You are 22 years old, college grad with a full-time job in your career, thinking about saving for retirement.
You go to a financial planning site to get some ideas.
The site asks you the following questions:
Fill in answers:
Age now: 22
Age at retirement: 50 (difference between age at retirement and age now must be greater than 15 years)
Age want to receive retirement income until (suggest between 80 and 100): 95
Investment rate: 12%
Inflation rate: 2.4% (average rate over last 50 years = 3.5%, choose a rate between 1% and 6%)
Current year’s salary: $50,000
Amount you have already saved for retirement: $10,000 (must be greater than $100)
Amount you want to leave to heirs: $2,000,000 (must be greater than $1000)
------------------------------------------------------------------------------------------------------------------------------------
PLEASE SHOW ALL CALCULATIONS FOR #1-#6.
You are 22 years old, college grad with a full-time job in your career, thinking about...
Suppose that you are 22 today and that your salary for the year ending today is $61,250. Suppose that you are paid on an annual basis at the end of each year; so you are receiving $61,250 today. You plan to retire at age 68 and will need 75% of your last year’s salary for your annual living expenses starting at age 69. You have saved $50,000 to date. All living expenses between now and retirement will be covered by...
It is your 25th birthday (end of 25 years) and you decide that you want to retire on your 65th birthday (end of 65 years - 40 years later). Your salary is $55,000 per year and you expect your salary to increase by 3% each year for the next 40 years. When you retire, you want your retirement fund to provide an annual payment equal to 80% of your salary at age 65 and to increase by 2% a year...
You are 35 years old, and have not saved any money yet. You hope to retire at age 65, with a sustainable income of $150,000 per year of current buying power. You assume that inflation will be 3.1% and the fund you want to invest in will return 7.94% per year from now until your death. a) What is your real rate of return? ______ b) How much money do you need in today's dollars to reach your income goal?...
You want to save for retirement. Assuming you are now 20 years old and you want to retire at age 60, you have 40 years to watch your investment grow. You decide to invest in the stock market, which has earned about 8% per year over the past 80 years and is expected to continue at this rate. You decide to invest $2,000 today.
Prepare your retirement plan as followed: A) Time periods: Estimate how long you have to save and how long you will live after stop working by stating how old you are now ( I am 24) , when you will retire( 60) , and how long you will live(80). (e.g. you are 35 years old, plan to retire at the age of 60 and expected to live until 80, which suggests 25 years of saving period and 20 years of...
Assume that you are 30 years old today, and that you are planning on retirement at age 65. You expect you will live for another 20 years after retirement. (A) (6 points) Suppose you forecast that you need to spend $300,000 at age 66 and the amount is expected to increase at a rate of 3% per year due to inflation. You can earn 8% annual interest rate on your savings. Therefore, the total amount you need to have at...
Advanced Time Value of Money Problems Question (Retirement planning) You have just graduated Hofstra University at age 22. You hard work has paid off as you already have a job as an investment banker at Goldman Sachs waiting for you. You plan to work continuously until age 65 and retire exactly on that day. You expect to live until exactly 90 and enjoy your golden years and leave you heirs NOTHING. Assume your investments earn 8% per year. You plan...
Funding your retirement Emily Jacob is 45 years old and has saved nothing for retirement. Fortunately, she just inherited S75,000. Emily plans to put a large portion of that money into an investment account earning a(n) 11% return. She will let the money accumulate for 20 years, when she will be ready to retire. She would like to deposit enough money today so she could begin making withdrawals of $50,000 per year starting at age 66 (21 years from now)...
Funding your retirement Emily Jacob is 45 years old and has saved nothing for retirement. Fortunately, she just inherited S75,000. Emily plans to put a large portion of that money into an investment account earning a(n) 11% return. She will let the money accumulate for 20 years, when she will be ready to retire. She would like to deposit enough money today so she could begin making withdrawals of S50,000 per year starting at age 66 (21 years from now)...
A young couple, both 25 years old, are planning to retire in 40 years at the age of 65. After they retire, they expect to live for an additional 20 years, until age 85. They plan to begin saving for retirement today and based on information from their financial planner, they think they will earn 8% on their investment compounded annually. They think they will earn 5% on their retirement savings after they retire. If they begin at age 25...