ACCT 5554 Finance|Simulation Models

You need to create a simulation in Excel You simulation will need to determine the likelihood of running out of money in retirement for different withdrawal rates. Please see the presentation for additional guidance You need to model a retirement portfolio over a 30 year time horizon from age 65 to 95. You need to consider the effect of the withdrawal rate on the likelihood of running out of money before age 95. Once you determine a withdrawal rate (%), consider how much money you need to start with to have the dollar amount of withdrawals you would like to have. Once you have completed this, use the simulation spreadsheet I created (you can access after completing the learning objective survery) to determine how much of your income you should save for retirement if you start at age 25 and retire at age 65. The withdrawal rate needs to be defined as a percentage of your beginning balance since you will presumably need to maintain a certain standard of living. You may ignore taxes and inflation for all these calculations but know that in real life we cannot! Simulation models are important, and I hope you will allow me the indulgence of a non accounting topic for this assignment… knowing that accountants also retire (so do college professors) Create a report on your findings, including the sensitivity analysis for withdrawal rates, as well as explanations of how you calculated how much money you need, and how much you need to save to get to that amount. Include the amount of risk you are willing to accept. This should be thorough, but 2-3 pages should be sufficient (this is just a guideline, not a restriction). Also upload an excel spreadsheet showing your model. If you copied my model also include it showing your calculations.
Read less

Leave a Reply

Your email address will not be published. Required fields are marked *