For your retirement planning, you are currently depositing $350 per month into an account that earns...
- For your retirement planning, you are currently depositing $350
per month into an account that earns an 8% return, compounded
monthly. In 12 years, you expect to increase that deposit by $250
per month (to a total of $600 per month). You plan to retire in 40
years. After you retire, you will move the money into a safe
account that earns a guaranteed 3.5% per year.
- How much will you have when you retire?
- If you expect to live 35 years past retirement, how much will you be able to withdraw per month to live off of?
- If you prefer to live off of the interest, thus creating a perpetuity and never touching the principal, how much will you be able to withdraw per month to live off of?
Homework Answers
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For your retirement planning, you are currently depositing $350
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