Finance

posted by .

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 year-by-year 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?

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. corporate finance

    1)You have just turned 30 years old, have just received your MBA, and have accepted your first job. Now you must decide how much money to put into your retirement plan. The plan works as follows: Every dollar in the plan earns 7% per …
  2. Finance

    Your client is 40 years old and she wants to begin saving for retirement, with the first payment to come one year from now. She can save 5000 per year; and you advise her to invest it in the stock market, Which you expect to provide …
  3. finance

    Suppose that you are 25 years old and you have two options to save money for retirement. Plan A allows you to save $3000 per year for the next 20 years, then sit for 20 years and finally draw on it for the following 30 years. Plan …
  4. Personal Finance

    Janice Jacobs is planning for her retirement. She knows what assets and liabilities she has now and expects to have in the future. She knows what her spending patterns are likely to be and adjusted them for inflation. She also has …
  5. finance

    Mrs. Kay who is 24 years old plans to retire at the age of 60. Mrs. Kay would like to be able to withdraw $120,000 per year from her retirement account for 40 years after retirement beginning a year after her retirement. She already …
  6. Retirement

    1. I would like to retire in 42 years at the age of 65. The average retirement age for women is between 60-62 years of age, and 62-64 for men. 2. My annual amount of money I'll need after retiring would be approxiamately $26,500 (2,205*12=$26,460) …
  7. Finance

    You are 45 years of age and your asporation is to retire in 17 years at age 62. Assume you are about to set up a new retirement savings account at a 4% annual interest rate (APR). Based on how you want to live in retirement, and any …
  8. math - interest rates/annuity

    Plan to save $5000 per year for retirement with first investment made 1 year from now. Plan to earn 10% per year on investments. Plan to retire in 43 years, immediately after making last $5000 investment. a) if, instead, decide to …
  9. business finance

    Your client is 40 years old, and she wants to begin saving for retirement, with the first payment to come one year from now. She can save RM5,000 per year, and you advise her to invest it in the stock market, which you expect to provide …
  10. Finance

    You want to be able to withdraw $25,000 from your account each year for 20 years after you retire. If you expect to retire in 25 years and your account earns 7% interest while saving for retirement and 6.7% interest while retired Round …

More Similar Questions