Lab 3 Time Value Of Money (docx) - Course Sidekick (2024)

TEMPLE UNIVERSITY COLLEGE OF ENGINEERING ECE 0822INVE$TING FOR THE FUTUREMR. LAVIOLA COMPUTER EXERCISE 3 1.Which investor had the highest balance when they turned 65 in this example? Chris had the highest balance when they turned 65. At the age of 65, Chris's retirement account balance was around $782,454.93, which was greater than Susan and Bill's amounts. 2.How are the actions of the three investors similar? How are they different? Every year, Susan, Bill, and Chris each save $5,000 for retirement. However, because everyone begins and save at various times, they end up with different amounts of money for retirement. 3.Susan invested $50,000 and Bill invested $150,000. Why did Susan have a higher balance at the age of 65? Susan had a larger balance at the age of 65 because she began saving at the age of 25 and continued for ten years, giving her investments 40 years to increase. 4.What important piece of information is missing from this graph? An important piece of information that is missing from the graph is what they invested in 5.Using the data above, summarize an argument for why you should start investing when you are young. Investing money when you're young is a great decision because it allows your money to grow for a longer period. In the previous example, Susan, who began investing early, ended up with more money at age 65 than Bill, despite putting in less money each year. This shows that starting to invest early can help you save significantly more for retirement. 6.What percentage of millennials have $100,000 or more invested for retirement? 3.5$ 7.How does the fraction of millennials with at least $100,000 in retirement compared to the portion of millennials who have no retirement savings? They have less things save 8.Summarize how the amount invested for retirement compares across the three age groups. The amount invested in retirement throughout the groups slowly increase. 9.Explain why the percentage of people with $300,000 or more increases so substantially across the age groups.

TEMPLE UNIVERSITY COLLEGE OF ENGINEERING ECE 0822INVE$TING FOR THE FUTUREMR. LAVIOLA COMPUTER EXERCISE 3 It is because over time from the boomers- millennials, the price of things have increase and change to therefore the $300k would be higher for the boomers than the other group 10.72% of millennials have between $0 and $9,999 invested for their retirement so far. Why is this a potential problem? It is a problem because significant portion of this generation is likely to face financial insecurity and a lower standard of living in their retirement years. 11.If you begin investing at age 25 instead of age 20, how much more do you need to invest month to have $1M at retirement? You need to save 140 more per month. 12.Why might some 20-year-olds have difficulty investing $360 per month for retirement? They may be in college and have no income, they may work in a low-paying job, they may work part-time. 13.If you begin investing at age 45 instead of age 40, how much more do you need to invest per month to have $1M at retirement? Why is this amount so much greater than the difference between 20 and 25? You need to save at least $718 because you are older and close to retirement, so you need to spend more. 14.If you wait until you're 45 to begin investing, how much money will you need to invest, just for retirement, per year? Why might this be difficult? at least $2153, because This might be difficult because of living expenses, you may have kids and that will cost a lot of money. 15.Using the data in graphs II and III, how much will most millennials need to begin investing, per month, to have $1M in retirement? Explain your answer. you need to save 500-$600 to reach 1 million in retirement 16.Now that you've analyzed these three graphs, list at least 4 things you have learned about investing for retirement. 1- The more money you save when you're younger the more you gain by retirement 2-be consistent 3- spend less save more 4- invest your money

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Lab 3 Time Value Of Money (docx) - Course Sidekick (2024)

FAQs

What percentage of millennials have $100,000 or more invested for retirement? ›

The fraction of millennials with at least $100,000 in retirement is significantly less than the portion of millennials who have no retirement savings. 42.2% of millennials have no retirement savings while only 10.6% of millennials have at least $100,000 or more. 8.

Why did Susan have a higher balance at the age of 65? ›

Susan invested $50,000 and Bill invested $150,000. Why did Susan have a higher balance at the age of 65? Susan had a larger balance at the age of 65 because she began saving at the age of 25 and continued for ten years, giving her investments 40 years to increase.

Which investor has the highest balance when they turned 65 in this example? ›

Which investor had the highest balance when they turned 65 in this example? Chris had the highest balance when turning 65 years. This is because he had been saving $5,000 p.a for 40 years totalling $ 200,000.

What is the primary purpose of investing? ›

Investment definition is an asset acquired or invested in to build wealth and save money from the hard earned income or appreciation. Investment meaning is primarily to obtain an additional source of income or gain profit from the investment over a specific period of time.

What percentage of Americans have 1 million in retirement? ›

Putting that much aside could make it easier to live your preferred lifestyle when you retire, without having to worry about running short of money. However, not a huge percentage of retirees end up having that much money. In fact, statistically, around 10% of retirees have $1 million or more in savings.

What percentage of retirees have over $1 million? ›

If you have more than $1 million saved in retirement accounts, you are in the top 3% of retirees. According to EBRI estimates based on the latest Federal Reserve Survey of Consumer Finances, 3.2% of retirees have over $1 million in their retirement accounts, while just 0.1% have $5 million or more.

How much will they need to retire at age 67? ›

The final multiple — 10 to 12 times your annual income at retirement age. If you plan to retire at 67, for instance, and your income is $150,000 per year, then you should have between $1.5 and $1.8 million set aside for retirement.

What is the average amount of retirement savings for 20-29 year olds? ›

Fidelity reports that individuals between the ages of 20 and 29 have an average 401(k) balance of $10,500. Those in their 30s have $38,400 on average.

What is a good rule of thumb for how much you should save? ›

At least 20% of your income should go towards savings. Meanwhile, another 50% (maximum) should go toward necessities, while 30% goes toward discretionary items. This is called the 50/30/20 rule of thumb, and it provides a quick and easy way for you to budget your money.

What should a 65 year old portfolio balance be? ›

At age 60–69, consider a moderate portfolio (60% stock, 35% bonds, 5% cash/cash investments); 70–79, moderately conservative (40% stock, 50% bonds, 10% cash/cash investments); 80 and above, conservative (20% stock, 50% bonds, 30% cash/cash investments).

Which type of investment has had the highest rate of return over the last 70 years? ›

The U.S. stock market has long been considered the source of the greatest returns for investors, outperforming all other types of investments including financial securities, real estate, commodities, and art collectibles over the past century.

What is the best portfolio balance by age? ›

The common rule of asset allocation by age is that you should hold a percentage of stocks that is equal to 100 minus your age. So if you're 40, you should hold 60% of your portfolio in stocks. Since life expectancy is growing, changing that rule to 110 minus your age or 120 minus your age may be more appropriate.

How to invest your money wisely? ›

Strategizing to buy suitable investments that fit your goals, risk tolerance and time horizon. Buying the right mix of stocks, bonds, mutual funds or other assets. Holding/monitoring the assets you own to make sure nothing gets out of balance and to avoid duplicating investments.

Which of the following assets has higher liquidity risk? ›

Many other forms of investment, such as real estate, also have high associated trading liquidity risk, as the process of purchase and sale of such assets involve a significant time lapse. Such time required for processing trade increases during times of high uncertainty in an economy.

How many millennials have 100k saved? ›

According to a new Bank of America survey, 16 percent of millennials — which BoA defined as those between age 23 and 37 — now have $100,000 or more in savings.

How many people have $100,000 in retirement? ›

14% of Americans Have $100,000 Saved for Retirement

Most Americans are not saving enough for retirement. According to the survey, only 14% of Americans have $100,000 or more saved in their retirement accounts. In fact, about 78% of Americans have $50,000 or less saved for retirement.

What percentage of people have over 100k in savings? ›

Sources: Federal Reserve

Most American households have at least $1,000 in checking or savings accounts. But only about 12% have more than $100,000 in checking and savings.

What percentage of millennials have retirement savings? ›

Seventy-eight percent of Millennial workers are saving for retirement in a 401(k) or similar plan and/or outside the workplace. They began saving at age 25 (median). Those participating in a 401(k) or similar plan contribute 12 percent (median) of their annual pay.

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