Question

Assume you have the following assets at age 65:

1. Pension Plan worth $400,000 today. You plan to take an annuity to withdraw all assets in 20 years. Assume 3% interest per year. You will get monthly payments for 20 years.
2. Social Security - $18,000 per year for 20 years. Assume that this is the amount you will receive each year.
3. Savings worth $150,000 today. You plan to take an annuity to withdraw all assets in 20 years. Assume 3% interest per year. You will get monthly payments for 20 years.

Answer the following questions:

1. What will be your monthly amounts for the pension plan, social security, and savings? What will be the monthly total? Answers are rounded to the nearest penny.
2. What will be the yearly amounts for the pension plan, social security, and savings? What will be the yearly total? Answers are rounded to the nearest dollar.
3. What will be the 20-year amounts for the pension plan, social security, and savings? What will be the 20-year total amount? Round all answers to the nearest dollar.

Answer 1

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