What’s Your Retirement Number #?:
MS Excel Retirement Planning
Spreadsheet
Army Community Service (ACS)
U.S. Army Garrison Rock Island Arsenal
Edition of April 29, 2013 version 4
“Uncle Jon” Cook
• Survivor Outreach Services – Financial Counselor
• Financial Readiness Program
• Personal Financial Management
(PFM) Specialist
•
Accredited Financial Counselor
(AFC)
•
Army Emergency Relief (AER)
•
Notary Public
• Employment Readiness Program
•
Military Spouse Employment Program (MSEP)
•
(Former) Professional in Human Resources (PHR) &
(Former) Certified Workforce Development Professional (CWDP)
(309) 782 - 0815
1 – 877 – 882 – 0523
jon.c.cook.civ @ mail. mil
www. riamwr. com / acs /
Disclaimer
• This presentation is for the information and education
of the participants.
• The information presented is neither an endorsement
nor a guarantee.
• Past performance is no guarantee of future
performance.
• Before making any financial commitment, consult with
your Family Members and appropriate professional
advisers.
Sequence of this Presentation
• Purposes
• The ACS Spreadsheet “philosophy”
and introduction
• Resources for your use
• PowerSave Software from
Utah State Extension Service
• Other software and web sites
• Come visit with us at ACS
Having a
Scooby Doo
moment?
Please ask
questions
as we proceed!
Sequence of this Presentation
• Purposes
• The ACS Spreadsheet “philosophy”
and introduction
• Resources for your use
• PowerSave Software from
Utah State Extension Service
• Other software and web sites
• Come visit at ACS
Purposes of this Presentation
• To provide a method to develop the amounts of
money needed to save for retirement planning.
• Illustrate that a portion of retirement funding will
be accomplished through pensions and annuities
(allowances) – and that a portion may need to be
funded from savings and investments (piles).
• Enable persons and families as a team to discuss
retirement planning figures in a logical and rational
manner.
Annuity
• An insurance instrument
• Purchased over time or at one time (lump sum)
• Payout – an income stream = an allowance
• starting at a specified time
• ending at a specified time; or upon death of the
• beneficiary [single annuity] – or
• beneficiaries [joint or group annuity]
• for a
• specific amount (fixed) – or
• variable amount (variable)
8
Annuity
• Annuities from an insurance company (e.g. Met Life) or a private
sector employer by contract
• Annuity – like (government sponsored) income streams with cost of
living increases (COLA’s), based on a formula:
• CSRS (Civil Service Retirement System)
• FERS (Federal Employee Retirement System)
• Military Retirement
• Social Security
When you die – it dies
9
Income Streams from your
“Money Piles”
Live off of the Interest Only
do not use the principal…
Slowly draw down both the
principal and the interest =
Annuitizing
10
Annuitizing
• Liquefying an asset
(e.g. a mutual fund or savings account)
• Over a specified time
• Producing an income stream from a
“$ pile”
• “… like creating your own annuity”
You could outlive your $ or your $ could outlive you …
11
Annuity
What is in your
Retirement Plan?
Allowance
Annuitizing
Money Piles
Vary the pay-out’s
Their responsibility
Your responsibility
You have less control
You have more control
Can’t outlive the money
Can outlive the money &
the money can outlive you
Can’t increase or decrease the
periodic amounts
Can increase or decrease the
periodic amounts
? Cost of Living Increases
due to inflation ?
You account for cost of living
increases due to inflation
12
What’s Your
Retirement Number #?
Time Line
of Persons
Involved
Requirement
over time
“the number” $#
Allowances
annuities, retirement plans:
Social Security; FERS /
CSRS; Military
Capabilities
to reach
“the number”
Piles
Money you
grow, and then
pay out:
TSP, 401k, IRA
Sequence of this Presentation
• Purposes
• The ACS Spreadsheet
“philosophy” and introduction
• Resources for your use
• PowerSave Software from
Utah State Extension Service
• Other software and web sites
• Come visit at ACS
Building Your Time Line
Paper or MS Excel (.xls) work sheet Page 1
Lay out your
Person(s)
Dates
Ages
Retirement options
& time frames
Financial
obligations and
options
15
Social Security Agency (www. ssa. gov)
Unisex Life Expectancy at Retirement Table
Age at
Retirement
Closest to
Year of
Retirement
17.12 Years from 2010 is the half-way point = 2027
assumes that ½ of this retirement population will die before this year (age 83);
½ of this retirement population will die after this year, some living beyond 2044 (age 100)
Retirement Requirements
MS Excel (.xls) Work Sheet Page 2
Annual Budget
over the phases
of retirement
• Go – Go
• Go-Slow
• No-Go
• Estate
Planning
17
Retirement Capabilities
MS Excel (.xls) Work Sheet Page 3
Expense
s*
Spendable
Income
Annual Income
over the phases
of retirement
• Go – Go
• Go-Slow
Ret
Center
• No-Go
• Estate Planning
Deficit!
Insurance?
Other?
18
Page 4: Capabilities by Source
“What will the piles grow to? What will the piles pay out?”
19
Retirement Capabilities
MS Excel (.xls) Work Sheet
Spendable
(Column 14)
Taxable (Columns 4 – 12)
Non-Taxable
(Column 13)
20
Retirement Capabilities
MS Excel (.xls) Work Sheet
1. Write your
timeline starting
with year of
retirement and
age(s)
Inflation (Cost of Living
Increase! [You Hope]) Factors
2. Ages
until ???
21
Retirement Capabilities
MS Excel (.xls) Work Sheet
Monthly Income
(forecasted);
Inflation factor
increase for
appropriate types
22
Retirement Capabilities
MS Excel (.xls) Work Sheet
4 & 5. Taxable Pensions
and Annuities
• CSRS (Taxable part)
• FERS
• Military
• Insurance Co.
• Annuitized Funds
• TSP
• 401k / 503b
• IRA
23
Retirement Capabilities
MS Excel (.xls) Work Sheet
6 & 7. Social
Security
(Taxable part)
24
Retirement Capabilities
MS Excel (.xls) Work Sheet
8. Work
Taxable Pensions and
Annuities
• CSRS (Taxable part)
• FERS
• Military
• Insurance Co.
• Annuitized Funds
• TSP
• 401k / 503b
• IRA
Social Security
(Taxable part)
9. Other
• Savings
• Royalties
• Rents
25
Retirement Capabilities
MS Excel (.xls) Work Sheet
10. Taxable
Income
12. After
Tax Income
11. Taxable
Rate (effective
rate for Federal
and State)
26
Retirement Capabilities
MS Excel (.xls) Work Sheet
13. Non-Taxable
Income
• VA
• Disability Payments
• Social Security (non-taxed part)
• CSRS (non-taxed part)
Roth IRA’s
•
• Life Insurance Pay-outs
27
Retirement Requirements & Capabilities
MS Excel (.xls) Work Sheet Page 3
Income
Expenses*
(carried over from
previous .xls work
sheet)
Your results over
time
28
Retirement Capabilities
MS Excel (.xls) Work Sheet
Make Adjustments
to Income over
time due to
transitions
Basic Retirement Financial Planning- Part 2
- ACS RIA
29
Retirement Capabilities
MS Excel (.xls) Work Sheet
Deficit!
Increase Ret Savings?
Insurance?
IRA?
Savings?
Other?
Basic Retirement Financial Planning- Part 2
- ACS RIA
30
How do you
know it is
accurate?
Retirement Capabilities
MS Excel (.xls) Work Sheet
OK – Now What?
Basic Retirement Financial Planning- Part 2
- ACS RIA
31
Retirement Capabilities Work Sheet
Build at least 3
“scenarios” or
“tests”
Worst Case
High Inflation
High Costs
Low Income &
Returns
Best Case
Low Inflation
Low Expenses
High Income &
Returns
Middle Case
In-between inflation and
expenses
Fair Income & Returns
32
Sequence of this Presentation
• Purposes
• The ACS Spreadsheet “philosophy”
and introduction
• Resources for your use
• PowerSave Software from
Utah State Extension Service
• Other software and web sites
• Come visit with us at ACS
www. powerpay. org
New? Sign Up Now
www. powerpay. org
PowerSave
Function
“Money Future”
Accumulating
Wealth
Withdrawing
Wealth
Accumulation Phase
1st calculate what your
money could grow to:
Pay-out Phase
- by time period
- by set amount
www. powerpay. org
PowerSave
Function
“Money Future”
Accumulating
Wealth
Potentially money growth
Impact of inflation
www. powerpay. org
PowerSave
Function
“Money Future”
Withdrawing
Wealth
Your “pile’s”
monthly payout
over 25 years = $_
Impact of
inflation
Withdraw for a
Specified Time
www. powerpay. org
PowerSave
Function
“Money Future”
Withdrawing
Wealth
If your “pile’s” monthly
payout is $350, how
long will the pile last?
Impact of
inflation
Withdraw
a Specified
Amount
www.powerpay.org
PowerPay
Debt Pay-offs
Spending Plans
Create a Budget
Free from the
Utah State
Extension
Service
PowerSave
Future Value of
Money!
Once you create your account, you can create other profiles (e.g.
family members);
or just have them create their own accounts.
Go to your profile
Create new
profiles
Yes!
PowerSave!! Got it!!!
What could possibly go wrong?
Sequence of this Presentation
• Purposes
• The ACS Spreadsheet “philosophy”
and introduction
• Resources for your use
• PowerSave Software from
Utah State Extension Service
• Other software and
web sites
• Come visit with us at ACS
Interest Vision Software
for use at Army Community Service
You fill in all but one of
the missing data elements:
it will figure out the one
missing element for you!
www. mymoney. gov
From the Dept. of the Treasury and the FTC
Basic Retirement Financial Planning- Part 3
- ACS RIA
43
Social Security Administration
www. ssa. gov
Retirement
Basic Retirement Financial Planning- Part 3
- ACS RIA
44
American Savings Education Council
(ASEC)
Calculators
www. asec. org / ballpark /
Ballpark
Estimate
Fed
Employee
Ballpark
Estimate
45
T. Rowe Price
Retirement Income Manager
– a web simulation
www. troweprice. com
Retirement
> Retirement Planning
> Retirement Income Calculator
4% Rule
Plan to withdraw no
more than 4% of your
assets the first year; in
following years draw
4% + small COLA factor
#1
Net Worth Statement
Net Worth Statement
Assets (+)
Fixed (stuff)
Liquid or Monetary
Only way to get money out of a
Fixed Asset is to sell or rent it
Liquidity!
Liabilities (-)
+ Assets
- Liabilities
= Your Net Worth
Where ever you start is OK –
start!
And make it grow from there:
“build wealth – not debt”!
It’s not the money you make; it’s the money you get to keep! – Ric Edelman
Jon Cook
Accredited Financial Counselor (AFC)
Army Community Service
Bldg 102, 1st Floor, SE corner
jon.c.cook.civ@mail.mil
(309) 782-0815 / -0829
www.riamwr.com/acs/financial-readiness