Rutgers New Jersey Agricultural Experiment Station [Later Life Farming]

Module 4a: Ballpark E$timate Worksheet

The Ballpark E$timate is a "user-friendly" worksheet designed to calculate the amount of money that you need to save for retirement. It can be completed online or with a "paper and pencil" worksheet that can be downloaded as a PDF file from the Internet. The Ballpark E$timate includes only 6 steps! While it is certainly not the most sophisticated retirement planning tool available online, it is one of the simplest and easiest to use. The developer of this tool, the Employee Benefit Research Institute, notes that, because certain assumptions are made in the interest of simplicity, BallPark E$timate results should be viewed as just that: "a basic idea of the savings you'll need to make today for when you plan to retire."

Several key retirement planning variables are included within the Ballpark E$timate. They include: desired annual income in retirement, projected income from sources such as Social Security and a pension, projected life expectancy, and anticipated age at retirement. The worksheet assumes that users will realize a constant 3% rate of return after inflation and that their wages will increase in the future at the same rate as inflation.

Especially with the online version of Ballpark E$timate, it is a good idea to try a variety of "scenarios." For example, change the dollar amount of desired annual retirement income and the age that you expect to retire. Save the output from each analysis and select one that most closely matches your retirement preferences, assumptions, and available income to save. Recalculate your retirement savings need periodically, especially when earnings and life circumstances change.

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