Your Contribution Per month | $ 500.00 |
Employer's Contribution Per month (500*50%) | $ 250.00 |
Total Monthly contribution | $ 750.00 |
Allocation of monthly contribution | |
Equity (750*75%) | $ 562.50 |
Fixed (750*25%) | $ 187.50 |
Total Monthly contribution | $ 750.00 |
Number of years (65-27) | 38 |
Contribution made for the number of months (38*12) | 456 |
Future value of equity | $ 2,550,816 |
Fixed income account balances | $ 174,786 |
Total investment account balance | $ 2,725,602 |
Estimate the future value of your retirement account based on the following assumptions. You contribute $500...
1-You have $162,000 in your retirement account that is earning 8% per year. How many dollars in withdrawals per year would reduce this nest egg to zero in 20 years? 2-Your employer provides a 401(k) plan with a matching contribution of 5% of your salary if you put in at least 5% of your salary. If your monthly salary is $4850, then how much must you contribute to your retirement account each month in order to receive the the matching...
Assume you earn $50,000 annually and your employer offers (a) a flexible spending account to which you can contribute a maximum of $2,000 this year and (b) a 401(k) retirement account to which you may contribute up to $3,000. Your 401(k) contribution will be matched 50 percent by your employer. Assuming you can only afford to contribute a total of $3,000 to both these benefits, explain what you would do with your $3,000. Write an explanation of your decision and...
QUESTION 5 You would like to plan for your retirement. You have gathered or assumed the following information: You just turned 30 years of age, and currently have zero savings. You plan to work until you turn 50 years old, at which time you would like to retire. During retirement, assume that you will have no sources of income other than what you can earn on the money that you have saved up for retirement. For the...
Page 2 of 6 66th birthdav after your retirement in 34 years s). The remainder (i.e., after you withdraw the $70,000 each year) of the amount abltu are plannigyour retirement and you open a retirement account. You want to be able to have a yearly income of $70,000 from your (i.e. 35 payments will stay in the account earning some ac retirement account. Assumntcrest To achieve that you need to contribute to your ly. You are asked to explore the...
Future Value of Multiple Annuities Assume that you contribute $220 per month to a retirement plan for 20 years. Then you are able to increase the contribution to $320 per month for another 20 years. Given a 7.0 percent interest rate, what is the value of your retirement plan after 40 years? $178,636 $177,600 $629,552 $577,459 Present Value of an Annuity Due If the present value of an ordinary, 3-year annuity is $5,900 and interest rates are 12 percent, what's...
You have 35 years until your retirement. You currently have $50,000 in your 401(k) account. You can contribute $10 thousand per year and your company will match 50 percent of your contribution. You expect an average return of 8% over the life of your 401(k) investments. a. What is your future value of your 401(k) in 35 years? b. What is your future value of your 401(k) if the average return drops to 5%? c. Given the original information above...
(Related to The Business of Life: Saving for Retirement) (Future value of an ordinary annuity) You are graduating from college at the end of this semester and after reading the The Business of Life box in this chapter, you have decided to invest $4,900 at the end of each year into a Roth IRA for the next 46 years. If you earn 10 percent compounded annually on your investment, how much will you have when you retire in 46 years?...
Scenario: You are 23-years-old and working in the marketing department of a medium-sized corporation. You are earning an annual salary of $45,000 paid every two weeks. Your employer provides a 401(k) plan, and matches employee contributions by 50% up to a maximum of 3% of your annual salary. You are in a 25% marginal tax rate. Read each of the statements below and indicate whether it reflects an advantage associated with investing in a tax-sheltered retirement account Statement An Advantage...
Suppose that on your birthday you checked the balance on your retirement account and you decided to make a $1,000 payment at the end of every month until you retire at the specified age. If you disreagard the inflation (i.e. we adjust payments and interest with the inflation rate) and assume a 2% annual growth rate of your retirement fund, how much money will you have at the time you retire? You may (and should) change the display format of...
You have just turned 30 years old, have just received your MBA, and have accepted your first job. Now you must decide how much money to put into your retirement plan. You are required to specify a fixed percentage of your salary that you want to contribute. Assume that your starting salary is $78,000 per year and it will grow 1.9% per year until you retire. Every dollar in the plan earns 7.1% per year. You cannot make withdrawals until...