It is never too early to plan for your retirement. Assume today is your 20th birthday and you plan to make monthly deposits into a retirement account at the end of each month. You want to have $800,000 dollars by the time you retire at age 60 (your last deposit is on your 60th birthday). Then you withdraw an equal amount each month for the next 30 years. The return on your retirement account is expected to be 6.50% per year.

a. How much do you need to contribute to your retirement account each month to reach your goal at age 60? How much can you withdraw each month after you retire?
b. In a loan table, show the beginning balance, monthly contribution or withdrawal, interest earned, and the ending balance of your retirement account of each month; Show how the monthly ending balance changes on a Column or an Area graph. Label the graph appropriately.
c. How much do you need to contribute each month if you start your plan at age 40 instead of age 20? Comment on your answers to parts a) and c).
d. If you want to retire at 55 and still want to withdraw an equal amount each month from your retirement account until you are 90, how much is your monthly contribution before retirement and how much can you withdraw each month thereafter?

Show work in Excel if possible please

Answer rating: 100% (QA)

a To calculate how much you need to contribute each month to reach your goal of 800000 at age 60 and how much you can withdraw each month after retire... View the full answer