Cousin Bob is asking you for help with his retirement planning. Suppose Bob is 25 years old now, and he earns 8.5% (APR) in his retirement account each year. He plans to contribute a fixed amount ($X) into the retirement account each month for 35 years (monthly contributions stop when he turns 60 yrs old). After that, he will begin making withdrawals. He estimates that to live comfortably during retirement he will need a monthly withdrawal of $6,250. Suppose Cousin Bob thinks he can live to 97 years old (i.e. withdrawals will last for 37 years). How much do you think Cousin Bob needs to contribute each month to fund his retirement (i.e. solve for $X)?

Answer rating: 100% (QA)

To calculate the monthly contribution amount Cousin Bob needs to fund his retirement we can use the ... View the full answer