Your father, who is 60, plans to retire in 2 years, and he expects to live independently
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Question:
Your father, who is 60, plans to retire in 2 years, and he expects to live independently for 3 years. He wants a retirement income which has, in the first year, the same purchasing power as $40,000 has today. However, his retirement income will be of a fixed amount, so his real income will decline over time. His retirement income will start the day he retires, 2 years from today, and he will receive a total of 3 retirement payments. Inflation is expected to be constant at 5 percent. Your father has $100,000 in savings now, and he can earn 8 percent on savings now and in the future. How much must he save each year, starting today, to meet his retirement goals?
Related Book For
Financial Algebra advanced algebra with financial applications
ISBN: 978-0538449670
1st edition
Authors: Robert K. Gerver
Posted Date: