+1 862 207 3288 Investment Adviser
John Doe, 23 years young newly graduated engineer just got a job in major Aerospace Co. Human resources told him that he could join the
company’s 401K Plan, and his contribution can’t exceed $14’500 per year. But if he maximizes his contribution and invests 15 % of his
gross annual salary, then company will match every dollar of with $0.50. He is paid $30 per hour and he gets a 3% raise every other year,
after 20 years of work he is laid off. Roth IRA is $5000 per year during this period. (Age23-42)
He finds another job with an annual salary of $120’000 per year and works till his retirement (43-67). The new company doesn’t have a
retirement plan and he can only save in his Personal IRA $15’000 per year on the average. During second half of his career the salary
increase is only 5% every three years and there are no medical benefits either.
John was assuming that at retirement he has paid off his mortgage and he doesn’t have major consumer debt and based on today’s buying
power he only needs $3’000 to live well.
For this project you are required to examine:
1. How much money he needs to retire at any age, if his life expectancy is 95 years.(Needs Analysis)
2. How much money he would have at retirement from age 47-67? (Accumulation Phase)
3. Does he ever run out of money during retirement at age 67 or he has a legacy. (Withdrawal Phase)
4. What should he do if he wants to retire early? (Roth IRA account)
5. At what age he can take early retirement and how much he has at his early retirement age? Examine at least 3 different years.
6. Research and use the funds that their performance is above 10% and 8% during accumulation and withdrawal phase respectively. (Show
source)
7. Must use Ms-Excel to show work. You are required to show all your work and make valid assumptions. Round up your no’s.( zero
decimal)
Accumulation Points
1st Job 2
Raise 1
2nd Job 2
Roth IRA 2
Need Analysis 2
Withdrawal 2
Retiring @ 55
2
Retiring @ 56
2
Retiring @ 67
2
Fund Research 3
Total 20
