| Course | GF550 Retirement Planning |
|---|---|
| Unit | Unit 1 |
| Paper type | Discussion board post |
| Length | About 480 words, 2 pages double-spaced |
| Format | APA 7 discussion post |
| School | Purdue University Global |
| Program | MS in Finance |
| Updated | October 2026 |
Free sample paper for GF550 Unit 1
Seventy to Eighty Percent of Whose Income? A Unit 1 Post Rebuilding a Retirement Budget by Category
GF550 · Unit 1 Discussion
Posted by [Student Name]
The couple, their figures and the classmates are composite; the articles cited are real.
Initial Post
Almost every retirement calculator I have used starts by asking for income and multiplying it by 70 to 80 percent. The rule reflects a real pattern, since households stop paying some costs when they stop working, but it treats every household as if those costs were the same share of income.
To test it, I took a composite couple earning $140,000 together. The rule puts their retirement need near $105,000 a year. Rebuilding their spending by category gives a different answer.
What disappears. Payroll taxes of about $10,700 stop with wages. Retirement contributions of $15,000 stop. Their mortgage of $24,000 a year ends at 63, two years before they plan to retire.
What falls. Commuting and work clothing drop, so transportation falls from about $12,000 to $8,000. Income tax falls from about $14,000 to roughly $9,500, since less income is taxed and some is not taxable at all.
What rises. Health spending rises from about $6,000 to $18,000, because they will need private coverage for two years before Medicare and will pay Medicare premiums and out-of-pocket costs afterward. Travel adds $6,000 they do not spend now.
What stays. Food, property tax and insurance, and other living costs stay close to today's levels.
The rebuilt total comes to about $86,000, roughly 61 percent of their current income.
The rule overstates this couple's need by about $19,000 a year because it cannot see that their largest single expense, the mortgage, ends before retirement begins, while it understates how much health care will cost in the years before Medicare.
Research on whether households save enough finds that the right target depends heavily on each household's circumstances, and many households need less than a flat rule suggests (Scholz et al., 2006). The flip side is that a couple with years left on a mortgage, or with high health costs, could need more than 80 percent.
So who made the 70 to 80 percent assumption? Mostly planners and calculator designers looking for a single number that works on average. It is a reasonable starting point but a poor plan. Simple defaults have a strong pull on how people save (Thaler & Benartzi, 2004), which helps explain why one number has spread so widely.
Reply to Kendra
Kendra, your parents' budget keeps their full grocery and dining costs in retirement. Did their spending on food actually stay the same after they stopped working, or did it shift from restaurants to home cooking?
Reply to Luis
Luis, you assumed health costs fall after Medicare. Did you include Part B premiums and a supplement or Advantage plan? Those can run several thousand dollars a person each year.
References
Scholz, J. K., Seshadri, A., & Khitatrakun, S. (2006). Are Americans saving "optimally" for retirement? Journal of Political Economy, 114(4), 607-643. https://doi.org/10.1086/506335
Thaler, R. H., & Benartzi, S. (2004). Save More Tomorrow: Using behavioral economics to increase employee saving. Journal of Political Economy, 112(S1), S164-S187. https://doi.org/10.1086/380085
Reading the GF 550 Unit 1 instructions
The opening GF550 discussion asks you to take one common retirement planning assumption and examine where it comes from and whether it fits a real household. State the assumption and its usual source. Apply it to a household, real or composite, to show the number it produces. Then rebuild that number from the household's own circumstances, category by category, noting what disappears, what falls, what rises and what stays the same in retirement. Compare the two results and explain the difference. Bring in research on retirement saving or spending to show whether your finding is typical. Close by answering the prompt's question of who made the assumption and why it persists. Replies should test one category in a classmate's rebuild. Cite research in APA 7 and keep to the posted length.
Inside the GF550 Unit 1 example
Opening the example, the writer admits that calculators always start from a percentage of income, then applies the rule to $140,000 of earnings. The rebuild comes in four bolded groups: costs that disappear, costs that fall, costs that rise and costs that stay. Each line gives a current and a retirement figure, such as health spending rising from about $6,000 to $18,000. The total of about $86,000 is set against the rule's $105,000. The highlighted sentence explains that the rule cannot see a mortgage ending before retirement. Scholz, Seshadri and Khitatrakun's work on optimal saving shows that needs vary by household, and Thaler and Benartzi's research on defaults helps explain why one number spread. Kendra is asked whether her parents' food spending really stayed flat, and Luis whether he priced Medicare premiums.
Reading the GF550 Unit 1 grading rubric
Points on this first post in the MS in Finance retirement course reward testing an assumption with numbers rather than repeating it. Graders look for the assumption stated with its source, applied to a specific household and rebuilt from categories that the writer can justify. A clear comparison of the two figures, with the reason for the difference, earns the next share. Research support showing whether the finding generalizes is expected at graduate level. Instructors value balance, such as noting households for whom the rule would understate need. Replies are graded on whether they probe a particular category in a classmate's rebuild instead of agreeing. APA 7 formatting and an appropriate length complete the grade.
GF550 Unit 1 help: mistakes that cost points
Weak GF550 Unit 1 posts restate the 70 to 80 percent rule and agree with it, or reject it without building an alternative. Others rebuild a budget but leave out costs that rise in retirement, especially health coverage before Medicare and premiums afterward. Some forget that payroll taxes and retirement contributions stop with wages, which overstates need. Taxes in retirement are often ignored entirely. Replies tend to share a different rule of thumb instead of testing a classmate's numbers. Whatever assumption your prompt names, whether a withdrawal rate, a return figure or a retirement age, use the same steps: state it, apply it, rebuild from the household's facts, compare and explain.
Get a GF550 Unit 1 example written to your instructions
Paste your GF550 Unit 1 prompt, the reply requirements and the rubric; if your instructor supplies a household, include it, and otherwise a composite one is used. The post tests the cost assumption line by line and the replies ask classmates who pays. The first custom sample is free of charge, usually back in 24-48h. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
More GF550 papers and MS in Finance samples
- GF550 Unit 2: Client Fact Summary
- GF550 Unit 3: Needs and Gap Projection
- GF550 Unit 4: Qualified Plan Comparison
- GF550 Unit 5: Benefit Timing Analysis
- GF550 Unit 6: Seminar Reflection
- GF550 Unit 7: Employer Plan Brief
- GF550 Unit 8: Distribution Strategy Memo
- GF550 Unit 9: Longevity and Sequence Analysis
- GF550 Unit 10: Client Retirement Plan
- GF540 Unit 1: Utility Value Drivers Discussion Post
- GF530 Unit 1: Gain Inside Operating Income Post
- GF520 Unit 1: Funding Choice Discussion Post
- GF510 Unit 1: Discussion Post on an Unchosen Risk
GF550 Unit 1 questions, answered
Is the 70 to 80 percent rule wrong?
Not wrong, just general. It describes a typical household and says nothing about a mortgage ending, a pension, or health costs before Medicare eligibility. The sample treats it as a starting assumption to be tested, which is what most prompts at this stage want. Your own post can reach a higher or lower figure, as long as each change is tied to a reason.
Do I need real benefit figures in an opening post?
No. The opening unit is about assumptions, so the sample shows benefit income only as a category and notes that the amount depends on earnings history and claiming age. Actual estimates belong to the fact-gathering and timing work later in the term, where a client's own statement supplies the figure rather than a guess made on the discussion board.
How do replies earn credit in this course?
By testing a figure rather than agreeing with a goal. In the sample, each reply singles out one cost a classmate assumed, asks who bears it, the household, an employer or a public program, then names a category the classmate left out. That pattern gives the classmate something to answer and shows the grader you engaged with the numbers.
Where can I find a free GF550 Unit 1 sample paper?
This page holds a complete GF550 Unit 1 discussion post testing the 70 to 80 percent replacement rule for a composite couple, with a category-by-category rebuild, two replies and APA 7 references.
Why do health costs rise so much in the rebuilt budget?
The couple plans to retire before Medicare eligibility at 65, so they must buy private coverage for two years. After that, Medicare premiums and out-of-pocket costs continue, unlike the employer-subsidized coverage they have now.