Trying to create a retirement calculator

**Muzbo** · 05-27-2013, 06:19 PM

Hello to all first time here, so not sure if this questions has been asked and hoping some one will be able to help. I'm trying to create a retirment calculator and I'm having trouble working out the future value of the investment. The following are the contants -

Time till retirement - 21 years
Years in retirement - 25 years
Income in today dollars - $50,000
Inflation Rate - 3%
Income at retirement $93,015
Investment earning rate - 7%

the difficulty that I'm having is to determine the Future Value keeping in mind that the income in retirement increases due to the inflation rate?

If any one can help I'd greatly appreciate it.

cheers

Muzbo

MoneyMaker · 05-28-2013, 02:16 PM

Assumptions to find future value of growing annuity

Deposits are end of period
Compounding of interest is annual

The future value of an annual end of year deposits in amount of $50,000 per year for 21 years that inflate at 3% earning 7% return is $2,850,335

This amount was calculated as follows using this Excel FV function

RATE	7%
GRADIENT	3%
TAXRATE	0
NPER	21
PMT	-50000
PV	0
FV	?
TYPE	0
GTYPE	0
COMPOUNDING	1
PERIOD	1
DISTRIBUTION	1
GTYPE	1
	=tadFV(7%,3%,0%,21,-50000,0,0,0,1,1,1,1)
FV	2,850,335

Now at the start of 22nd year you have a amount of money equal to $2,850,335 that you can reinvest at 7% interest rate while inflating at 3% per year. You would like to know the amount of money that you can withdraw at the start of each next 25 years in retirement so that all funds are depleted and nothing in left in the account at the end of 25 years of retirement. Such an amount would be equal to $228,587

This amount was calculated as follows using this Excel PMT function

RATE	7%
GRADIENT	3%
TAXRATE	0
NPER	25
PMT	?
PV	-2,850,335
FV	0
TYPE	1
GTYPE	0
COMPOUNDING	1
PERIOD	1
DISTRIBUTION	1
GTYPE	1
	=tadPMT(7%,3%,0%,25,-2850335,0,1,1,1,1,1,1)
PMT	228,587

**Muzbo** · 05-28-2013, 05:37 PM

Thanks so much for your help, just a quick question when I downloaded the trial verison I have the add ins in the function box but the formula still comes up as an error in the attached speadsheet. Do I need to purchase the download to use the TADXL formula's?

cheers

**Muzbo** · 05-28-2013, 05:37 PM

Thanks so much for your help, just a quick question when I downloaded the trial verison I have the add ins in the function box but the formula still comes up as an error in the attached speadsheet. Do I need to purchase the download to use the TADXL formula's?

cheers

MoneyMaker · 05-28-2013, 11:53 PM

Originally Posted by Muzbo

Thanks so much for your help, just a quick question when I downloaded the trial verison I have the add ins in the function box but the formula still comes up as an error in the attached speadsheet. Do I need to purchase the download to use the TADXL formula's?

cheers

Accept my apologies for the late reply.

You had downloaded tadXL v1.0 that has different number of functions that work differently from those newer functions found in tadXL v2.0

tadFV and tadPMT in v1.0 do not have options for growing, shrinking, increasing and decreasing annuity payments

Unfortunately there is no trial download available for tadXL v2.0