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Your client is a 25-year-old professional. His investments will have an average return of 8%; Average...

Your client is a 25-year-old professional. His investments will have an average return of 8%; Average inflation is 3.0%. He will withdraw money in retirement at the beginning of each year of retirement (45 years from today). 1. Your client is comfortable today with $140,000 per year. He plans to retire in 45 years and be retired for 25 years. How much will he need the first year of retirement to live like $140K today?

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Answer #1

Answer:

Amount he/she will need the first year of retirement to live like $140K today = 140000 * (1 + average inflation rate) ^Years to retirement

= 140000 * (1 + 3%) ^45

= $529423.42

Amount he/she will need the first year of retirement to live like $140K today = $529,423.42

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