Ballpark E$timate
http://www.choosetosave.org/ballpark/
Financial Planning for Women
August 2006
Presented by Jean Lown & Tiffany Smith
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Actions or Progress to Report?
• Please share your actions, successes,
or progress resulting from FPW
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Why Plan?
• For security, comfort, peace of mind
• To be responsible
– Don’t be a burden on children or government
• Babyboomers are NOT $ prepared for long
retirements
• Poverty isn’t fun, especially in old age
• Median net worth of 75+ age cohort
(excluding home equity) = $19,000
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What is the Ballpark E$timate?
• An easy-to-use two-page worksheet
• Helps you quickly identify
approximately how much you need
to save to fund a comfortable
retirement.
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How to use the Ballpark E$timate
• Interactive (on-line)
• All of the calculations are done for you
• You just enter the numbers
• Need to be on-line
• Non-interactive
• print the sheets from the web site
• fill in data & do the calculations on your
own.
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Data Needed for the
Ballpark E$timate
• Current income
• Amount of pension
– Contact HR office
• Age & expected longevity
• 401(k), IRA balances
– Planning for a Secure
Retirement module 1
• Estimated Social
– http://www.livingto100.com
Security benefits
• Planned retirement age
– From annual statement
• Percent of income to
• Other retirement income
replace in retirement
– Work?
• Health care in retirement
– Rental income?
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Social Security
• Annual S.S. statement (via mail)
• Full Retirement Age (FRA) no longer 65!
– persons born 1943-54: 66 years
– 1955-1959: 66 + 2, 4, 6, 8, or 10 months
– persons born 1960 & later: 67 years
• 62 is earliest age for SS retirement
• Benefits are permanently reduced for early
retirement
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Decisions…
• Percent of income to be replaced
– How much of your current annual income will
you need in retirement?
• 70% or higher
• living on a lot less in retirement isn’t what most
people want
• Health & long term care costs are the BIG unknown
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More Decisions…
• How long are you likely to live?
– Based on family history and health how long do
you expect to live?
– Web-based longevity calculators
• Planning for a Secure Retirement
http://www.ces.purdue.edu/retirement/
• http://www.livingto100.com
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Tips for Couples
• Each spouse should fill out own worksheet
– Divide joint assets
• each $ resource can be used only once
– If one spouse’s SS benefit is less than 50% of
other spouse’s; increase the lower annual
benefit to 50% of higher earning spouse’s
• If John $12,000; Mary $4,000
– Increase Mary’s benefit to $6,000 (50% of spouse’s)
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What % of Income?
• When determining your goal, you need to
think about the type of lifestyle you would
like in retirement.
– Do you want the cruise-of-the-month retirement
or are you planning to spend your time in the
garden?
• Plan on health care (LTC) costing far more
than you can imagine!
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Planning Jane’s Retirement
• http://www.choosetosave.org/ballpark/
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Ballpark E$timate
• Note the title: a rough estimate
– Re-calculate each year
– Individuals with less than 10 years
from retirement need more than an
estimate. They need a comprehensive
plan based on their individual situation.
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More detailed on-line calculators
• Monte Carlo simulation estimates a range of
likelihoods of outliving your resources
– http://www.moneychimp.com/articles/volatility/montecar
lo.htm
• http://www.dinkeytown.net/
• Mutual fund companies
– http://www.troweprice.com
– http://www.vanguard.com
• Personal finance magazine websites
– http://www.kiplinger.com
– http://money.cnn.com/magazines/moneymag/
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Useful Resources
• AnalyzeNow.com
– inexpensive retirement planning tools
– to better educate people about the realities of
retirement planning
• Planning for a Secure Retirement
– On-line course to help you plan your retirement
– http://www.ces.purdue.edu/retirement/
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Questions?
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September 13 FPW
• Taking the Mystery out of Retirement
Planning
– Targeted at persons about 10 years from
retirement BUT suited for all ages
– Free 60 page workbook for each
participant
• College of Education & Human
Services month
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