The development of a retirement plan works by the tradeoffs strategy. The amount needed depends on the current income, expected income accumulation by the time of retirement, amount required by the time of retirement, and the duration between the current time and the expected retirement time. For instance, if one starts to save for retirement at the age of 40 years, they would require much monthly or annual contributions than one who started at the age of 30 years assuming they will both retire at the same age. However, several factors determine the amount of income required to be saved each period. Some of the most significant include, the time when one starts retirement investment, amount of income needed at retirement, rate of government pensions, age of retirement, investments rate of returns, the level of current retirement savings. Consideration of all the above factors is imperative in the development of a personal retirement plan. In the present analysis, the development of a retirement plan will be based on the amount currently earned and the amount needed at retirement.

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How much did you determine you need to save each month?
Assuming that I will retire at the age of 65 years and I am currently 35 years old, if I start investing now, I will have 30 years to save for retirement. The amount needed to be saved each month will depend on the current income and the amount of money needed at retirement. If I will need $100,000 by the time I retire and by then I will have an income of $60,000 then it implies that I have a shortage of $40,000 which I should have made up within the 30 years of retirement investment or saving. For the period of 360 months, I need to make up at least $166.67
per month assuming all other factors. This is the amount that I need to save each month to cover up for the identified income shortage.

With the 3.5% account, the monthly payments might be difficult to maintain, so you decide to wait 5 more years until you retire. What are your monthly payments with this plan?
With an account that pays 3.5% it means that for an investment of $166.67 monthly, the account will generate $86, 505.78 at the end of 30 years. If five more years are added, the account would generate $111, 679.19 which meets the required income at retirement.

Suppose you can find an account that earns interest at 4% interest instead. How does that change your monthly payments? (You choose how long until you retire in this question.)
With this account, there is increase in the rate of returns on retirement investment. It is then expected that the duration required to reach the target amount will be shorter. To determine the duration to attain the expected retirement income, similar calculations to the previous account will be conducted. For this account, it would generate $94, 015.66 at the end of 30 years, that is, till retirement. However, the account would require an addition of less than two years to reach the required income value at retirement.

State your conclusions and interpretations of these calculations.
From the above calculations, retirement planning is a multifactor product whose determination requires keen adherence to the most significant elements affecting the market. in the present calculations, rate of returns on investments, amount of income expected at retirement, and the amount of income generated currently were identified as the most significant factors. In this regard, the determination of monthly contributions first depended on what one currently have against what they anticipate to achieve in future. When this is determined, the variations on the rate of returns on the invested monthly savings would then determine the duration expected to meet the retirement income expectations. Such variations saw the difference in the required extensions in the case of 3.5% and 4% accounts as shown above.