Calculate the PV of the Young’s retirement needs at age 62 (nominal $) & calculate the PV of the Young’s retirement needs now at age 36 (real $ in today’s $)

Alan and Angel Young both 36 years old

My Young recently accepted a job making $93K a year.

Mrs. Young currently unemployed

Two children (ages 4 & 2)

Economic Info: Want to plan for early retirement (100& WRR, excluding trust income) at age 62. Mr Young to save $17,500/yr in 401K with an employer match of $6K. Expect to live to age 90. Do not include SS benefits in planning.

Assets

Bank account $28K JT

Inherited portfolio $200K H

Brokerage account $67K W

401K $32K JT

Residence $550K JT

Auto 1 $40K W

Auto 2 $25K JT

HH Items $150K JT

Liabilities

Mortgage $260514 JT

Other Financial

Annual contributions to 401K $17500

SS Taxes $7115

Federal WH $10384

State WH $3715

Property tax $3000

Tuition to preschool $15K

Utilities $2400

Entertainment $7500

Cable $1200

Clothing $2000

Auto maint/gas $3000

Food $9600

Investments

Investment portfolio $200K

Brokerage account includes gifts from Mrs Young’s father – invested in money market account at 0% earnings

401K from Mr Young’s prior job invested in index fund

PASS Score = 26

Answer rating: 100% (QA)

Number of years to retirement 26 6236 Current annual income 9... View the full answer