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Ridenour Group Case Study

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The Golden Years, the time for stress free enjoyment of life supported from years of careful planning. The Ridenour group strives to provide clients with sound retirement consulting so you can enjoy the fruits of your successful career. The Ridenour group is pleased to provide the following review of Benedict’s retirement. We have built a savings model based upon the following parameters:

Parameters
Current Year 2016
Current Age 37
Current Retirement Savings $259,000.00
Annual rate of return on savings 4%
Current Salary $145,000.00
Annual salary increase 2%
Annual Contribution, % of Salary 6%
Expected retirement age 65
Annual expense after retirement $90,000.00
Rate of Return on savings after retirement 3%
Income tax postretirement 15% …show more content…

This will be addressed in our second model, Retirement Withdraw Spreadsheet on page 3. This model focuses on the estimated funds needed for living expenses with an adjustment for expected inflation. Based on inflation, expenses, and the income tax rate the withdraw model shows Benedict running out of funds when he reaches age 78. As in our first model this spreadsheet has been expanded beyond the desired regiment age to estimate continued shortfall in Benedict’s savings plan.

Future return on savings is important to retirement accounts. As indicated in the Retirement Savings Spreadsheet, retirement age can impact the longevity of the funds. Delaying retirement each year will aide in the growth of the retirement savings and extend the period of time the funds will last. Additionally the amount of additional investment to the account can further impact the longevity of the funds. Currently there is an allowance of up to $16,000 a year pretax that can be added to the savings. The chart below outlines the impact of delay in retirement age and additional pretax contribution.

As you can see, increasing the additional contribution and deferring the retirement age can significantly expand the longevity of the retirement

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