Tula, age 33, is thinking about investing for retirement. She plans to retire when she turns...

 

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Tula, age 33, is thinking about investing for retirement. She plans to retire when she turns age 62. At that time, she will need $1.2 million in assets. She has calculated that inflation will average 3.5% over her lifetime. She can earn an average annual 7.75% rate of return on investments. If Tula has $300,000 currently saved and can earn an annual average real rate of return of 4%, will she meet her retirement goal? Tula, age 33, is thinking about investing for retirement. She plans to retire when she turns age 62. At that time, she will need $1.2 million in assets. She has calculated that inflation will average 3.5% over her lifetime. She can earn an average annual 7.75% rate of return on investments. If Tula has $300,000 currently saved and can earn an annual average real rate of return of 4%, will she meet her retirement goal?

Answer rating: 100% (QA)

To determine if Tula will meet her retirement goal we need to calculate the future value of her investments and savings when she turns 62 adjusted for ... View the full answer