# FIN W3D

Please respond to the following discussion topic. Your initial post should be a minimum of 300 words in length. Then, make at least two thoughtful responses to your fellow students’ posts.Project your Social Security benefits at the organization’s website. Many retirement plans suggest that you should create a lump sum of cash to generate enough interest income equal to about 80% of your current income. Calculate how much money you would have to save each month from now until retirement in order to achieve a lump sum large enough to yield interest income equal to 80% of your current income. How much would you need to save each month? Let’s discuss.If you would like some help with the time value of money calculations, Excel can be a very handy tool.
The site below provides instructions on how to do time value of money calculations in excel:http://support.content.office.net/en-us/coach/excelcoach_FV_PartI.html

Henry Guzman
Looking at this week’s discussion, I am ashamed at saying that I have started late into my savings and investments. I joined the Army 16 years ago and have active duty since, but not once have invested in the Thrift Savings Plan, which many of you know what it is. I have started now, but I still have a good amount of years to go in the Army before I call it quits.  I am about to be 38 years old, and looking at the base percentage of return on the website of 5%, if I want to retire with my goal of \$1.5 million, I need to be putting away \$1500.00 monthly based on the website calculation, which I enjoyed doing since it allowed me to play with different numbers. I still have 29 years left before the retirement age of 67.  These numbers are completely based off what I approximately make stationed here in southern California and its high cost of living.
I also plan on retiring from the Army which will provide a pension of approximately \$2,500 monthly, not to include any disability claims, which I cannot yet guess how much, if any, I will receive, but to be modest, around \$2000.00 monthly, which will provide a retirement income without Social Security of roughly \$4500.00 gross income, or, \$54,000 annually.  Should I reach my goal of \$1.5 million by the age of 67, I could be receiving about \$4,300 from social security, or 51, 724 annually. Coupled with my Army retirement, I should be receiving about \$8K monthly, after taxes.  But who knows, many things could happen that could prevent this outcome, and one must be prepared to overcome obstacles.  If my calculations are correct, then this is what it’s looking like for me.
I do keep my physical fitness in priority list, so I do think that I will live at least to be 85 years old.  I will have about 18 years of good living and enjoying the rest of my life not worrying about any money issues.
I do have a house and mortgage at the moment, but throughout my career, I have travelled to other countries and even got married in the Philippines.  While I have been traveling to the Philippines for many years now, I have learned that the US Dollar goes a long way there. So, for my retirement, I also plan on living in the Philippines with my wife and have our own business, which will help generate profits in the long run.  Living there should reduce the high cost of living and allow me to enjoy my hard-earned money to the fullest.

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Shauna Lawrence
The concept of time value of money is one that not only applies directly to business and investments, but to personal finances as well. This concept is one that many people, myself included, have a difficult time understanding and practicing. In regards to investments and preparing for retirement it is important to understand the values, purposes, and applications of the various types of time value of money calculations. For example, it is important to understand if you are looking to solve for the value of money right now, which is looking for the present value, or if you are looking at the value of money in the future, hence future value. The other key part I find important to understand is how the cashflow is contributing to the money value. Is this a lump sum, like a chunk of money you earned doing a side job, or is it from an annuity, a consistent monetary contribute? These are all important attributes when looking at your personal finances and in the case of this problem, understanding your retirement situation. I personally am not a finance person, I have a very knowledgably and well trusted advisor who has been handling my estate since I was 18. Now that I am 31 (almost 32) I find it more and more important that I fully understand the concepts myself. I find that understanding these applications will help me make more informed choices in investments and spending habits.
At my age I am starting to believe that Social Security will not necessarily be around for my retirement. That concept alone is terrifying. What that means is that I should theoretically be planning on contributing extra to my personal retirement funds to account for the difference. Well that is easier said than done. My financial advisor suggests that for me to continue my lifestyle as is I need to retire with 3 million set aside. According to the Retirement Estimate on the official website of the U.S. Social Security Administration, I will be expected to reach “full” retirement age at 67. That is another 35 (I am rounding to my nearest birthday) years of working and contributing to my future valued retirement funds. As it stands, my monthly benefits from Social Security will be roughly \$2,500 a month starting at age 67 and according to the govrenment’s life expectancy, I should have 21 years of life after full retirement. That is \$630,000 that I could (most likely won’t happen) expect to receive from Social Security during retirement or \$30,000 annually. While using smartasset (Best Retirement Calculator, 2019) to predict the amount that I should be contributing around \$1,700 a month. Meaning, I need to contribute about \$500 more than I currently am to set my self up for a potential retirement.
Sources:
Best Retirement Calculator (2019) – See How Much You’ll Need. (n.d.). Retrieved from https://smartasset.com/retirement/retirement-calculator#EzOl3ZbHza.

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