Retirement Planning

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Report and then analyze your results of “How much will you need for retirement?

To begin this paper, I had to determine at what age I would want to retire and how long I

expected to live. I used my current age along with the hopes of retiring by the age of sixty five.

Then based on the female lie expectancy of my family, I opted to hopefully live till eighty years

of age. That will leave fifteen years after retirement and death that I will have to survive.

According to the calculator provided to us for this project, I will need 2.0 million or $697,404 in

today’s dollars. That is a little less than $50,000 a year for fifteen years that I will need to reach

my retirement goals effectively. In the calculator provided, we had an option to add expected

social security received. I did not select any amount for this option giving the current status of

the economy. I did not want to factor in that I may receive $20,000 in social security if there may

be none available for me at sixty five.

Compose an asset allocation that is right for you to meet your retirement goals.

Using the calculator that was provided for us to do this portion of our assignment advised

me of four different allocations that would work for me based on the goals and criteria I have for

my future. My criteria are that I have twenty or more years to achieve my retirement goal. I am

of high risk tolerance and have some flexibility. I am liable however to sell off my stock in an

attempt to purchase more.

My allocation shows my pie chart as a lump sum of my assets will be large cap stock.

Fifty percent of what I will need to fund my retirement will come from this transaction. A large

cap stock is “a company that has a market capitalization valued at more than $10 billion (N.A.

Large Cap, 2012).”

My allocation shows my pie chart as a portion of my assets will come from a small cap

stock. Twenty percent of what I will need to fund my retirement will come from this transaction.

A small cap stock references smaller companies. “They generally have smaller market

capitalization that is between $300 million and $2 billion (N.A. Small Cap, 2012).”

My allocation shows my pie chart as a portion of my assets will come from foreign.

Twenty percent of what I will need to fund my retirement will come from this transaction as

well. This is a great opportunity for me to take advantage of stock in a growing economy other

than the United States

My allocation shows my pie chart as a portion of my assets will be from bonds. Only ten

percent of what I will need to fund my retirement will come from this transaction. A bond is still

considered a loan but if used correctly can net me a return.

Analyze the risk and return issues with your retirement plan.

With any investments the risk can as quickly as the return can. Breaking my plan down

into each of the four categories that the allocation calculator provided for me is the best way to

analyze each one’s own risk and return.

As I stated earlier, a large portion will come from Large Cap Stock. Some examples of

corporations that are classified as large cap stock would be “Monster Beverage Corporation,

Microsoft Corporation and Apple Incorporated (N.A. 2012. MSN Money).” According to MSN

Money, both “Monster Beverage Corporation, Microsoft Corporation currently have the highest

Stock Scouter rating which is a ten (N.A. 2012. MSN Money).” While Apple Incorporated is the

second using the Stock Scouter rating which is a nine (N.A. 2012. MSN Money).”

For the large cap stock, the risk associated can be variable. The large cap stocks have a

tendency to produce smaller returns. The return is that this stock is classified as a “good place to

start your retirement because of its reliability (N.A. 2012. Yahoo Finance.).”

As I stated earlier, a twenty percent portion will...
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