Question

You plan to retire in 28 years. At the point of retirement, you want to be...

You plan to retire in 28 years. At the point of retirement, you want to be able to withdraw 25,682 at the end of each year forever. Assume that you earn a 7.1% rate of return prior to retirement and an 5.69% rate of return after retirement. If you do not want to make any further contributions to your retirement fund, how much do you need today? Round answer to the nearest dollar.

Homework Answers

Answer #1

Amount of retirement fund required = 25,682/ 5.69% = 451,353.25

Present value of money: = FV/ (1+r) ^N
Input
FV Future value FV= $       451,353.25
I Rate of interest r= 7.1%
N Number of years N= 28
PV Present value = 451353.25/ (1+0.071)^28
PMT not applicable = $         66,131.96

Answer is $66,131.96

please rate.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. You plan to save the following amounts $3,598 today $5,707 per year for the next...
1. You plan to save the following amounts $3,598 today $5,707 per year for the next 3 years $7,004 per year for the following 1 years $12,497 per year for the following 6 years $13,011 per year for the final 5 years Assuming you earn a 6.1% rate of return during the entire period, how much will you have at the END of the time horizon? Round answer to the nearest dollar. 2. What is the effective annual rate (keff)...
You are 35 years old today and want to plan for retirement at age 65. You...
You are 35 years old today and want to plan for retirement at age 65. You want to set aside an equal amount every year from now to retirement. You expect to live to age 85 and want to withdraw a fixed amount each year during retirement that at age 65 will have the same purchasing power as $83,697 has today. You plan on withdrawing the money starting the day you retire. You have not saved any money for retirement....
You are 43 years old today and want to plan for retirement at age 65. You...
You are 43 years old today and want to plan for retirement at age 65. You want to set aside an equal amount every year from now to retirement. You expect to live to age 95 and want to withdraw a fixed amount each year during retirement that at age 65 will have the same purchasing power as $98,093 has today. You plan on withdrawing the money starting the day you retire. You have not saved any money for retirement....
You are 44 years old today and want to plan for retirement at age 65. You...
You are 44 years old today and want to plan for retirement at age 65. You want to set aside an equal amount every year from now to retirement. You expect to live to age 96 and want to withdraw a fixed amount each year during retirement that at age 65 will have the same purchasing power as $94,725 has today. You plan on withdrawing the money starting the day you retire. You have not saved any money for retirement....
You want to retire in 40 years and plan to invest $1,800 per month until you...
You want to retire in 40 years and plan to invest $1,800 per month until you retire. If you would like to be able to withdraw $600,000 per year for 25 years during retirement, what annual rate will you have to earn until retiring if you expect to earn 5% after you retire? A.)9.01% B.)7.50% C.)13.96% D.)10.13% E.)11.64%
Assume that you will retire in 30 years. You plan to be retired for a total...
Assume that you will retire in 30 years. You plan to be retired for a total of 30 years. You wish to withdraw the equivalent of $50,000 per year (in TODAY'S dollars) from your retirement fund each year that you are retired (ASSUME that there will NOT be any adjustments for inflation DURING your retirement. You will withdraw the same dollar amount every year that you are retired). The expected inflation rate for the next 30 years is 3%. You...
you plan to retire 35 years from today. You want to invest the same amount each...
you plan to retire 35 years from today. You want to invest the same amount each year starting one year from now so you can withdraw $50000 each year during your retirement. You expect to live independently for 25 years following your retirement. You also need a lump sum of 350000 in 60 years to pay for permanent nursing care until you die. You earn 10% per year. You intend to make your first withdrawal one year after retiring. How...
You want to withdraw $8,500 per month in real terms for 25 years when you retire....
You want to withdraw $8,500 per month in real terms for 25 years when you retire. You plan to retire in 35 years, and expect to earn an 11 percent nominal effective annual return before you retire. You will make monthly deposits to fund your retirement account. Immediately after you make your last deposit, you plan to withdraw $35,000 in real terms to take an around the world trip. You also wish to leave your grandchildren $750,000 in real terms...
You plan to retire as soon as you turn 65. Upon retirement you want to receive...
You plan to retire as soon as you turn 65. Upon retirement you want to receive $70,000 per year at the start of each year (first payment on day you turn 65) for the next 20 years. You are 25 years old today. You want to start saving today. 1. How much do you have to save each year (annual periods) to ensure that you will have sufficient funds to receive $70,000 per year from the age of 65? Initially,...
You have finished your time at Kelley and need to start thinking about retirement. You plan...
You have finished your time at Kelley and need to start thinking about retirement. You plan on working for 20 more years and then retire. Upon your retirement 20 years from today, you plan to have enough money to withdraw $10,000 per month, with the first payment coming exactly one month after your retirement day. You expect your retirement account to earn a return of 8% APR (stated rate), compounded monthly, on all funds in the retirement account. Assuming you...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT