You are currently 21 years old and plan on retiring at age 67. Based on current life
Question:
You are currently 21 years old and plan on retiring at age 67. Based on current life tables and family history, you anticipate living another 17 years after retirement You estimate that you will need $142,300 in after-tax income per year in retirement,during which time all withdrawals from your retirement saving will be taxed at 20% .Assume that you can earn 6% per annum on your investments and these investments gains are not taxed
1-How much before tax income do you need in retirement each year in order to meet your retirement needs?
2-How much money do you need at the start of your retirement to meet the before-tax income demands during retirement? Assume your first withdrawal from your retirement fund is at the end of the first year of your retirement.
3-How much money do you need today to meet your before-tax income demands during retirement if you will start to withdraw your retirement fund at the end of the first year of your retirement?
4- Assuming you do notcurrently have any savings, how much do you have to save each year during your working years to ensure that you will have enough for your retirement supposing you will save at the of each year until you are 67?