Finance
posted by Anonymous .
You are now 30 years old. You plan to retire in 30 years, and expect to live for 30 years after retirement, that is, until you are 90. You want a fixed retirement income that has the same purchasing power at the time you retire as $80,000 has today. You realize that the real value of your retirement income will decline yearbyyear after you retire. Your retirement income will begin the day you retire, 30 years from today, and you will then get 29 additional annual payments. Inflation is expected to be 5% per year from today forward. You currently have $250,000 in your savings account earning 7% per year, annual compounding. How much must you save during each of the next 30 years (with deposits being made at the end of each year) to meet your retirement goal?
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