Financial Analysis Example – Planning for Retirement


Let Z represent Annual Contributions

Z * (83.7375254)  = Total Dollars Needed At Retirement

The next easiest thing to figure out is total dollars needed to meet your goal. Figuring out this number in a spreadsheet is pretty straight forward. We are interested in the Present Value of a future amount. To get this number, use the “PV” financial function in excel. Your inputs into an excel cell then would be the following based on the figures used in this financial analysis example:

Financial Analysis Example

As you can see even from the dialog above, the answer we are looking for is $1,828,982. Revisiting the previous formula for this financial analysis example, we now have

Let Z represent Annual Contributions

Z * (83.7375254)  = $1,828,982

At this point, solving for “Z” or your annual contributions (in today’s dollars) is very easy. You just divide the total $ needed by the FV factor = $22,716.

There you have it – you will need to set aside $22, 716 yearly (in present value amount) in order to have the ability to have $100,000 (in today’s dollars) available to you annually during retirement.

Below is the spreadsheet that contains the model for this financial analysis example. You can export it as a spreadsheet and wait for it to load if your internet connection is slow.

If you found financial analysis example helpful, you may also want to check out Cash Flow Analysis .


Leave a Reply

Your email address will not be published.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


You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>