Question

Today is your 40th birthday. You expect to retire at age 65, and actuarial tables suggest that you will live to be 100. You want to move to Hawaii when you retire. You estimate that it will cost you $200,000 to make the move (on your 65th birthday). Starting on your 65th birthday and ending on your 99th birthday, your annual living expenses will be $25,000 a year. You expect to earn an annual return of 7% on your savings.

A) How much will you need to have saved by your retirement date?

B)For this part, assume that you already have $50,000 in savings today. How much would you need to save today and at ages 41 to 64 to be able to afford this retirement plan?

Answer #1

Amount required on retirement date = Cost of moving + Present value of future withdrawals

= 200,000 + 25000*PVAD(7%, 35 years)

= 200,000 + 25000*13.8540

= $546,350

B. Value of 50,000 at age of 65 = 50,000*(1.07)^25

= $271,371.63

Additional amount required = $274,978.37

Let annual savings be x

Future value of annuity due = x*(1+r)*[{(1+r)^n - 1}/r]

274,978.37 = (1.07)*x*[{(1.07)^25 - 1}/0.07]

274.978.37 = 67.67647x

x = $4,063.13

Hence, amount required to be saved each year = $4,063.13

Today is your 40th birthday (this is beginning of period, i.e.,
time 0). You expect to retire at age 65 and actuarial tables
suggest that you will live to be 85. You want to move to Hawaii
when you retire (on your 65th birthday). You estimate that it will
cost you $50,000 to make the move on your 65th birthday. Starting
on your 65th birthday and ending on your 84th birthday (all
withdrawals are at the beginning of the year),...

. You are 35 years old today and are considering your retirement
needs. You expect to retire at age 65 and your actuarial tables
suggest that you will live to be 100. You want to move to the
Bahamas when you retire. You estimate that it will cost you $
300,000 to make the move (on your 65th birthday) and that your
living expenses will be $30,000 a year (starting at the end of year
66 and continuing through the...

You just celebrated your 40th birthday. You plan to
retire when you turn 65. Today you have $105,736.62 accumulated in
your retirement plan and plan to continue adding money each month
to your retirement plan for exactly 25 years, starting one month
from now. When you retire you will receive a $40,000 retirement
bonus from your employer and will immediately deposit the money
into your retirement plan. You will then use the accumulated funds
to purchase an annuity that will...

~~~In Excel~~~
Question 1: Today is your 22nd birthday (this
is beginning of period, i.e., time 0). You expect to retire at age
of 60 and actuarial tables suggest that you will live to be 85.
Starting on your 60th birthday and ending on your 84th birthday
(all withdrawals are at the beginning of the year), you will
withdraw $50,000 for annual living expenses. Assume the interest
rate to be 5%.
Calculate the amount needed on your 60th birthday to...

~~~In Excel~~~
Question 1: Today is your 22nd birthday (this
is beginning of period, i.e., time 0). You expect to retire at age
of 60 and actuarial tables suggest that you will live to be 85.
Starting on your 60th birthday and ending on your 84th birthday
(all withdrawals are at the beginning of the year), you will
withdraw $50,000 for annual living expenses. Assume the interest
rate to be 5%.
Calculate the amount needed on your 60th birthday to...

Mary's 25th birthday is today, and she hopes to retire on her
65th birthday. She has determined that she will need to have
$5,000,000 in her retirement savings account in order to live
comfortably. Mary currently has no retirement savings, and her
investments will earn 7% annually. How much must she deposit into
her account at the end of each of the next 40 years to meet her
retirement savings goal?

You are 30 years old. You expect to retire at the age of 65.
Your income pre-retirement: $35000/a year
expense pre-retirement: $20000/a year
Your income post-retirement: $10000/a year
expense post-retirement: $12000/a year
a) How much “replacement income”
does your household require each month you are retired?
(“Replacement Income required” = Total monthly expenses – income
currently available (Rental income, dividends, social insurance.
“Replacement Income required” is your monthly budget
deficit.)
b)
Using the amount of replacement income you determined your
household...

Happy birthday! You are 30 years old today. You want to retire
at age 60. You want to have
$1,800,000 at retirement. Realistically, you know that the
most that you can save from your 31st birthday until your 50th is
$5,500 per year (you only save on your birthdays!). How much do
you have to save each year from your 51st to your 60th birthday in
order to achieve your retirement goal if you can earn 6% on your...

You just turned 20 years old and want to retire when you turn
65. You expect to live for 25 years after retirement and want to
withdraw $100,000 per year in retirement, starting on your 65th
birthday. You expect to earn a return of 6% on your investments
every year. What is the present value (as of your 65th
birthday) of the withdrawals you expect to make?
How much money should you save each year if you make the first...

You just turned 25 years old and want to retire when you turn
65. You expect to withdraw $90,000 per year for 25 years during
retirement, starting first withdrawal one year after your 65th
birthday. You expect to earn a return of 8% on your investments
every year. part 1 How much retirement saving do you need to have
by 65th birthday to support the withdrawals in the next 25 years?
Or the same question can be asked differently, what...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 4 minutes ago

asked 6 minutes ago

asked 10 minutes ago

asked 11 minutes ago

asked 21 minutes ago

asked 29 minutes ago

asked 42 minutes ago

asked 48 minutes ago

asked 53 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago