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PowerPayPower Save

July 2009

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Marsha A. Goetting Ph.D., CFP®, CFCS

Professor & Extension Family Economics Specialist Department of Agricultural Economics & Economics

Keri D. HayesPublications Assistant

Department of Agricultural Economics & Economics

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https://powerpay.org

PowerSave Web site(Utah State University-Extension)

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Choose Montana

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User Login

• If new member, click [New? Sign up now]

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Screen that AppearsEnter New User Information,Click Submit

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PowerSave •Project future value of savingsCompare different PowerSave options

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PowerSave Options 1. Fixed savings payments2. Invest a lump sum3. Reach a savings goal4. Withdraw for a specified time5. Withdraw a specified amount

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Click PowerSave Tab

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Fixed Savings Payment

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Fixed Savings Payment •Save regular amount at fixed interest rate & period: How much will be earned?

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Click on Fixed Savings Payment

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Saving Frequency • Annually• Semi-annually• Quarterly•Monthly• Two weeks•Weekly

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Example: Save $100 monthly, 10 yearsInitial Balance (optional) 0Deposit Amount 100Frequency of Deposit MonthlyTime Period (Years) 10Time Period (Months) 0Annual Interest Rate 5Compounding Period DailyEstimated Inflation Rate 3.5

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Results: Save $100 monthly, 10 yearsTotal Deposits $12000.00Total Interest $3601.40Ending Value $15601.40Ending Value Adjusted for Inflation

$12954.81

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Fixed Savings Payment Summary• Use when want to determine how much I’ll have if I save a fixed amount at fixed interest rate for fixed time period.

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Invest a Lump Sum

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Invest a Lump Sum • For a given time

Months/years • Interest Rate•How much will be earned?

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Click Invest a Lump Sum

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Example: Invest $2,000, 10 yrsDeposit Amount 2000Time Period (Years) 10Time Period (Months) 0Annual Interest Rate 3Compounding Period DailyEstimated Inflation Rate 3.5

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Results: Invest $2,000, 10 yrs 3% 3.5 InflationTotal Interest 699.68Ending Value 2699.68Ending Value Adjusted for Inflation

1902.46

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Invest a Lump SumSummary• How much will I have if I invest a lump sum for fixed period of time

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Reach a Savings Goal

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Reach a Goal•How much must be saved regularly at a fixed rate to reach savings goal?

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Click Reach a Savings Goal

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Example: Goal $20,000 in 5 yrsInitial Balance (optional) 0Goal Amount 20000Frequency of Deposit MonthlyTime Period (Years) 5Time Period (Months) 0Annual Interest Rate 3Compounding Period DailyEstimate Inflation Rate 3.8

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Results: Goal $20,000 in 5 yrsAmount to save monthly to reach goal

$308.57

Goal amount adjusted for inflation

$16544.15

Goal amount adjusted to match the today's value adjusted for inflation

$24099.98

Amount to save monthly to reach goal amount matching today's value

$340.16

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Reach a Savings GoalSummary• How much must I save regularly at fixed rate to reach my savings goal?

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Withdraw for a specified time

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Withdraw for a specified time

• How much can I withdraw from a lump sum if I want it to last a specific amount of time?

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Click Withdraw for a Specified Time

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Example: Withdraw for a Specified Time

Initial Amount 100000Frequency of Withdrawal MonthlyTime Period Years 25Time Period Month 0Annual Interest Rate 3Compounding Period DailyEstimated Inflation Rate 3.8

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Results: Withdraw for a Specified Time Withdraw Amount $473.22Last payment value adjusted for inflation

$183.29

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Withdraw for a Specified Time

Summary• How much can I withdraw from a lump sum if I want it to last a specific amount of time?

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Withdraw a specified amount

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Withdraw a Specified Amount

• How long would a lump sum of money drawn down at regular intervals and amounts last?

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Click Withdraw a Specified Amount

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Retirement Monthly IncomeAge Monthly Yearly 55 – 64 $4,232 $50,78965 – 74 $3,413 $40,96075 + $2,409$28,904

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Example: Withdraw a Specified Amount

Initial Amount 100000Annual Interest Rate 6Compounding Period DailyEstimate Inflation Rate 3.8Monthly Income Needed 4232

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Withdraw a Specified Amount ResultsMonthly income will last

2 years1 month

Last payment value adjusted for inflation

$3893.14

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Withdraw a Specified AmountSummary

• If I withdraw a certain amount from a lump sum, how long will it last?

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PowerSave •Project future value of savingsCompare different PowerSave options

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PowerSave Options 1. Fixed savings payments2. Invest a lump sum3. Reach a savings goal4. Withdraw for a specified time5. Withdraw a specified amount

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PowerPayPower Save

July 2009