future value of money - retirement tool

8/13/2019 Future Value of Money - Retirement Tool

1/16

BASIC EXPLANATION OF A RETIREMENT PLAN WITH

Calculator

Initial Amount Invested 30,000inputs

Annual Rate of Return(%) 10%

Years Invested 20

outputs Final Amount at Retirement 201,825

35% Net of Taxes (35%) 131,186Income Tax Rate

What can you do

with the money

at age 65

Explanations

and Suggestions

for approaching

Retirement Money

Based on common sense, where you can Invest your 30,000 dollars saved,

as a basic, 10 year, or 20 year investment alternative: In an S&P 500 Index Fund.

See S&P 500 Historical Returns in Table below. This is also called passive invest

because you simply follow an index, you dont choose a particular money mana

you choose a reliable mutual fund company that offers an index fund.

Source of Table: Historical Annual Returns For The S&P 50

X


2/16

website link to table in september 2012: http://www.istockanal


3/16

A RETIREMENT CALCULATOR

Youve saved 30,000 dollars today, and youre more or less 45 years

USD You can change the currency here, to your country s currency, it will adju

Annual percentage of amount invested generated every year. Assumes r

Assumes you start saving for retirement at age 45, until age 65, for twent

USD At age 65, you have a lump sum of $201,825 dollars, slightly more than t

USD Net of taxes, the lump sum at age 65 becomes $131,186, over one hund

from your banks checking or savings account.

This amount is a lump sum, not an annuity, for living expenses from the a

It is a lump sum accumulated over 20 years of investing 30 thousand doll

After 20 years, you reach the lump sum of 201.825, slightly more than 20

Net of Income Taxes (Final Amount at Retirement reduced by income tax

Assuming youll die at age 95, this means about $364 dollars ($131,186


Numbers are meant to be somewhat average, you can adjust to your cas

This shows the power of compound interest, over 20 years well invested,

With these numbers, you can approach an insurance company today, at

ent If you bring to them 30 thousand dollars today, what is the lump sum or a

er, The other alternative is to approach a mutual fund company such as Fide

for 20 years, seeing what historical rate of return the fund has achieved o

Index.

X Youd want to take into accou

and look at the row titled 2007


4/16

Based on cReturns av10.36% an

COLUMN

lyst.com/article/viewarticle/articleid/2803347


5/16

f age, with about 20 years until retirement. You can change this in the adjacent spreadsheet,

t the other currency cells automatically. USD stands for U.S. dollar, it is the official code used

einvestment of interest every year, also at 10%: This is compounding interest, or reinvesting in

years, and so assumes you will retire at age 65 and would like a lump sum to live off during r

o hundred thousand dollars.

ed thirty thousand dollars available to pay for living expenses during retirement, which you can

ge of 65, until you die.

ars, at 10% annual interest on that capital, the initial amount invested of $30,000 dollars, thirty

0.000 dollars

es, which you can adjust), you can then use $131,186 dollars to live off, for living expenses, af

ollars / 30 years) / (12 months per year), dollars) of monthly disposable income to pay for livin


e in the adjacent spreadsheet. You can see what your lump sum amounts to, after 20 years, in

in something like a passive index fund such as the S&P 500, Nasdaq, or Dow Jones, money g

ge 45, and see what they can offer based on your savings of thirty thousand dollars today:

nnuity they can offer, net of taxes, at age 65, and between the ages of 65 and the age you will

lity Investments or Vanguard to invest your money in an index fund (such as Nasdaq or Dow J

er 10 years, minimum 5 years, comparing it to the insurance company alternative. The rate s

nt these two columns, a twenty year average of annual returns, and an average annual return since 196

, the one that has the most recent information on average annual returns of the S&P 500.


6/16

olumns 3 and 7, of the row titled 2007, the last year of information for annual returns of the S&P 500: erage 10% or so, on average, annually, when you look at a ten year recent period, 2004, 2005, 2006, a

nual return on average, and over an average period of 20 years, the S&P 500 returns 11.81% annually.

3 COLUMN 7


7/16

titled 'Your Case'.

by FX dealers.

terest earned.

tirement.

draw every month

housand dollars.

er age 65.

expenses.

expenses.

your case.

ows well.

ie.

nes or S&P 500)

ould be 10% or so.(see table figures below)

, to 2007,


8/16

d 2007.


9/16

BASIC EXPLANATION OF A RETIREMENT PLAN WITH

Calculator

Initial Amount Invested 30,000inputs

Annual Rate of Return(%) 10%

Years Invested 20

outputs Final Amount at Retirement 201,825

35% Net of Taxes (35%) 131,186Income Tax Rate

What can you do

with the money

at age 65

Explanations

and Suggestions

for approaching

Retirement Money

Based on common sense, where you can Invest your 30,000 dollars saved,

as a basic, 10 year, or 20 year investment alternative: In an S&P 500 Index Fund.

See S&P 500 Historical Returns in Table below. This is also called passive invest

because you simply follow an index, you dont choose a particular money mana

you choose a reliable mutual fund company that offers an index fund.

Source of Table: Historical Annual Returns For The S&P 50

X


10/16

website link to table in september 2012: http://www.istockanal


11/16

A RETIREMENT CALCULATOR

Youve saved 30,000 dollars today, and youre more or less 45 years

USD You can change the currency here, to your country s currency, it will adju

Annual percentage of amount invested generated every year. Assumes r

Assumes you start saving for retirement at age 45, until age 65, for twent

USD At age 65, you have a lump sum of $201,825 dollars, slightly more than t

USD Net of taxes, the lump sum at age 65 becomes $131,186, over one hund

from your banks checking or savings account.

This amount is a lump sum, not an annuity, for living expenses from the a

It is a lump sum accumulated over 20 years of investing 30 thousand doll

After 20 years, you reach the lump sum of 201.825, slightly more than 20

Net of Income Taxes (Final Amount at Retirement reduced by income tax



Numbers are meant to be somewhat average, you can adjust to your cas

This shows the power of compound interest, over 20 years well invested,

With these numbers, you can approach an insurance company today, at

ent If you bring to them 30 thousand dollars today, what is the lump sum or a

er, The other alternative is to approach a mutual fund company such as Fide

for 20 years, seeing what historical rate of return the fund has achieved o

Index.

X Youd want to take into accou

and look at the row titled 2007


12/16

Based on cReturns av10.36% an

COLUMN

lyst.com/article/viewarticle/articleid/2803347


13/16

f age, with about 20 years until retirement. You can change this in the adjacent spreadsheet,

t the other currency cells automatically. USD stands for U.S. dollar, it is the official code used

einvestment of interest every year, also at 10%: This is compounding interest, or reinvesting in

years, and so assumes you will retire at age 65 and would like a lump sum to live off during r

o hundred thousand dollars.

ed thirty thousand dollars available to pay for living expenses during retirement, which you can

ge of 65, until you die.

ars, at 10% annual interest on that capital, the initial amount invested of $30,000 dollars, thirty

0.000 dollars

es, which you can adjust), you can then use $131,186 dollars to live off, for living expenses, af



e in the adjacent spreadsheet. You can see what your lump sum amounts to, after 20 years, in

in something like a passive index fund such as the S&P 500, Nasdaq, or Dow Jones, money g

ge 45, and see what they can offer based on your savings of thirty thousand dollars today:

nnuity they can offer, net of taxes, at age 65, and between the ages of 65 and the age you will

lity Investments or Vanguard to invest your money in an index fund (such as Nasdaq or Dow J

er 10 years, minimum 5 years, comparing it to the insurance company alternative. The rate s

nt these two columns, a twenty year average of annual returns, and an average annual return since 196

, the one that has the most recent information on average annual returns of the S&P 500.


14/16

olumns 3 and 7, of the row titled 2007, the last year of information for annual returns of the S&P 500: erage 10% or so, on average, annually, when you look at a ten year recent period, 2004, 2005, 2006, a

nual return on average, and over an average period of 20 years, the S&P 500 returns 11.81% annually.

3 COLUMN 7


15/16

titled 'Your Case'.

by FX dealers.

terest earned.

tirement.

draw every month

housand dollars.

er age 65.

expenses.

expenses.

your case.

ows well.

ie.

nes or S&P 500)

ould be 10% or so.(see table figures below)

, to 2007,


16/16

d 2007.

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