Your Retirement Savings Goal - Coach Young Math

Your Retirement Savings Goal

The first of three steps in planning for your retirement is choosing a retirement savings goal. For this activity, use the retirement calculator provided by Nerdwallet to investigate the following scenarios.

investing/retirement-calculator

Scenario 1: Patricia - Earns the median salary for a museum curator, $50,000. - Is 40 years old and hasn't started saving for retirement yet. - Would like to retire at 67, when she could receive full Social Security benefits. 1. If Patricia decides she can set aside 10% of her salary in saving for retirement:

a. How much will she need in retirement?

b. How much will she have at age 67?

c. How short is she in her savings?

2. If Patricia increases her saving rate to: (Hint: Click on "Optional" in the left-hand side.) a. 15%, how short will she be?

b. 20%, how short will she be?

c. What percent must she save from her current income to meet her recommended retirement goal?

d. What might be challenging about meeting the saving rate needed in part F?

3. If Patricia delays retirement for 3 years, and waits until she's 70: a. How short would she be with a 10% savings rate?

b. What percent does she have need to save to meet her recommended retirement goal?

c. Why is it so difficult for Patricia to meet her retirement savings goal?

Scenario 2: Amy - Earns the average salary for a clinical psychologist 5-10 years into their career, which is $75,000 - Is 28 years old and hasn't started saving for retirement yet. - Would like to retire at 67, when she could receive full Social Security benefits. 4. If Amy decides she can set aside the recommended 15% of her salary in saving for retirement:

a. How much will she need in retirement?

b. How much will she have at age 67?

c. How short is she in her savings?

d. What percent of her salary must Amy put away to meet her savings goal by age 67?

e. How much money, per month, is Amy saving using the plan in Part D?

5. If Amy determines she just can't save the amount in Part E above and resets to a 15% saving rate: f. How else could Amy make sure she meets her retirement goal? [She can't change the past.]

g. What might be challenging about this plan in Part F?

Scenario 3: Jennifer - Earns the starting salary for a marketing specialist, which is $45,000 - Is 22 years old, just graduated from college, and wants to start saving for retirement - Would like to retire at 67, when she could receive full Social Security benefits 6. If Jennifer decides she can set aside the recommended 15% of her salary in saving for retirement:

a. How much will she need in retirement?

b. How much will she have at age 67?

c. Should she save less than 15% each month? Why or why not?

7. Amy and Jennifer are discussing their retirement goals. With the same 15% savings goal, why does Jennifer have more than enough and Amy comes up short?

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