College Fund Work Sheet

Will you have enough saved?

1. Estimate the amount your child will need for college: ______________.

2. Determine how many years you have to reach that goal. (If your child is 7,

you have about 10 years; if he’s 2, you have 15.): ______________.

3. The value of your current college savings: $______________.

4. Use the multiplier in Chart 1 to determine the future value of your savings. To use the chart, pick the multiplier in the box that is closest to the number of years you have to your goal and the investment return you expect to earn on your money. (The closer the goal, the more conservative you ought to be with your savings--which means you should also expect to earn lower returns on your money.)

$______________(current savings) x ___________(multiplier) = $__________________(future value of your college account).

5. Compare the result from line 4 with the amount you figured you would need in line 1. If line 4 is greater than line 1, you are in good shape and likely to meet your savings goal. If it’s less, you’ll need to save more between now and then to have enough.

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How much more would you need to save each month?

Subtract the result of line 4 from that of line 1 to get your shortfall.

What your child will need: $________________--future value of your college

account: $________________ = shortfall: $________________.

6. Use the multiplier in Chart 2 to figure out how much you need to save each month to reach that goal.

Shortfall: $_____________x multiplier from chart: ____________

= monthly savings needed to reach goal: $____________.

Retirement Readiness Work Sheet

Will you have enough saved?

1. Enter a rough estimate of your monthly retirement expenses: $______________.

2. Subtract the amount you expect to receive from Social Security and/or any defined benefit pension that you may have at work. (Defined benefit pensions are the type that promise to pay a set monthly benefit for life. Your company’s employee benefit department can give you a formula to determine your retirement income from a defined benefit plan; Social Security

(800) 772-1312) can provide an earnings and benefit statement to estimate

your Social Security income.)

Your estimated monthly expenses (from line 1): $________________

- the amount you’ll have from Social Security and company pensions: $________________

= retirement Income shortfall: $_______________.

This is the monthly amount you’ll need to generate from your savings, including self-directed plans such as individual retirement accounts and 401(k)s.

3. Adjust for inflation by multiplying the result from line 2 by the appropriate figure in Chart 3.

Retirement Income shortfall: $________________x multiplier: --------------------

= inflation-adjusted monthly shortfall: $________________.

4. Can your current savings generate that amount? Estimate the future value of your savings by multiplying the current value of your retirement savings by the appropriate multiplier in Chart 1.

Current retirement savings: $______________ x multiplier: ______________

= future value of your savings: $____________.

Now, just to be safe, let’s figure that your savings will earn 6% while you’re retired and you won’t spend any of the principal. This type of assumption allows you to plan for a long retirement and gives you plenty of wiggle room, in case you find that you need to spend much more than expected for long-term care, medical expenses or other unplanned items.

5. Multiply the result from line 3 by .06 and divide that result by 12.

Future value of your savings: ($_______________ x annual rate of return 12 (months)

= future monthly income generated from current savings: $_____________.

Does the result equal or exceed the amount on line 2? If it does, you’re in good shape. If not, you need to figure out how much more to save to have enough.

How much more to save each month?

6. Multiply the amount of your monthly shortfall by 207

(the multiplier that corresponds with a 6% return,

assuming you don’t spend any principal).

The result is the additional nest egg you need to create

to generate the monthly savings you want.

Shortfall: $________________x 207 = additional required

nest egg: $___________________.

7. Take the result and multiply it by the appropriate multiplier in Chart 2 to figure out how much more you need to save each month to generate that nest egg.

Required amount: $________________ X multiplier: _______________

= additional monthly savings required: $______________

If you find you can’t possibly save enough in the time allotted, you have two options: Either figure you’ll live on less or work a few years more.

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Doing the Math Use these charts to help determine your portfolio’s status, as described in the accompanying work sheet: Chart 1: What Your Current Savings Will Be Worth

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Years to Goal Rate of Return 3% 4% 5% 6% 7% 8% 9% 10% 1 1.030 1.040 1.050 1.060 1.070 1.080 1.090 1.100 2 1.062 1.083 1.105 1.127 1.150 1.173 1.196 1.220 3 1.094 1.127 1.161 1.197 1.233 1.270 1.309 1.348 4 1.127 1.173 1.221 1.270 1.322 1.376 1.431 1.489 5 1.162 1.221 1.283 1.349 1.418 1.490 1.566 1.645 6 1.196 1.271 1.349 1.432 1.520 1.613 1.712 1.818 7 1.233 1.322 1.418 1.520 1.630 1.747 1.873 2.007 8 1.271 1.376 1.490 1.614 1.748 1.892 2.049 2.218 9 1.309 1.432 1.567 1.714 1.874 2.049 2.241 2.450 10 1.349 1.491 1.647 1.891 2.010 2.220 2.451 2.707 11 1.390 1.552 1.731 1.932 2.155 2.404 2.681 2.990 12 1.433 1.615 1.820 2.051 2.311 2.603 2.933 3.304 13 1.476 1.681 1.913 2.177 2.478 2.819 3.208 3.650 14 1.521 1.749 2.011 2.311 2.657 3.053 3.509 4.032 15 1.567 1.820 2.114 2.454 2.849 3.307 3.838 4.454 16 1.615 1.894 2.222 2.605 3.055 3.581 4.198 4.920 17 1.664 1.972 2.335 2.766 3.276 3.879 4.592 5.435 20 1.821 2.222 2.713 3.310 4.039 4.927 6.009 7.328 25 2.115 2.714 3.481 4.465 5.725 7.340 9.408 12.06 30 2.457 3.313 4.467 6.022 8.116 10.94 14.73 19.84

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Chart 2: How Much More You’ll Need to Invest Each Month

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Years to Goal Rate of Return 3% 4% 5% 6% 7% 8% 9% 10% 1 .0822 .0818 .0814 .0811 .0807 .0803 .0799 .0795 2 .0405 .0401 .0397 .0393 .0389 .0386 .0382 .0378 3 .0265 .0262 .0258 .0254 .0250 .0247 .0243 .0239 4 .0196 .0192 .0188 .0184 .0181 .0177 .0174 .0170 5 .0155 .0151 .0147 .0143 .0140 .0136 .0133 .0129 6 .0127 .0123 .0119 .0116 .0112 .0109 .0105 .0102 7 .0107 .0103 .0100 .0096 .0092 .0089 .0086 .0083 8 .0092 .0088 .0085 .0081 .0078 .0075 .0071 .0068 9 .0081 .0077 .0073 .0070 .0067 .0063 .0060 .0057 10 .0071 .0068 .0064 .0061 .0058 .0055 .0052 .0049 11 .0064 .0060 .0057 .0054 .0050 .0047 .0045 .0042 12 .0058 .0054 .0051 .0048 .0044 .0041 .0039 .0036 13 .0052 .0049 .0046 .0042 .0039 .0037 .0034 .0031 14 .0048 .0044 .0041 .0038 .0035 .0032 .0030 .0027 15 .0044 .0037 .0034 .0031 .0028 .0026 .0023 .0021 16 .0041 .0037 .0034 .0031 .0028 .0026 .0023 .0021 17 .0038 .0034 .0031 .0028 .0026 .0023 .0021 .0019 20 .00304 .00273 .00243 .00216 .00192 .00170 .00150 .00132 25 .00224 .00194 .00168 .00144 .00123 .00105 .00089 .00075 30 .00172 .00144 .00120 .00099 .00082 .00067 .00055 .00044

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Chart 3: Inflation

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Years to Goal Multiplier 5 1.159 10 1.344 15 1.558 20 1.806 25 2.093 30 2.427

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