Andy, age 35, is looking to retire at age 65. Based on social security estimates, his current social security benefit would $1500 per month in today's dollars. The plan is to have enough money to fund retirement through age 95. You believe that social security benefits will track inflation and estimate that inflation will be about 2.5% per year. You believe that Andy can earn about 7.5% on his investments inside his ROTH IRA. Andy currently has $78 .000 in his ROTH IRA. You estimate that Andy's wage replacement ratio for retirement will be about 70%, and he currently earns $90,000 per year. 

How much will Andy have to save at the beginning of each year in his ROTH IRA to reach his retirement goals using the above assumptions? 

Use the simplified method of subtracting the inflation rate from ROR where/if necessary. 

Answer rating: 100% (QA)

To determine how much Andy will need to save each year to reach his retirement goals we can use the ... View the full answer