A 25-year-old has decided to start a retirement program. Beginning in exactly one month they will contribute the amount of $1300 into a retirement account. 80% of the funds will be invested in a high-yield equity fund that is expected to earn 8% annually; 20% of the contribution will be invested in a lower- yield bond fund that is expected to return 5% annually. They will continue to make contributions for the next 40 consecutive years. When they retire, they will combine his money into an account with an annual return of 2%. Assuming they live another 25 years, what is the maximum amount that will be able to withdrawal per month upon retirement?

What if their assumptions are incorrect. Instead of their stock fund earning 8% annually, the fund only returns 7.5% for the investment period. Using this new assumption (but keeping all other assumptions the same), what is the maximum amount they will be able to withdrawal per month upon retirement?

What other factors may affect their ability to retire in 40 years?