                                             (except for health care) inflation (Columns 1x2)
                                                                                                                      MONTHLY EXPENSES IN
                                                                                                                          10 YEARS
     Health Care (continued)                                                                                    Inflation will increase your expenses, even in the
                                                                                                                10 years between now and retirement. Worksheet
       Dental                                                                                                   F helps you calculate how much inflation might
       Vision                                                                                                   affect each of the items in the expenses you
       Noncovered items                                                                                         recorded in Worksheet E. In addition, it adds room
                                                                                                                for some new types of health-related expenses, a
     Travel/vacations                                                                                           category that usually increases for retirees. This
                                                                                                                chart assumes an inflation rate of 3.5 percent for
     Entertainment                                                                                              items other than health-related expenses and
                                                                                                                assumes a 7 percent inflation rate for health
       Eating out                                                                                               expenses.
       Hobbies
                                                                                                                Note: Many mortgage and some loan payments have
       Movies/theatre                                                                                           already taken into account the rate of inflation. If you have
                                                                                                                a fixed mortgage or loan, you will not need to do the
     Charitable contributions                                                                                   calcultion for this item.


     Other

       Gifts
       Membership dues
       Pet-related costs

     TOTAL MONTHLY EXPENSES
     ADJUSTED FOR 10 YEARS
     INFLATION (other than health)


     TOTAL MONTHLY EXPENSES
     ADJUSTED FOR 10 YEARS
     INFLATION (health)




57                                                                                                                                                                              58
                                      WORKSHEET G
     COMPARING PROJECTED INCOME
           AND EXPENSES-
         ARE YOU PREPARED?                                                                                                                  INSTRUCTIONS FOR WORKSHEET G
                                                                                                                               COMPARING PROJECTED INCOME
                                              1
                                        At retirement
                                                                2                      3                        4                     AND EXPENSES
                                                        Inflation adjusted     Value in dollars          Total value of
                                                           value factor          at retirement             in dollars          This worksheet compares your anticipated income and
                                                           (see Clue 3)         for one month            at retirement
                                                                             (Column 1 x Column 2)   (Column 3 x 360 months)   expenses over the 30 years of your retirement and will
                                                                                                                               reflect any shortfall between the two.
     Total projected income                                                                                                            Use the total monthly income calculated in
       Worksheet D, col 3 total                                                                                                Worksheet D and multiply it by a value adjustment
                                                                                                                               factor you select from Clue 3 on page 31. Select the rate
                                                                                                                               of return with a 0 percent inflation rate. Then mutiply
                                                                                                                               this result by 360 months and enter that amount in
                                                                                                                               Column 4 of Worksheet G. This is your toal projected
     Total projected expenses
                                                                                                                               income.
       Worksheet F, col 3 total
       Health                                                                                                                          Next, record the total monthly expenses
       Other than health                                                                                                       calculated in Worksheet F. For expenses other than
                                                                                                                               health, choose an inflation adjustment value factor from
                                                                                                                               Clue 3 on page 31. Use the 3.5 percent inflation rate
     Projected value of income less                                                                                            (used in Worksheet F) or select another that you
     expenses
                                                                                                                               believe will reflect inflation over the 30-years of your
       Subtract line 2 from line 1
                                                                                                                               retirement.
                                                                                                                                       For health, use a 7 percent inflation rate or
                                                                                                                               select another rate. Multiply this result by 360 months
                                                                                                                               and enter it in Column 4. Now subtract the total value
                                                                                                                               of projected expenses (“other than health” and
                                                                                                                               “health”) over 30 years of retirement in Column 4 from
                                                                                                                               the corresponding total value of your projected income
                                                                                                                               (also in Column 4). The result is the projected value of
                                                                                                                               income less expenses.




59                                                                                                                                                                                         60
                                                                                                WORKSHEET H
                                                               ADDITIONAL SAVINGS
                                                            NEEDED BEFORE RETIREMENT
                INSTRUCTIONS FOR WORKSHEET H
         ADDITIONAL SAVINGS
                                                                  (IN 10 YEARS)
                                                                                               Additional savings factors:
      NEEDED BEFORE RETIEMENT                                                   0.00716 for 3%       0.00644 for 5%        0.00578 for 7%
            (IN 10 YEARS)
     Now you can figure the amount you need to start
                                                            Gap between projected total value of
     to save today to make up for any gap between           expenses and projected total value of income                   1   $
     projected income and expenses.                           (from Worksheet G)
             Multiply the gap in Worksheet G by an
     additional savings factor you select from the top of
     Worksheet H based on the rate of return you            Additional savings factor                                      2
     believe your savings will earn.


                                                            Additional monthly savings needed                              3   $
                                                              (multiply line 1 x line 2)




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