You are 40 years old and want to retire at age 55. Each year, starting one year from now, you will deposit an equal amount into a savings account that pays 7% interest. The last deposit will be on your 55th birthday. On your 55th birthday you will switch the accumulated savings into a bank account that also pays 7% interest. You will withdraw your annual income of $140,000 at the end of that year (on your 56th birthday) and each subsequent year until your80th birthday. On that birthday you want to give $750,000 to your children. 

How much do you have to save each year to make this retirement plan happen?

Answer rating: 100% (QA)

Heres how to calculate the annual savings amount needed for your retirement plan Phase 1 Saving unti... View the full answer