p reparing for a w onderful r etirement by courtney courter me at

PREPARING FOR A WONDERFUL RETIREMENTBy Courtney CourterEmail me at courtneymarie@comcast.net

OVERVIEW

FACTORS TO CONSIDER At what age do you start your new career? How many years will you work until retirement? What average inflation rate do you expect over

your working career? What savings rate do you expect to get on your

money saved? How many years beyond retirement do you

expect to live? What is your starting salary equivalent value at

the time of your retirement? How much do you have to save annually (until

retirement) such that the amount saved at the time of retirement will provide an annuity for the number of years you expect to live beyond retirement (at which time the amount saved is drawn down to zero)?

AT WHAT AGE WILL I START MY CAREER ?

Career: Pediatrician

Source: http://www.ruralmedicaleducation.org/age_divisions.htm

AT WHAT AGE WILL I RETIRE Average Retirement of physician: >50 I hope to retire at age 66

Source:http://pediatrics.aappublications.org/cgi/content/abstract/125/1/158

WORKING YEARS

CONSIDER

Sources:Inflation - Savings rate - Life Expectancy -

Stating Salary

MINIMUM AMOUNT YOU ARE WILLING TO RETIRE ONSalary equivalent = (Starting Salary)*(1 +

i)n

   “i” = inflation rate

“n” = number of years until retirement.(target annual retirement income)

(100,000)*(1 + 0.0215)39 = $229,243.20

CALCULATING FUTURE VALUE

“pymnt” = amount you save each year (the same amount for each year) “i” = interest rate you expect to get for your money over the entire saving

period (your career)“n” = the number of years you will work

FV pymnt *1 i n 1

i

(229,243.20)*((1 + 0.055)39 – 1 / 0.055)

=29,466,033.09Source: Rate

CALCULATING ANNUITY

“FV” = Future value “i” = interest rate you expect to get for your

money over the entire saving period (your career)

“k” = the number of years you expect to live beyond 70

Annuity FV * i1 1 i k

29,466,033.09*((0.055)/(1-(1+0.055)) -14 )

=$120,141.80

RESULTS – SALARY AND SAVINGS

The sooner you start saving the less you will need to save to meet your annuity. If you

wait long you will need to save much more

RESULTS – PERCENT SAVINGS

The percent of your salary you need to save increases the longer you wait to start saving

WHY IS IT SO IMPORTANT TO START SAVING NOW ?You want to make the most of your

retirement If you save early you will have money

to travel when you retireYou will have money to go out to eat

and vacation

MAINTAIN STABILITY

SOURCES http://www.ruralmedicaleducation.org/

age_divisions.htm https://pooledmoneyinvestmentboard.com/

Monthly_Rate_Comparison.pdf http://www.westegg.com/inflation/ http://www.bankrate.com/calculators.aspx http://en.wikipedia.org/wiki/

List_of_countries_by_life_expectancy http://pediatrics.about.com/cs/

pediatriccareers/a/pedi_interview_2.htm http://pediatrics.aappublications.org/cgi/

content/abstract/125/1/158