Your employer uses a career average formula to determine 5 Points retirement pay

Question

Your employer uses a career average formula to determine 5 Points retirement payments to its employees. The annual retirement payout is 3 percent of the employees' career average salary times the number of years of service. Assuming you want to retire at the end of the year, calculate your annual retirement benefit using the information supplied. Year Worked Salary Year Worked Salary Year Worked Salary Year Worked Salary 1981 $6,598 1990 $20,994 2000 $50,856 2010 $85,321 1982 $13,559 1991 $22,446 2001 $56,243 2011 $90,549 1983 $14,349 1992 $24,879 2002 $60,012 2012 $94,056 1984 $14,999 1993 $21,397 2003 $62,564 2013 $98,546 1985 $16,884 1994 $26,553 2004 $66,457 2014 $100,549 1986 $17,552 1995 $29,547 2005 $72,564 2015 $99,446 1987 $18,667 1996 $33,865 2006 $76,219 2016 $101,146 1988 $19,325 1997 $35,468 2007 $78,234 1989 $21,886 1998 $39,451 2008 $82,994 1999 $42,338 2009 $84,567 $143,819 $296,938 $690,710 $669,613 Your employer uses a career average formula to determine 5 Points retirement payments to its employees. The annual retirement payout is 3 percent of the employees' career average salary times the number of years of service. Assuming you want to retire at the end of the year, calculate your annual retirement benefit using the information supplied. Year Worked Salary Year Worked Salary Year Worked Salary Year Worked Salary 1981 $6,598 1990 $20,994 2000 $50,856 2010 $85,321 1982 $13,559 1991 $22,446 2001 $56,243 2011 $90,549 1983 $14,349 1992 $24,879 2002 $60,012 2012 $94,056 1984 $14,999 1993 $21,397 2003 $62,564 2013 $98,546 1985 $16,884 1994 $26,553 2004 $66,457 2014 $100,549 1986 $17,552 1995 $29,547 2005 $72,564 2015 $99,446 1987 $18,667 1996 $33,865 2006 $76,219 2016 $101,146 1988 $19,325 1997 $35,468 2007 $78,234 1989 $21,886 1998 $39,451 2008 $82,994 1999 $42,338 2009 $84,567 $143,819 $296,938 $690,710 $669,613

Explanation / Answer

ear Worked Salary 1981 $6,598 1982 $13,559 1983 $14,349 1984 $14,999 1985 $16,884 1986 $17,552 1987 $18,667 1988 $19,325 1989 $21,886 1990 $20,994 1991 $22,446 1992 $24,879 1993 $21,397 1994 $26,553 1995 $29,547 1996 $33,865 1997 $35,468 1998 $39,451 1999 $42,338 2000 $50,856 2001 $56,243 2002 $60,012 2003 $62,564 2004 $66,457 2005 $72,564 2006 $76,219 2007 $78,234 2008 $82,994 2009 $84,567 2010 $85,321 2011 $90,549 2012 $94,056 2013 $98,546 2014 $100,549 2015 $99,446 2016 $101,146 36 years $1,801,080 Average Salary = $1,801,080/36years $ 50,030.00 Annua Retirement Benefit = AverageSalary*No of years of service*Copensation Percentage = 36 years * 50030*3% $ 54,032.40

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