You are only 24 years old but wise enough to know that life passes fast, and you
Question:
You are only 24 years old but wise enough to know that life passes fast, and you are thinking about life after work. As a UNT graduate, you estimate that your starting gross salary will be about $65,000. This salary is likely to grow at 2% per year (in nominal terms, including inflation) until your retirement at the age of 65 (you will work and save for 40 years). You will be paying about 30% in taxes.
You think that you should need about $2,000,000 in savings when you retire.
You will start working next year, at the age of 25. You will also start saving next year, at the age of 25.
You are planning to save and invest some money every month. You estimate that the average after-tax return on the savings will be 8%.
Question:
You wonder how much (approximately) you need to save every month, as a percentage of your salary, to have $2,000,000 at the age of 65.
Data Analysis and Decision Making
ISBN: 978-0538476126
4th edition
Authors: Christian Albright, Wayne Winston, Christopher Zappe