Cash Flow Retirement Calculator

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Cash Flow Retirement Calculator Powered By Docstoc
					CASH FLOW CALCULATOR TOOL 
This tool has been designed to demonstrate the estimated effect to cash flow due to the change in pay 
schedule for Academic Year (AY) Faculty and Staff. 
 
Its purpose is twofold:   
          1) To illustrate changes to cash flow based upon user input of key factors,  
          2) To assist the user in estimating the amount of savings necessary to sustain desired cash flow 
          during non‐pay or partial pay months. 
 
This tool will assist in estimating Net Pay and Savings scenarios; results will vary depending upon 
individual estimates of tax burdens and deductions.  All results derived from using this calculator are 
strictly estimates; actual net payments received by individuals will vary. 
 
INSTRUCTIONS FOR USE OF CASH FLOW CALCULATOR: 
 
STEP 1:  Enter your AY Salary 
Enter the annual salary amount; this must be the annual salary amount, not the monthly rate of pay.  
This would be the annual salary rate (also referred to as FTE salary rate) multiplied by the percent time 
employed. 
 
STEP 2:  Enter Tax/Deduction % 
Enter the anticipated total percentage (%) that will be deducted from gross pay for tax withholdings, 
retirement deferral deductions, insurance premiums, and other miscellaneous deductions.   
 
A base percentage to consider using might be 37%; this would include approximations for taxes and 
retirement.  This is only an estimated number, keep in mind that each personal situation will vary and 
may include any of the following items.  Most individuals will have deductions for the following taxes: 
Social Security (6.2%), Medicare (1.45%), Federal (20%), and State (4.35%).  Most individuals will also 
have retirement deductions for Mandatory Base (5%); others may have supplemental retirement 
deductions as well.  In addition, an individual may or may not have additional deductions for other items 
such as DCSA (Dependent Care Spending Account), HCSA (Health Care Spending Account), Insurances 
(Medical, Dental, Life, Long Term Care, Accident, Vision), Parking Fees, Charitable Contributions (United 
Way, Development Fund), Dues, Court‐Ordered Deductions or Tax Levies. 
 
STEP 3:  Enter Desired Savings 
Enter the dollar value of desired savings; this is the total amount needed to sustain desired cash flow 
during non‐pay and partial pay months.  This amount will vary according to each individual’s personal 
situation and needs. 
 
If a steady cash flow over the 12 month period is desired, then a general rule of thumb is to set aside 
25% of Net Pay from the full pay months (September‐April).  Total Desired Savings = Net Pay x 25% x 8 
Full Pays. 
 
STEP 4:  Analyze Results 
Review results obtained based upon user input of key factors.  Determine actions to take based upon 
results.  Actions may include: change to key factors, set up of savings plan, etc. 
 
                                                          CASH FLOW CALCULATOR
                                                                                                                                  Savings
   Step 1                                                    Step 2                                                              Withdrawal
                                                                Enter Tax/                                                       Schedule
     Enter Your                                                                                            *see note                                  MAY
     AY Salary                                                 Deduction %
                                                                                                                                                      JUNE
                                                                                                                                                      JULY
                                                                                                                                                     AUGUST
   Step 3
                                                     Savings should approximate amount desired to sustain cash flow for
     Enter Desired                                   months without full pay (May,June,July,Aug). A general rule of thumb
      Savings                                         is to set aside 25% of Net Pay from full pay months (Sept - April).
                                                                Total Desired Savings = Net Pay x 25% x 8 pays



            Estimated Cash Flow Based Upon Entries
Calendar       Payroll Date         Estimated          Estimated          Estimated          Savings          Estimated            Savings       Total Estimated
  Year       actual pay date is    GROSS Pay           Taxes and          NET PAY            Deposit           NET PAY           Withdrawal      CASH received
            dependent upon last (includes August         Other           (from which      (amount being      (after desired    (from personal      by Employee
              working day of       of following       Deductions*      desired savings     set aside for        savings        savings plan or    for Pay Period
                  month.          contract year)                           is drawn)        later use)         deducted)       MSUFCU plan)
  2010                    Aug/31
                          Sep/30
                          Oct/31
                          Nov/30
                          Dec/31
  2011                    Jan/31
                          Feb/28
                          Mar/31
                          Apr/30
                          May/31
                          Jun/30
                           Jul/31
                          Aug/31




*NOTE: A base assumption of 37% would approximate taxes and base retirement (Social Security 6.2%, Medicare 1.45%, Federal 20%, State 4.35%,
Retirement 5%). Employee should factor in any other appropriate deductions such as: Supplemental Retirement, Health Insurance Premiums, etc.

This calculator is provided to assist in estimating Net Pay and Saving scenarios. The results will vary depending on your individual estimates of tax burdens and
deductions. The CASH received by an employee is ONLY an estimate; ACTUAL net payments will vary by individual.

				
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