Your PARENTS will move in with you! - Outline

CLYDE MARTIN, DOROTHY WALLACE, AND KIM RHEINLANDER

Slides are tagged by opening line.

1. “The beginning” is a humorous video of a man whose in-laws are about to move in to his home.
2. “This could happen to you” is a more serious look at the reality of the situation.
3. “How much do your parents need” initiates the question of saving for retirement.
4. “Let's assume that” structures a problem around a specific scenario.
5. “Assuming no raises, other than to match inflation” asks students to calculate future wages.
6. “Year 1” explains this calculation through iteration.
7. “Or in formula form” does the general calculation with alternative notation.
8. “You should get” gives the answer so students can check their work.
9. “The current insurance tables suggest” explains how long a retired couple (or person) might need to live off their savings and does a basic calculation.
10. “That is a lot of money” points out that keeping a sum invested means that the initial amount need not be as great, and sets up a problem.
11. “So in the year that they retire” sets up the math of interest plus annual withdrawals on an account.
12. “What about year 2?” does one more iteration and asks the students to do one also.
13. “How about M25?” shows the generalization of that iteration to 25 years time.
14. “Let's remember a fact from basic algebra” reminds students of the formula for the sum of consecutive powers of x.
15. “So in the formula” applies this algebra to the formula in slide 13.
16. “In our case, W= 130,000 and i = .07” asks students to plug in the numbers and figure out what needs to be invested at retirement.
17. “What do you get?” shows the answer.
18. “But now we have a problem” introduces the problem of varying returns on an investment.
19. “How can we take random variation into account?” reminds students of the formula for salary after 25 years of raises based on inflation.
20. “If the inflation rate and corresponding raise is .02” leads students to a worksheet and spreadsheet incorporating random fluctuations in the cost of living raise.
21. “The 7% estimate for investment returns” writes investment returns minus withdrawals in an iterative fashion as a spreadsheet would do it. It is asking the students where the random fluctuation should be incorporated.
22. .” And how would you create the spreadsheet?” describes how to use the spreadsheet to see the effects of randomness.
23. “If you help your parents understand” points out the value of planning ahead. The video helps students see that their parents don't want to move in with them either.