Ingrid and Felix are 65 and 68 years old, respectively. She earns a $135,000 annual gross salary
Question:
Ingrid and Felix are 65 and 68 years old, respectively.
She earns a $135,000 annual gross salary working for a large university.
He earns $100,000 gross annually as a self-employed vendor.
She deposits 4% of her gross salary into a 403(b) defined contribution account; the university deposits a 4% matching contribution, with an accumulation of $1,500,000 to date.
He deposits $15,000 into his Individual Retirement Account (IRA), with an accumulation of $750,000 to date.
They have a jointly-owned brokerage account with an accumulation of $600,000 to date.
They intend to retire when Felix reaches age 72.
They intend to maintain a retirement lifestyle equivalent to their pre-retirement lifestyle, which they estimate costs about $8,000 monthly after taxes.
Recommend an asset allocation for their retirement nest egg, as of their retirement date, to generate their needed retirement income. Assume any additional information, if needed. Use the AA Matrix (below). Explain.
An Introduction to Management Science Quantitative Approach to Decision Making
ISBN: 978-1337406529
15th edition
Authors: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams, Jeffrey D. Camm, James J. Cochran