Jason wants to know how much money he needs to have in his retirement account on the
Question:
Jason wants to know how much money he needs to have in his retirement account on the day he retires. Jason makes the following ASSUMPTIONS:
--He will withdraw a DIFFERENT amount from his retirement account each year he is retired. He will adjust the withdrawals for inflation each year, following his first annual withdrawal.
--Jason wants to withdraw the equivalent of $75,000 (in terms of today's dollars) in the FIRST year he is retired. Following this, each withdrawal will be 3% larger than the last (withdrawals will be increased each year by 3% to compensate for expected inflation rate of 3% DURING retirement).
--Inflation is expected to be 2.5% per year between now and when Jason retires.
--Jason will retire in 30 years.
--Jason will be retired for 25 years.
--Jason expects his money to earn 6% annualy DURING his retirement.
--Jason expects his retirement account value to drop to zero ($0.00) at the end of his retirement.
Business Statistics
ISBN: 978-0321925831
3rd edition
Authors: Norean Sharpe, Richard Veaux, Paul Velleman