Saving for Retirement- Outline

Slides are tagged by opening line.

1. ”Your parents” opens the discussion with an image.
2. “are in a retirement crisis” shows a humorous video of the results of bad planning.
3. “So you sit down” invites students to do the math.
4. “They think they could” makes some assumptions about living standards after retirement and draws on a result from the “Your Parents Will Move In With You” module.
5. “Right now” describes the current amount invested in the couple's retirement 401k funds.
6. “They want you” sets up the math problem of figuring out how much to put away each year in order to have a certain amount after 25 years.
7. “As always” asks the basic questions of current savings and expected returns.
8. “Your dad” include a video that points out that parents continue to have aspirations after retirement. They are not just vegetables on life support.
9. “So right now” sets up the math problem and notation for an investment at constant rate of growth with some annual deposit.
10. “What about year 2?” asks students to iterate the first few years of this process.
11. “How about S25?” shows the result of 25 iterations, which can be inferred.
12. “Let's remember a fact from basic algebra” reminds students how to sum the consecutive powers of x.
13. “So in the formula” incorporates the algebra fact into the formula for the amount invested after 25 years of good behavior.
14. “Suppose you and your parents” asks students to plug some of the relevant numbers into the formula just derived.
15. “Suppose we estimate” suggest an average annual rate of return, which may vary.
16. “Then” incorporates these estimates to find the relation between the current amount in savings and the needed annual deposit. That relation is a line.
17. “What line?” compares this formula to the one usually found in math textbooks.
18. “There is a linear relationship” hammers the point home. It then asks how much must be invested each year if there are no savings at present.
19. “$13,110” gives the answer and asks for other scenarios.
20. “What happens if” changes the interest rate.
21. “From the calculation” points out the large difference when interest goes down and brings up the added contribution of social security.
22. “Using the information” asks students to estimate this couple's social security benefit using an online calculator.
23. “Good news!” Thanks to social security the couple will need less money, and students are invited to figure out the new contribution needed.
24. “Some people argue” has a video where “experts” disagree as to how much a couple will need upon retiremen.
25. “Suppose your parents” reduces the amount needed to 80% of final salary and asks students to recalculate.
26. “Maybe you don't believe” looks at the situation of having 50 years of investment.
27. “Remember the formula” asks students to revise the formula to reflect 50 years of steady investment.
28. “S50= (1.08)50S0 + A((1.08)50 – 1 ) /.08” gives the answer and asks the students to figure out how much must be invested each year to get to the same amount.
29. “About $2614 per year!” gives the answer and asks a personal question.
30. “We have done some nice algebra” points out some of the assumptions made about interest rates in this calculation.
31. “The calculation you just did” asks students to use the formula to do both conservative and optimistic estimates, and opens a discussion about reality. The video here is a parody of the one in slide 8.