Jackson and Ella are wondering what their cost of living will be the first year that they retire, based on a current living cost of $72,000 per year.  Assume an inflation rate of 3% annually.  How much will their annual living cost be 25 years from now?

 

3. Noah and Emma are wondering how much they need to have saved on the day they retire (30 years from now).  They plan to withdraw the equivalent of $80,000 (today's dollars) each year that they are retired.  They expect inflation to average 2.5% per year.  (Assume each withdrawal will be 2.5% larger than the prior year's withdrawal).  They will be retired for 20 years.  They plan on their retirement money earning a return of 8.0% per year during the time they are retired.  How much money do they need to have on hand on the day they retire?

 

4. Jack and Emily are wondering how much they need to have saved on the day they retire (30 years from now).  They plan to withdraw the equivalent of $70,000 (today's dollars) each year that they are retired.  They expect inflation to average 2.5% per year.  (Assume each withdrawal will be 2.5% larger than the prior year's withdrawal).  They will be retired for 20 years.  They plan on their retirement money earning a return of 6.0% per year during the time they are retired.  How much money do they need to have on hand on the day they retire?

Answer rating: 100% (QA)

2 To calculate Jackson and Ellas annual living cost 25 years from now we can use the formula Future ... View the full answer