Question

Jordan, age 46, currently makes $143,000. She expects that inflation will average 2.75 percent for her entire life expectancy. She expects to earn 8.5 percent on her investments and retire at age 65 and live to age 92. She has sent for and received her Social Security benefit statement, which indicated that her Social Security retirement benefit in today’s dollars adjusted for early retirement is $20,000 per year. It is reasonable to subtract the Social Security benefit from today’s needs because it is inflation adjusted.

Calculate the amount Jordan must save monthly, at the end of each month (ordinary annuity), assuming she currently has $25,000 in retirement savings.

Answer 1

first withdrawal at retirement required=(B56-B57)*(1+B59)^B54

Amount to be accumulated when gets retire=PV((1+B58)/(1+B59)-1,B55,-B60)

Monthly Saving required=PMT(B58/12,B54*12,B53,-B61)