In: Finance
Create an Excel spreadsheet that projects your savings balances every year until retirement, and the income you can generate in retirement from your savings.
Include columns for 1. years; 2. savings balance; 3. investment returns; 4. annual new savings (investment) from your salary. Note that each year's balance equals the prior year's balance plus investment returns, plus additional savings. See below:
Interest Rate | 5.00% | ||
Annual Savings | 6,000.00 | ||
Year | Balance | Returns | Annual Savings |
2020 | 500.00 | 25.00 | 6,000.00 |
2021 | 6,525.00 | 326.25 | 6,000.00 |
2022 | 12,851.25 | 642.56 | 6,000.00 |
: | : | ||
[Retirement Year] | 770,734.57 | ||
Retirement Annuity | 50,137.39 |
In order to plan this retirement project , we do the following operations,
The Retirement chart is constructed in excel as per the required coloums
Years |
Savings Balance / BALANCE |
Investment returns |
Annual New Savings (Investment) |
Closing Balance |
The Balance in the opening was 500 and the returns are calculated on a 5% apr as has been given
Investment returns
Formula =B3*$B$1
Annual Savings is fixed at 6000
Closing Balance
Closing balance is given as the sum of all the components
=B3+C3+D3
The Retirement plan is as follows
Return |
5% |
|||
Years |
Savings Balance / BALANCE |
Investment returns |
Annual New Savings (Investment) |
Closing Balance |
2020 |
500 |
25 |
6000 |
6525 |
2021 |
6525 |
326.25 |
6000 |
12851.25 |
2022 |
12851.25 |
642.5625 |
6000 |
19493.8125 |
2023 |
19493.8125 |
974.690625 |
6000 |
26468.5031 |
2024 |
26468.50313 |
1323.425156 |
6000 |
33791.9283 |
2025 |
33791.92828 |
1689.596414 |
6000 |
41481.5247 |
2026 |
41481.5247 |
2074.076235 |
6000 |
49555.6009 |
2027 |
49555.60093 |
2477.780047 |
6000 |
58033.381 |
2028 |
58033.38098 |
2901.669049 |
6000 |
66935.05 |
2029 |
66935.05003 |
3346.752501 |
6000 |
76281.8025 |
2030 |
76281.80253 |
3814.090126 |
6000 |
86095.8927 |
2031 |
86095.89265 |
4304.794633 |
6000 |
96400.6873 |
2032 |
96400.68729 |
4820.034364 |
6000 |
107220.722 |
2033 |
107220.7216 |
5361.036082 |
6000 |
118581.758 |
2034 |
118581.7577 |
5929.087887 |
6000 |
130510.846 |
The target retirement balance of 770,734.57 was calculated in the Retirement year 2060 as follows
2058 |
649450.0134 |
32472.50067 |
6000 |
687922.514 |
2059 |
687922.5141 |
34396.12571 |
6000 |
728318.64 |
2060 |
728318.6398 |
36415.93199 |
6000 |
770734.572 |
Excel
Hence the retirement plan is constructed with the excel as follows