# What difference will starting 5 years from now make?

Consider that you have decided to quantify many of the aspects required for financial planning on a personal
basis. Accordingly, using your age as of the first day of next month, make all the appropriate assumptions as to
discount rates to use, inflation rates and any other variables you may need and explain your rationale. You may
use the methodology described in Unit 3, Module 1 of the course guide and in chapters 5 to 7 of the text.
Required:
1. You have decided to take control of your financial situation and do some long term planning. Using
your age as of the first day of next month, calculate how much you will have to save monthly to
achieve your goal of a comfortable retirement. Include all sources of possible income including
Government Social Security income etc.
2. What difference would starting to save 5 years earlier have made?
3. What difference will starting 5 years from now make?
4. What difference would earning 200 basis points (2%) more on your investments in Question 1 make?
5. What difference would an increase in inflation of 75 basis points (0.75%)in Question 1 make?
6. A generous benefactor invested \$5,000 the day you were born and invested it in TD Bank Common
Shares. Using the Investor Relations Investment Calculator in the TD Bank Web site, complete the
following table to find how much you would have today without dividends, how much you would have
taking cash payment of dividends and with dividends reinvested (DRIP). Calculate the compounded
annual rate of return for each of those choices to one decimal place. See hyperlink below. Please note,
if you were born before 1975, use 1975 as your start point. If link does not work, calculator can be
found in the TD Bank Web site

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