Amie and Jen are 62 years old and are planning on retiring in 3 years time. They have estimated that they will need $80,148 per year to cover all of their living expenses in retirement. They have come to you to make sure that they will have enough money for their retirement and they ask you to calculate the lump sum amount they will need on the day they retire. You make the following assumptions in your calculations:

• Nominal rate of return of 6%
• Inflation rate 2.4%
• Average tax rate 23%
• Live expectancy to age 90

What amount of money would Jamie and Jen need on the date of retirement? 

Answer rating: 100% (QA)

To calculate the lump sum amount that Amie and Jen will need on the day of their retirement well con... View the full answer