Deferred Comp- How to calculate?

[Guest Timothy Brown]

Can anyone tell me how I can calculate how much money (approximately)I will have in my deferred comp when I retire? $100.00 every 2 weeks for the next 20 years, Also how much do you recommend putting in a deferred comp plan? I have a pension plan with the State of Illinois 80% of salary at retirement so it's not my only means of retirement funds...

[LCARUSI]

I can't tell you how much to contribute to your deferred comp plan for several reasons. I don't know:

- what your retirement needs or expectations are

- when you plan to retire

- what you will avialble from other sources

I can do the mechanical calculations for you and just tell you (as you requested) what $100 every two weeks will accumulate to after 20 years.

I even question this calculation. Won't your contributions increase in the future as your compensation increases? If you are contributing $20 now, shouldn't you consider increasing it in future years.

In any case, your deferred comp accrual will depend on the interest rate your account earns. I've calculated what your account will be worth after 20 years assuming several different interest rates. I'm assuming you contribute $100 every two weeks for 20 years:

6% $98,374

8% $123,496

10% $155,956

12% $197,932

14% $252,233

16% $322,471

18% $413,279

20% $530,589

Remember the impact of inflation. These amounts won't have the same buying power in 20 years they have now. Be sure to take that into account when you do your planning.

[Guest Timothy Brown]

Thanks for the reply. I was looking for "ballpark figures" to get some idea of where I would be in 20 years. You gave me exactly what I wanted. I had no idea if I was putting enough into the plan or not. Yes,I will increase the amount as my salary increases, may even try to put maximum in now, (18%) of salary and then back off later so the funds can appreciate over a longer period?