Author Topic: Writing a Case Study - a few questions please  (Read 1301 times)

mac91red

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Writing a Case Study - a few questions please
« on: February 01, 2016, 12:11:31 PM »
Where it says "room to increase" is that for me to decide that I should make additional contributions to these elements?
example:  Traditional IRA is currently blank but I do want to start making contributions.  I would put the value I wish to contribute in B12 then for this correct?

"Total to invest" from what I can tell calculates my Monthly income (after taxes) - my monthly expenses correct?  Sorry was getting trying to follow the formulas back and i clicked in a cell and excel started to get very angry.  If I am correct on this then this figure is what I have in excess of my monthly obligations.  So in essence this is the figure I should apply to the investment order - maxing out investments or paying off debt dependent on the interest rate of the debt?

Time to FIRE - is this number of years before I want to retire?  So if i put in 15 it will tell me I need XXX in my stash and with all things being equal I will potentially have XXX remaining on my loans? 

What is cell B173 telling me?  Currently it is telling me I have some $ extra?

Finally - by playing with my monthly surplus within column B is how I am going to find solutions to "what if" scenarios correct?  Like - what if I made extra mortgage payments or what if I maxed out my traditional 401k how does that impact my ability to retire within X years?

Thanks for the assistance in advance. 




MDM

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Re: Writing a Case Study - a few questions please
« Reply #1 on: February 01, 2016, 03:46:53 PM »
Where it says "room to increase" is that for me to decide that I should make additional contributions to these elements?
example:  Traditional IRA is currently blank but I do want to start making contributions.  I would put the value I wish to contribute in B12 then for this correct?
Yes.

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"Total to invest" from what I can tell calculates my Monthly income (after taxes) - my monthly expenses correct?  Sorry was getting trying to follow the formulas back and i clicked in a cell and excel started to get very angry.  If I am correct on this then this figure is what I have in excess of my monthly obligations.  So in essence this is the figure I should apply to the investment order - maxing out investments or paying off debt dependent on the interest rate of the debt?
In short, "yes".
In long, that's not exactly correct because if you make pre-tax contributions your taxes will drop so you will be able to invest even more.

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Time to FIRE - is this number of years before I want to retire?  So if i put in 15 it will tell me I need XXX in my stash and with all things being equal I will potentially have XXX remaining on my loans?
I think the answer is "yes".  The more the numbers make sense to you, the more likely "yes" is indeed the answer here.  But if something doesn't make sense, re-ask with some specific numbers.

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What is cell B173 telling me?  Currently it is telling me I have some $ extra?
Given everything you have input, B173 looks at your projected stash "B145 years" from now minus your "stash required" in B160.  "Stash required" = (expenses/SWR + remaining loan principal), as shown in cell B171.  The difference between B160 and B171 is plotted vs. the number of years from now in the nearby chart.

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Finally - by playing with my monthly surplus within column B is how I am going to find solutions to "what if" scenarios correct?  Like - what if I made extra mortgage payments or what if I maxed out my traditional 401k how does that impact my ability to retire within X years?
Yes, and more.  The "what if" questions can be asked using any input (green background) cell on the worksheet.