11/17/22, 11:00 AM Print Preview
https://ng.cengage.com/static/nb/ui/evo/index.html?deploymentId=5994142305022023695824496950&eISBN=9780357131824&id=1635156320&sna… 1/2
Chapter 10: Spreadsheet Models Case Problem Retirement Plan Book Title: Business Analytics Printed By: Jigar Jitendrak Patel ([email protected]) © 2021 Cengage Learning, Cengage Learning
Chapter Review
Case Problem Retirement Plan
Tim is 37 years old and would like to establish a retirement plan. Develop a spreadsheet model that could be used to assist Tim with retirement planning. Your model should include the following input parameters:
Tim’s current age = 37 years
Tim’s current total retirement savings = $259,000
Annual rate of return on retirement savings = 4%
Tim’s current annual salary = $145,000
Tim’s expected annual percentage increase in salary = 2%
Tim’s percentage of annual salary contributed to retirement = 6%
Tim’s expected age of retirement = 65
Tim’s expected annual expenses after retirement (current dollars) = $90,000
Rate of return on retirement savings after retirement = 3%
Income tax rate postretirement = 15%
Assume that Tim’s employer contributes 6% of Tim’s salary to his retirement fund. Tim can make an additional annual contribution to his retirement fund before taxes (tax free) up to a contribution of $16,000. Assume that he contributes $6,000 per year. Also, assume an inflation rate of 2%.
Managerial Report
Your spreadsheet model should provide the accumulated savings at the onset of retirement as well as the age at which funds will be depleted (given assumptions on the input parameters).
As a feature of your spreadsheet model, build a data table to demonstrate the sensitivity of the age at which funds will be depleted to the retirement age and
11/17/22, 11:00 AM Print Preview
https://ng.cengage.com/static/nb/ui/evo/index.html?deploymentId=5994142305022023695824496950&eISBN=9780357131824&id=1635156320&sna… 2/2
additional pre-tax contributions. Similarly, consider other factors you think might be important.
Develop a report for Tim outlining the factors that will have the greatest impact on his retirement.
Chapter 10: Spreadsheet Models Case Problem Retirement Plan Book Title: Business Analytics Printed By: Jigar Jitendrak Patel ([email protected]) © 2021 Cengage Learning, Cengage Learning
© 2022 Cengage Learning Inc. All rights reserved. No part of this work may by reproduced or used in any form or by any means - graphic, electronic, or mechanical, or in any other manner - without the written permission of the copyright holder.

Get help from top-rated tutors in any subject.
Efficiently complete your homework and academic assignments by getting help from the experts at homeworkarchive.com