A worker plans to retire in 20 years. He needs $20,000 per year in retirement income...
A worker plans to retire in 20 years. He needs $20,000 per year in retirement income in today's dollars. If inflation is forecast at 3.5% per year, what annual income should he plan to receive in the first year of retirement in order to maintain the purchasing power on $20,000?
Homework Answers
Annual income:
= $20,000×(1+3.5%)^20
= $39,795.78
Hence, Annual income required after 20 years is $39,795.78
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