Retirement Calculation
Activity Description
This engaging worksheet helps students forecast their retirement savings needs based on their current age and annual expenses. Through this activity, students will understand the importance of starting early and saving regularly for a secure financial future. Key assumptions include a retirement age of 67, life expectancy of 95, and a 4% growth rate on savings after accounting for annual expenses during retirement.
Objectives:
- Understand Retirement Savings: Students will learn how to calculate the amount they need to save for retirement based on various factors.
- Impact of Starting Early: The worksheet demonstrates how starting to save early can significantly reduce the monthly savings needed to reach retirement goals.
- Use of Financial Tools: Students will use a retirement savings calculator to adjust variables and observe the effects on their required monthly savings.
Activities:
- Input Variables: Students will choose their current age, current annual expenses, the age at which they start saving for retirement, and the amount saved per month.
- Savings Projection: The worksheet will project the value of their savings at the retirement age of 67.
- Scenario Analysis: Students will use the calculator to see how different starting ages for saving affect the required monthly investment.
Learning Objective
The objective of this activity is to enable students to understand and plan for their retirement by forecasting their savings needs based on their current age and annual expenses. By experimenting with different starting ages and monthly savings amounts, students will learn the importance of starting early, the impact of compounding interest, and how to achieve their financial goals for retirement.
Following is a screenshot of the calculator
Students will be given different scenarios to find the minimum amount to be saved every month for successful retirement -
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