Excel Retirement Tool Files
Retirement Tool Excel Files
The 7 Most Important Equations for your Retirement
In this book, Moshe Milevsky explains the work of seven scholars—summarized by seven equations—who shaped all modern retirement calculations. He tells the stories of Leonardo Fibonacci the Italian businessman; Benjamin Gompertz the gentleman actuary; Edmund Halley the astronomer; Irving Fisher the doomed stock picker; Paul Samuelson the economic guru; Solomon Huebner the insurance visionary, and Andrey Kolmogorov the Russian mathematical genius—all giants in their respective fields who collectively laid the foundations for modern retirement income planning.
The Excel file implements those 7 equations, so it is possible to enter your own information and get your own results.
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Remaining Lifetime and Longevity
There are several tables to model human mortality, among them being those from the Social Security Agency, the IRS, the Society of Actuaries, and the Gompertz-Makeham law of mortality. The starting point is qx, the probability of dying between ages x and x + 1; from there, it is possible to calculate the Remaining Life Expectancy, the Longevity at age x, and the Probability of Survival (xPt), the probability that a person at age x will die within the next x + t years.
In the Longevity and Remaining Lifetime
Excel calculator it is possible to select four mortality tables.
- The Society of Actuaries 2012 IAR Table. This table is a “generational” mortality table, in which qx can be recalculated for years after 2012 using the following formula: qx^(2012+n) = qx^(2012 ) (1 – G2x)^n
- Social Security
- US 2014
- IRS
The objective that retirees should look at first is Remaining Life Expectancy at age x, which shows, statistically, how many more years people are going to live, so they can plan their retirement. There are several factors to consider with this objective: (1) Single or couple; (2) Gender; (3) Life Expectancy for the couple’s longest survivor: (4) Combination of couple’s genders, i.e., one male-one female, two males, two females); (5) Couple’s age difference. All this factors can be selected in the tool.
If you are single or do not wish to use the joint-life features in the program, leave the “Spouse 2” entry as "Select" and only enter your gender under “Spouse 1.” For your spouse/partner enter the gender in the “Spouse 2” column and the age difference between Spouse 1 and Spouse 2.
If you want the chart to start at an age different than 65, enter that age in “Chart Starting Age”; otherwise leave that blank and the illustrations will start at 65.
