Retirement Finance Question
Your 40-year aunt wants to start saving for her retirement. She expects to retire at 65. She thinks that she will have saved $500,000 by the time she retires. She expects to live to 90.
a) How much annual cash flow will your aunt have if she expects her retirement fund return to be 8% per year compounded annually. Assume she makes her first annual withdrawal at the end of the first year of retirement, and the last withdrawal when she turns 90.
b) Assuming a), at age 75, how much does she have left in her retirement account?
c) If she starts making twice per month deposits this year, how much will she have to deposit each period in order to exactly get to meet her retirement goal ($500,000 by the time she retires)? Effectively, your aunt still intends to earn an 8% return annually.
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Agnes is 40 years old. She wants to know how much she should be saving each year for retirement. Below are the specifics:She wants to retire at 60 and expects to live until she’s 90She currently makes $45,000 and expects that to increase each year with inflation (2%). She thinks she will need about 70% of that to live on in retirement.She has $40,000 in an RRSPHer investments are earning a real rate of 7%When she retires she will move...
Finance retirement question help
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