Question

# Assume that you are 30 years old today, and that you are planning on retiring at...

Assume that you are 30 years old today, and that you are planning on retiring at age 65. Because your current salary is \$45,000 and You expect your salary to increase at a rate of 5% per year as long as you work. To Save for your retirement, you plan on making annual contributions to a retirement account. Your first contribution will be made on your 31st birthday and will be 8% of this year’s salary. Likewise, you expect the deposit 8% Of your salary each year until you reach the age of 66. At retirement (65), you will begin withdrawing equal annual payment to pay for your living expenses during retirement with the first withdrawal on your 66th birthday. If you expect to die one day after your 100th birthday ( your last withdrawal will be on your 100th Birthday) and If the annual rate of return is 7%, then how much money will you have to Spend in each of your Golden years of retirement?

How much money will you have to Spend in each of your Golden years of retirement = \$82,213

Workings:

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