Magdalena, age 35, has $72,000 accumulated in savings. She projects she will save $23,000 a year until her retirement at age 67. Her current cost of living is $100,000. In retirement, she will receive $31,704 per year in Social Security and $20,000 in pension, both in today's dollars and both expected to rise by the rate of inflation. Her retirement cost of living is expected to decline by $6,000, in current dollars in the first year of retirement and thereafter grow at the projected inflation rate of 3%. Her projected annual investment return is 6%.

a. Calculate her accumulated savings at retirement.

b. Calculate her annual income, expenditures, and annual withdrawal for the first year of retirement.

c. Develop a withdrawal rate.

d. Does she meet the withdrawal rate method of deciding whether she will have sufficient funds to retire? If not, what do you recommend and why?