Sample Retirement Plan
Do you have a written retirement plan?
Have you ever wondered what a retirement plan looks like?
One of the simplest ways to see what a retirement plan looks like is to do a case study. Your situation will be different but this will give you an idea of how I put together a plan for a client and the methodology I use.
Situation: Clients, Jack and Jill Hill, are both age 55.
Question: Do they have sufficient savings to retire at age 59 and live on a total pre‐tax periodic income of $50,000/year in today’s dollars?
Current Financial Situation:
- Assets: $250,000, Asset Allocation: 5% cash 45% bonds and 50% equities.
- Annual Savings: $12,000
- Annual Income during Retirement (all indexed to CPI):
- Jack: CPP: $6,144 starting at age 60, OAS: $6,096 starting at age 65 Jill: CPP: $6,144 starting at age 60, OAS $6,096 starting at age 65
- Company pension: $15,000 starting at age 59
- They also have an existing variable annuity with a guaranteed withdrawal base of $180,000, market value of $160,000. They originally invested $170,000.
Initial Results:
If you look at the summary page below, I have highlighted in yellow that the retirement plan for Jack and Jill Hill is “excellent”. You can also see that the critical red line, does not run out of money before age 95.
This client’s plan is on track
The Cash Flow Page (click to enlarge) The Variable Annuity Page (click to enlarge)
