Retirement #2 With Long Term Care – Version 04.2003b

All Data Entry cell characters are shown in red.

This retirement calculator is for someone who is already retired since there is no accumulation phase. In this calculator one can evaluate how long your assets will last under several different income levels.

Data Entry:

Investment Assets: Enter here the money in your retirement investment portfolio.

Rate of Return: This is the earnings rate assumed on your savings plan investment.

Current Year: Self-Explanatory

Current Age: List your current age. If completing this form for a couple, enter the younger age.

Long-term care section:

You can choose to cover LTC costs "out of pocket" or you can elect to purchase LTC insurance to cover the costs. This section allows you to illustrate the effect of long term care (LTC) costs on your investment portfolio. All amounts entered in the LTC section are assumed to be paid out of your investments. If you have purchased LTC insurance you can indicate the annual premium in this section. If this is done, choose 0% in the cost of living section for LTC costs. This will keep the premium level through time. If you do not have LTC insurance then you will need to assume that if LTC is needed, you will cover the cost from your investments.

Annual Cost (Today's Dollars): Enter here the assumed annual LTC costs in today’s dollars.

Assumed Age to Begin Costs: Enter the age at which you assume LTC costs will begin.

Assumed Age to End Costs: Enter the age at which you assume LTC costs will end.

Annual Pension Income: List here the combined total money currently being received from any pension plans. Also indicate the inflation assumption or annual cost of living assumption.

Ann. Social Security: Note here your combined annual social security income, along with any inflation or annual cost of living increase.

Earned Income: In this column list any assumed earned income with any anticipated cost of living factor. Also list the beginning and assumed ending age for earned income.

In the far right column you will specify the target income (in today’s dollars) from all income sources. The model then considers all fixed income sources first and calculates the portfolio withdrawal as a residual amount needed to bring the income level up to the income target. All long term care costs entered in this model are also withdrawn from the investment portfolio.