Question: PLEASE ANSWER BOTH QUESTIONS!!! Your friend has a defined benefit plan and expects to retire at age 58 after 35 years of work, and the
PLEASE ANSWER BOTH QUESTIONS!!!
Your friend has a defined benefit plan and expects to retire at age 58 after 35 years of work, and the expected pension will be $40,000 a year. Your job has a 401k. Assume you also want to retire in 35 years, and want to be able to draw down $40,000 per year for the folllowing 30 years ( yes, there is a risk that you live past the age of 88). How much will you need to have amassed in order to generate the $40,000 income stream? How much will you have to save each year, for the next 35 years? Assume an investment rate of 5%?
If your employer has a 5% matching policy, and you contribute $15,000 to your 401k, how much will you actually have?
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