Chapter 4: Can You Afford the Quiet Years?
The worksheets from Chapter 4 of Fifty-Five. Type your own numbers, or try an example from the book to see how each one works.
A cost that doesn't come every year
This turns a big bill that comes once in a while into a yearly amount you can put in your budget.
The formula: Cost ÷ Years between = Amount to set aside each year
The calculator needs JavaScript. The paper worksheet below does not: it is the same arithmetic, written out.
The paper worksheet
Cost $__________ ÷ Years between ______ = Per year $__________
Walk through it, step by step
- Write what the item will cost on the first blank. Use today's price.
- Write how many years pass between one and the next on the second blank.
- On a calculator: type the cost, press ÷, type the years, press =.
- Write the answer on the third blank, and in the last column of your table of costs.
- Do it for each line in the table, then add the last column.
Check your answer
- Multiply the yearly amount by the years. You should get back the cost. For the car: $4,000 × 9 = $36,000. It matches.
This worksheet uses only the numbers you type. It has no government figure built in.
Your income gap and your bridge
How much your savings must supply in each stage, and in total, before Social Security takes over.
The formula: Yearly spending − Dependable income = Gap from savings, per year. Gap × Years in the stage = Total for the stage. Add the stages = Your bridge.
The calculator needs JavaScript. The paper worksheet below does not: it is the same arithmetic, written out.
The paper worksheet
Yearly spending $__________ − Dependable income $__________ = Gap from savings $__________
Gap from savings $__________ × Years in the stage ______ = Total for the stage $__________
Stage 1 $__________ + Stage 2 $__________ + Stage 3 $__________ = Your bridge $__________
Walk through it, step by step
- Write your yearly spending in retirement, after tax, from Step 1.
- Mark the stages. A new stage starts each time an income starts or stops: a last paycheck, a pension, each Social Security claim.
- For the first stage, add up the dependable income for one year. Write it on the second blank.
- Subtract. That's your gap for each year of the stage.
- Count the years in the stage, counting both the first and the last.
- Multiply the gap by the years.
- Do steps 3 to 6 for each stage. Add the totals for every stage before your last Social Security claim. That's your bridge.
Check your answer
- For any stage, add the gap and the dependable income. You should get back your spending. For Carol and Dave at 67: $43,600 + $26,400 = $70,000. It matches.
- The bridge is before income tax. If the money comes from pre-tax accounts, you'll withdraw more than this (Chapter 3).
- Compare your bridge with your savings in Chapter 1. If the bridge is larger than what you have, go to Step 4.
This worksheet uses only the numbers you type. It has no government figure built in.
The survivor's gap
What one person, living alone, would need from savings each year.
The formula: Couple's spending × Survivor's share = Survivor's spending. Survivor's spending − Survivor's income = Survivor's gap.
The calculator needs JavaScript. The paper worksheet below does not: it is the same arithmetic, written out.
The paper worksheet
Couple's spending $__________ × Survivor's share 0.______ = Survivor's spending $__________
Survivor's spending $__________ − Survivor's income $__________ = Survivor's gap $__________
Walk through it, step by step
- Write the couple's yearly spending on the first blank.
- Choose the survivor's share. Use 0.75 unless you've worked out your own figure line by line.
- Multiply. That's the survivor's spending.
- Add up what keeps coming after the first death: the larger of the two Social Security checks, and any pension the survivor keeps (Chapter 10).
- Subtract. That's the survivor's gap.
- Do it twice, once for each of you as the survivor. The answers can differ if a pension stops.
Check your answer
- The survivor's income should include one Social Security check, not two.
- Add the gap and the income. You should get back the survivor's spending: $10,836 + $41,664 = $52,500. It matches.
This worksheet uses only the numbers you type. It has no government figure built in.