Jamie Lee and Ross, now 57 and still very active, have plenty of time on their...
Fantastic news! We've Found the answer you've been seeking!
Question:
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/664996138520d_57866499612a50c5.jpg)
Transcribed Image Text:
Jamie Lee and Ross, now 57 and still very active, have plenty of time on their hands now that the triplets are away at college. They both realized that time has just flown by, over twenty-four years have passed since they married! Looking back over the past years, they realized that they have worked hard in their careers, Jamie Lee as the proprietor of a cupcake cafe and Ross, self-employed as a web-page designer. They have enjoyed raising their family and strived to be financially sound as they are looking to retirement that is just around the corner. They saved regularly and invested wisely over the years. They rebounded nicely from the economic crisis over the past few years, as they watched their investments closely and adjusted their strategies when they felt it necessary. They purchase vehicles with cash and do not carry credit card balances, choosing instead to use them for convenience only. The triplets are pursuing their master's degrees and have tuition covered through work/study programs at the university. Jamie Lee and Ross are just a few short years from realizing their goals of retiring at 65 and purchasing a home at the beach! They are reviewing their financial situation to ensure they will be ready for retirement. They anticipate being able to live comfortably with 80% of their current expenses. The rate of return on their investments until they retire is 4% They expect this percentage to drop to 3% after retirement. Use this information, along with Exhibit 1-A, Exhibit 1-B, and the information provided below to determine the annual deposit amount Jamie Lee and Ross will need to make until they retire in order to make up the shortfall between their estimated expenses and income needed during retirement. Each answer must have a value for the assignment to be complete. Enter "O" for any unused categories. Current Expense Amounts (Jamie Lee and Ross Combined) Fixed expenses: $4,100 per month Variable expenses: $2.000 per month Estimated Income Amounts (Jamie Lee and Ross Combined) Social Security: $2,150 per month Current IRA balance: $100,000 Estimated IRA withdrawal $200 per month Other investments: $31,900 per year Estimated Annual Retirement Living Expenses Estimated annual living expenses if retiring today Number of years until retirement Expected annual rate of return before retirement Future value (use Exhibit 1-A) Projected annual retirement living expenses, adjusted for inflation (A) Estimated Annual Income at Retirement Social Security income Company pension, personal retirement account income Investment and other income Total retirement income Annual shortfall of income after retirement (A-B) Expected years in retirement Expected annual rate of return before retirement Expected annual rate of return on invested funds after retirement Future value factor for a series of deposits (use Exhibit 1-B) Annual deposit required to accumulate the amount needed (D) (C) 30 Jamie Lee and Ross, now 57 and still very active, have plenty of time on their hands now that the triplets are away at college. They both realized that time has just flown by, over twenty-four years have passed since they married! Looking back over the past years, they realized that they have worked hard in their careers, Jamie Lee as the proprietor of a cupcake cafe and Ross, self-employed as a web-page designer. They have enjoyed raising their family and strived to be financially sound as they are looking to retirement that is just around the corner. They saved regularly and invested wisely over the years. They rebounded nicely from the economic crisis over the past few years, as they watched their investments closely and adjusted their strategies when they felt it necessary. They purchase vehicles with cash and do not carry credit card balances, choosing instead to use them for convenience only. The triplets are pursuing their master's degrees and have tuition covered through work/study programs at the university. Jamie Lee and Ross are just a few short years from realizing their goals of retiring at 65 and purchasing a home at the beach! They are reviewing their financial situation to ensure they will be ready for retirement. They anticipate being able to live comfortably with 80% of their current expenses. The rate of return on their investments until they retire is 4% They expect this percentage to drop to 3% after retirement. Use this information, along with Exhibit 1-A, Exhibit 1-B, and the information provided below to determine the annual deposit amount Jamie Lee and Ross will need to make until they retire in order to make up the shortfall between their estimated expenses and income needed during retirement. Each answer must have a value for the assignment to be complete. Enter "O" for any unused categories. Current Expense Amounts (Jamie Lee and Ross Combined) Fixed expenses: $4,100 per month Variable expenses: $2.000 per month Estimated Income Amounts (Jamie Lee and Ross Combined) Social Security: $2,150 per month Current IRA balance: $100,000 Estimated IRA withdrawal $200 per month Other investments: $31,900 per year Estimated Annual Retirement Living Expenses Estimated annual living expenses if retiring today Number of years until retirement Expected annual rate of return before retirement Future value (use Exhibit 1-A) Projected annual retirement living expenses, adjusted for inflation (A) Estimated Annual Income at Retirement Social Security income Company pension, personal retirement account income Investment and other income Total retirement income Annual shortfall of income after retirement (A-B) Expected years in retirement Expected annual rate of return before retirement Expected annual rate of return on invested funds after retirement Future value factor for a series of deposits (use Exhibit 1-B) Annual deposit required to accumulate the amount needed (D) (C) 30
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
Dare2Dream Donuts Inc. (D2DD) is a CCPC owned by Alec & Isla Smook. As their tax advisor, you are currently completing D2DD's corporate tax return, and have calculated taxable income as follows: $...
-
Oregon Inc. $10 par common stock is selling for $110 per share. Four million shares are currently issued and outstanding. The board of directors wishes to stimulate interest in Oregon common stock...
-
Alkrom plc, an oil trader, commenced trading on 1 January and had the following opening statement of financial position. On 1 January Alkrom plc acquired offices at a cost of 4m, and 320,000 barrels...
-
Special order decision given revised data (Learning Objective 2) Consider the ACDelco special sales order example on pages 419-421. Suppose ACDelcos variable manufacturing cost is $1.35 per oil...
-
American Bikes manufactures custom motorcycle racing equipment and parts. The company engages in the following activities (not in sequence): a. Shipping product to the customer b. Processing mail-in...
-
Microsoft Word - Document8 Question 1 (8 marks) You are an analyst for an international investment house. You are preparing an annual analyst?s report on Bright Star Limited after the release of its...
-
Oriole Corporation enters into a 7 - year lease of equipment on December 3 1 , 2 0 2 4 , which requires 7 annual payments of $ 3 8 , 2 0 0 each, beginning December 3 1 , 2 0 2 4 . In addition, Oriole...
-
John is voluntarily turned over to the custody of the state of Florida. John is autistic. He is placed in a foster home with five (5) other children. John's autism requires specialized care which he...
-
Blossom Oil Company is considering investing in a new oil well. It is expected that the oil well will increase annual revenues by $136,250 and will increase annual expenses by $74,000 including...
-
You are negotiating the terms of a $500,000 loan for a new piece of equipment. What type of loan (amortization), interest rate, and term would you negotiate?
-
1. Why is the equilibrium point considered the just price for a good in a perfectly competitive market? It is the price where the seller and buyer both agree on the worth of the good. It is the price...
-
In which three ways have the new IT developments spurred innovation and international expansion in financial markets? Explain
-
reply to Under U.S. GAAP, PP&E is typically reported at historical cost less accumulated depreciation. This means that assets are initially recognized at the amount paid to acquire them and...
-
The words without recourse on an indorsement means the indorser is: a. not liable for any problems associated with the instrument. b. not liable if the instrument is dishonored. c. liable personally...
-
Prepare and interpret a performance report (Learning Objective 2) Refer to the Digital Technologies data in P11-47B. The company sold 11,000 units during October 2007, and its actual operating income...
-
Comprehensive flexible budget, standards, and variances problem (Learning Objectives 2, 3, 4, 5) Relax-the-Back manufactures leather recliners and uses flexible budgeting and a standard cost system....
-
(Appendix) Journalize standard cost transactions (Learning Objective 6) Refer to the data in PI 1-5 IB. Journalize the usage of direct materials and the assign ment of direct labor, including the...
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App