You are 25 years old, expecting to retire at 65 (40 years). You want to pay yourself
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You are 25 years old, expecting to retire at 65 (40 years). You want to pay yourself a $75,000 a year from your 401k fund, and want it to last 25 years (until you are 90).
Question 1: How much do you need to have on hand at 65 if, during retirement (the next 25 years), you earn an average return of 5%. (PV of an Annuity table)
Question 2: Now that you know how much you need at 65 to fund your retirement, how much do you need to save annually between the ages of 25 and 65. Assume your average return is 9% annually. (FV of Annuity table)
Question 3: If inflation is 3% a year, how much is $75,000 pension in 40 years from now worth in 2022 dollars. (PV of $ dollar table)
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