ZuoTi.Pro
Question

Chad and Kate (both currently 56) have determined that they will require retirement income equal to...

Chad and Kate (both currently 56) have determined that they will require retirement income equal to $93,000

in today’s dollars, based on their current income. They plan to retire in 8 years and wish to assume an after-tax return

on their investments, prior to retirement, of 8%. They plan to readjust their assets after retirement and believe that

their net return will drop to 6%. Chad’s parents are both in their late eighties, and Kate’s parents are in their seventies.

Chad and Kate assume that retirement will last for 30 years, and that inflation will average 2%.

What is the amount of capital necessary at the start of retirement to support their income needs throughout

retirement?

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Theeme afta Retiemint$43,000 Retinament fa in & yus Retun prib to wahement p.a Retun attes etirement 6fP.as Tnfatin adjusted

0 1
Add a comment
Know the answer?
Add Answer to:
Chad and Kate (both currently 56) have determined that they will require retirement income equal to...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Steve and Tanya (both currently 56) have determined that they will require retirement income equal to...

    Steve and Tanya (both currently 56) have determined that they will require retirement income equal to $93,000 in today’s dollars, based on their current income. They plan to retire in 8 years and wish to assume an after-tax return on their investments, prior to retirement, of 8%. They plan to readjust their assets after retirement and believe that their net return will drop to 6%. Steve’s parents are both in their late eighties, and Tanya’s parents are in their seventies....

  • What is the amount of capital Troy and Kristy need to save by the start of...

    What is the amount of capital Troy and Kristy need to save by the start of retirement to support their income needs throughout retirement.?(Use Annuity Method) How much will Troy and Kristy need to save each year to fund their retirement goal? (Use Annuity Method) Assume, you discover that Troy and Kristy are unable to meet their retirement funding needs. What is the best alternative you would advise? Increase the risk in their portfolios, higher risk means higher returns and...

  • Adam will retire in 10 years. He wants a fixed retirement income that has the same...

    Adam will retire in 10 years. He wants a fixed retirement income that has the same purchasing power at the time he retires as $40,000 has today, and he plan to receive that fixed income for 25 years starts from the day he retires. Inflation rate is expected to be 5% for 10 years (ignore inflation after Adam retires). He currently has $100,000 in the 8% annual compounding rate savings. How much must Adam save during each of next 10...

  • I want a monthly income of $7,000 during my retirement. I will retire at 67 and...

    I want a monthly income of $7,000 during my retirement. I will retire at 67 and "plan" to live until 97 (30 years after retirement). I am 42 right now. If I have $180,000 in retirement account right now, how much should I save each quarter until retirement to meet my income requirement during retirement. Assume: 6% annual rate of return until retirement, compounded quarterly. Assume: 0.25% monthly rate of return compounded monthly, after retirement.

  • Prepare your retirement plan as followed:   A) Time periods: Estimate how long you have to save...

    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...

  • 30. George and Julia anticipate that they will require an annual income of $72,000 (in today's...

    30. George and Julia anticipate that they will require an annual income of $72,000 (in today's dollars) when they retire 15 years from now. They expect to receive Social Security benefits of $18,000 per year at that time. In calculating their retirement savings need, they are assuming a 3% annual rate of inflation, an 8% after-tax return on investments, and a 25-year retirement period. What is the total amount of retirement fund or capital that George and Julia will require...

  • 29. George and Julia anticipate that they will require an annual income of $72,000 (in today's...

    29. George and Julia anticipate that they will require an annual income of $72,000 (in today's dollars) when they retire 15 years from now. They expect to receive Social Security benefits of $18,000 per year at that time. In calculating their retirement savings need, the couple is assuming a 3% annual rate of inflation, an 8% after- tax return on investments, and a 25-year retirement period. What is the annual retirement income need from savings expressed in future dollars that...

  • Part 1: Tom and Debbie Flynn - Retirement Savings (15 points) Tom and Debbie are starting...

    Part 1: Tom and Debbie Flynn - Retirement Savings (15 points) Tom and Debbie are starting to take their retirement planning seriously. They are both 46 and plan to retire in 20 years at the age of 66. They expect to live 15 years in retirement (a life expectancy of 81). Between their 401k and IRA accounts they currently have $67,966 in retirement savings They currently have a combined income of $88,000 per year and expect to be able to...

  • QUESTION 5 You would like to plan for your retirement. You have gathered or assumed the...

    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...

  • Use the following information to answer questions 6-9. Brent and Sharon are getting close to retirement...

    Use the following information to answer questions 6-9. Brent and Sharon are getting close to retirement and want to make sure they are on track for a comfortable lifestyle. They want to retire in 10 years. They currently make $120,000 per year in gross income. They pay FICA taxes of $9,180 per year; have commuting expenses of $2,000 per year, Uniform expenses (inc. dry cleaning) of $1,200 per year, a monthly mortgage payment of $950 per month and will be...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT