Steve and Tanya (both currently 56) have determined that they will require retirement income equal to $93,000
in today’s dollars, based on their current income. They plan to retire in 8 years and wish to assume an after-tax return
on their investments, prior to retirement, of 8%. They plan to readjust their assets after retirement and believe that
their net return will drop to 6%. Steve’s parents are both in their late eighties, and Tanya’s parents are in their seventies.
Steve and Tanya assume that retirement will last for 30 years, and that inflation will average 2%.
1. How much income will Steve and Tanya need in their first year of retirement?
1]
Income needed in first year of retirement = required retirement income in today’s dollars * (1 + inflation rate)n,
where n = number of years until retirement
Income needed in first year of retirement = $93,000 * (1 + 2%)8
Income needed in first year of retirement = $108,964.32
Steve and Tanya (both currently 56) have determined that they will require retirement income equal to...
Chad and Kate (both currently 56) have determined that they will require retirement income equal to $93,000 in today’s dollars, based on their current income. They plan to retire in 8 years and wish to assume an after-tax return on their investments, prior to retirement, of 8%. They plan to readjust their assets after retirement and believe that their net return will drop to 6%. Chad’s parents are both in their late eighties, and Kate’s parents are in their seventies....
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please with steps
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