Assuming both Keith and Cindy plan to live to age 95, how much money do the Rosses need today in their separate retirement portfolio to fund their retirement? (Assume a pretax portfolio. They will pay income taxes out of the gross retirement income.) PLEASE EXPLAIN QUESTION IN FULL DETAILS. PLEASE PROVIDE A SIMPLIFIED BREAKDOWN OF THE ANSWER AS WELL. THANK YOU.

  
 

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Retirement Information Keith ■ Keith has a profit-sharing plan at Ross Big-N-Tall, Inc., with a balance of $1.35 million. Keith also has an IRA with a balance of $30,000 (see details). The IRA was established in 1999. Case 3 | Keith and Cindy Ross 5/18/2017 12:31:34 ■ Cindy is the beneficiary of all of Keith's retirement accounts. ■ The contingent beneficiaries on Keith's retirement accounts are Susie, David, and Mary. They are designated as equal beneficiaries. 39 Cindy ■ Cindy has a Section 401(k) plan in which she is able to defer up to 16% of her salary. The accounting firm matches $0.25 for each $1.00 she defers, up to 6% of her salary. The firm's total match is 1.5% of compensation. Keith is the benefi- ciary of all of Cindy's retirement accounts. Keith and Cindy are retiring today. Both Keith and Cindy expect to live until age 95. Keith and Cindy have estimated that they need $250,000 per year in today's dollars for retirement. This amount would drop by 25% if only one was alive. Retirement Information Keith ■ Keith has a profit-sharing plan at Ross Big-N-Tall, Inc., with a balance of $1.35 million. Keith also has an IRA with a balance of $30,000 (see details). The IRA was established in 1999. Case 3 | Keith and Cindy Ross 5/18/2017 12:31:34 ■ Cindy is the beneficiary of all of Keith's retirement accounts. ■ The contingent beneficiaries on Keith's retirement accounts are Susie, David, and Mary. They are designated as equal beneficiaries. 39 Cindy ■ Cindy has a Section 401(k) plan in which she is able to defer up to 16% of her salary. The accounting firm matches $0.25 for each $1.00 she defers, up to 6% of her salary. The firm's total match is 1.5% of compensation. Keith is the benefi- ciary of all of Cindy's retirement accounts. Keith and Cindy are retiring today. Both Keith and Cindy expect to live until age 95. Keith and Cindy have estimated that they need $250,000 per year in today's dollars for retirement. This amount would drop by 25% if only one was alive.

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Assuming both Keith and Cindy plan to live to age 95 they would need a combined total of 2711111 in their retirement portfolio today to fund their ret... View the full answer