Question

Retiring at age 60, how much money would I need to have at retirement if I...

Retiring at age 60, how much money would I need to have at retirement if I wanted a yearly withdrawal of $60,000 for the next 30 years to travel the world and live comfortably. The anticipated interest rate is 7% and the current value is $100k. Additionally, what would be the monthly payment to achieve that goal for retirement in 32 years?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Calculation of amount of money you need to have at retirement:

Rate = 7%
Nper = 30
PMT = 60000
FV = 0

The amount of money you need to have at retirement can be calculated by using the following excel formula:
=PV(rate,nper.pmt,fv)
=PV(7%,30,-60000,0)
= $744,542.47

The amount of money you need to have at retirement = $744,542.47


Calculation of monthly payment:

Rate = 7% / 12
Nper = 32 * 12 = 384
FV = $744,542.47
PV = $100,000

Monthly payment can be calculated by using the following excel formula:
=PMT(rate,nper,pv,fv)
=PMT(7%/12,384,100000,-744542.47)
= $1,174.58

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
I plan on retiring at 70 years of age. I want to retire with a net...
I plan on retiring at 70 years of age. I want to retire with a net income of $105,000 a year, total. I anticipate that social security will fund $20,000 of this total, but the social security will be taxable at 25%. The other portion is a ROTH IRA and not taxable at retirement. Please provide the following answer: Assuming I invested in a ROTH IRA, and the IRS wants 25% of my income at retirement, how much a year...
You are 30 years old today. You want to retire at the age of 60. You...
You are 30 years old today. You want to retire at the age of 60. You expect to live until age 85. You would like to have a monthly income of ​$13,000 per month in retirement. How much do you have to save per month during your working years in order to achieve your retirement​ goal? Assume end of period payments. Assume an annual interest rate of 3.5​% in retirement and 5​% during your working life. How much do you...
Edna is 30 and plans to retire at 60. That's 30 years of saving for retirement....
Edna is 30 and plans to retire at 60. That's 30 years of saving for retirement. Edna will make a deposit into the retirement savings account once a year at the end of the year. Each deposit will be the same amount. Once she retires, Edna will use the proceeds, plus interest to live for 30 years beyond retirement. Edna wants to plan for a retirement pay of $150,000 at the end of each year. The discount rate is 10%....
Part 1. Today is my 50th birthday. I plan on retiring at age 65 estimating that...
Part 1. Today is my 50th birthday. I plan on retiring at age 65 estimating that I have another 25 years to live. In order to draw $150,000 each year over the next 25 years, how much do I need to have at the time of retirement? (assuming my retirement has a return of 10% per year) Part 2. If I have 1 million saved now and made no further contributions with a 10% return, will I have enough to...
Take control of your life. How much do you need to save for retirement at age...
Take control of your life. How much do you need to save for retirement at age 67 today on a monthly basis. If you started 10 years ago, how much would you have had to save on a monthly basis? How many years until you retire? How many months until you retire? Assume you will earn 6% return on your savings. Assume you will need $500,000 to retire. How much do you need to save monthly to reach this goal?...
You retire at age 60 and expect to live another 23 years. On the day you...
You retire at age 60 and expect to live another 23 years. On the day you retire, you have $568,900 in your retirement savings account. You are conservative and expect to earn 5.2% on your money during your retirement. How much can you withdraw from your retirement savings each month if you plan to die on the day you spend your last penny? i. Write down the discounted cash flow equation. ii. Solve the equation to find the monthly withdrawal...
Assume that you are now 20 years old. You would like to retire at age 60...
Assume that you are now 20 years old. You would like to retire at age 60 and have a retirement fund of $6,000,000 at the time of your retirement. You have already $10,000 at age 20 in the retirement account. You expect to earn 6% per year. The amount of money you must set aside each month to reach your retirement goal is ?
Joe Speed is retiring this year at his Full Retirement Age (FRA) for receiving Social Security....
Joe Speed is retiring this year at his Full Retirement Age (FRA) for receiving Social Security. Joe can begin to collect $30,000 per year this year. However, he read that he can wait for up to 4 years to begin receiving payments and his payment would increase by 8% a year ($2,400) for each of the next 4 years. With interest rates being so low, he thinks this is a great way to receive an 8% return on investment. If...
A 22 years old new hire (at t=0) is planning for retirement at age 65 (at...
A 22 years old new hire (at t=0) is planning for retirement at age 65 (at t=43). The new employee plans to save $2,000 per year for the next 15 years (t=1 to t=15). The savings are estimated to earn 8% per year on average. At 65, the person wants to have a retirement income of $70,000 per year for 20 years, with the first withdrawal occurring at t=43 right after last saving payment is deposited. How much money must...
Assume that you are now 20 years old. You would like to retire at age 60...
Assume that you are now 20 years old. You would like to retire at age 60 and have a retirement fund of $6,000,000 at the time of your retirement. You have already $10,000 at age 20 in the retirement account. You expect to earn 6% per year. The amount of money you must set aside each month to reach your retirement goal is: A. $2500.00 B. $3067.84 C. $4,377.98 D. $3500.00
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT