Literature: Pension and Retirement Essay

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The accepted amount that retires need at their retirement is at least 75% of the income while working. The 75% factor accepts with a study by Georgia State College University in which the retirement income targets range from 74% to 78% of pay for employees who are revenues $30,000 to $90,000 annually. For example the pre retirement pay for an employee is amount $50,000 for a year before deductions and taxes, and then the employee will required retirement income of nearly $37,500, which is 75% of amount $50,000.

75% factor is important as a guide for pre-retirement planning. But it may not fit to all employees. The better way to determine the income needs after retirement is to draw a judgment based on expected spending pattern and residence place. For example, some people want to move a lower cost area after their retirement. If an employee wants to develop a plan that far less than the 75% mark, he should realize the differences and make sure that their figures include all areas of spending.

Savings from the annual income that need at the retirement date is difficult to determine. There are different pension plans such as 401(k) plans; individual retirement plans (IRAs) or taxable investments. The employees should ensure that their savings should support the rest of their life by depending on their age. But determining the retirement age is also difficult, there are so many variables come into the calculation is uncertain.

To come up with a plan, the employee should make assumptions about his or her life expectancy, how much income need during retirement, how much income will receive from other investment sources, when will the retirement, future inflation, future income tax rates and long term rate on investments returns.

If any one does not have saving if they need to save then required to open a saving account in bank or any financial institutions

|If u need to save yearly on your saving account | | | |
|Future value formula | | | | |
|Future Value |Present Value
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