1. EGR 403 Retirement Planning - Part I 1 EGR 403 Introduction to Retirement Planning Part I - Basic Approach Part II - Determine Total Capital to Invest Part III - Saving Strategy Part IV - Investment Strategy Click here for streaming audio to accompany presentation Dr. Phillip R. Rosenkrantz IME Department, Cal Poly Pomona

2. EGR 403 Retirement Planning - Part I 2 Disclaimer This class project is not intended to replace the advice and counsel of licensed financial planners. It is primarily a class exercise to illustrate the concepts of EGR 403. The approach used is based largely on the book: “How to Retire Early and Live Well (with less than $1,000,000)” by Gillette Edmunds

3. EGR 403 Retirement Planning - Part I 3 Variables to Determine How Much You Need to Live On Total Expenses per year Total Capital to invest Future increases in expenses Estimated rate(s) of inflation Investment management fees Annual total return from investments

4. EGR 403 Retirement Planning - Part I 4 Basic Retirement CFD

5. EGR 403 Retirement Planning - Part I 5 Where to Start? How much, in today’s dollars, will you need to retire in the manner you desire? When would you like to retire? Will you have any pension fund or part-time income at that time? What inflation rate do you want to use? What kind of an investment manager are you?

6. EGR 403 Retirement Planning - Part I 6 Our Approach Figure out how much you want to have at retirement, then Work backwards to determine how much you need to save starting now. Analyze the impact of changes in your assumptions (sensitivity analysis)