Calculating retirement income

damo12_2

Does anyone know the mathematics of calculating at least one method of retirement income? i.e. rather than telling me to use an onlline calculator to calculate my retirement income requirements, does anyone know what the mathematical equations are behind at least one of these retirement income calculators? Call me old fashioned, but I just want to be able to calculate my retirement income requirements manually, if possible, just to see how it is done.

jonathon_hart

Not quite sure what you are looking for here. Are you looking for how companies determine the annuity rates they offer? or how to project an estimate of what you income will be at retirement?

If it is the former then it would be almost impossible to provide, and I certainly couldn't help you, as the annuity rates are calculated by actuaries and include factors such as assumed mortality rates, interest rates and bond performances. In addition they can also be varied from that according to the companies whims (e.g if the company needs more short term funds then they can offer a better annuity rates to persuade more people to buy with them).

If it is the second one then let me know and I can send you a spreadsheet I put together that has all the formulas visible in it.

damo12_2

jonathon_hart wrote: »

Not quite sure what you are looking for here. Are you looking for how companies determine the annuity rates they offer? or how to project an estimate of what you income will be at retirement?

If it is the former then it would be almost impossible to provide, and I certainly couldn't help you, as the annuity rates are calculated by actuaries and include factors such as assumed mortality rates, interest rates and bond performances. In addition they can also be varied from that according to the companies whims (e.g if the company needs more short term funds then they can offer a better annuity rates to persuade more people to buy with them).

If it is the second one then let me know and I can send you a spreadsheet I put together that has all the formulas visible in it.

Thanks for your prompt reply. It is much appreciated. It is the second one I am after.

jonathon_hart

Hi.

PM your e-mail address. However I will say that my spreadsheet is setup for UK pensions and I notice that you are in Australia - so it may not be completely relevant.