Kim is evaluating her retirement plan. Suppose she has $500,000 when she retires in an account that earns at an effective annual rate of 9%.
as If Kim withdraws $75,000 annually, how long will her funds last?
b To make the funds last 25 years, how much cans Kim withdraws annually?
c Kim is considering a two phase withdrawal where she withdraws $60,000 annually for 10 years, and then $35,000 thereafter (when social security starts). How long will her funds last assuming that the 9% rate of return (EAR) is accurate for both phases of the retirement plan.