Robin is planning for her retirement. She is currently 35 years old and plans to retire at
Question:
Robin is planning for her retirement. She is currently 35 years old and plans to retire at age 60 and live until age 95.
Robin currently earns $100,000 per year and anticipates needing 80% of her income during retirement. She anticipates Social Security will provide her with $15,000 per year leaving her with required savings to provide $65,000
($100,000 x 0.80 - $15,000) annually during retirement. She believes she can earn 11% on her investments and inflation will be 2% per year. How much must Robin save at the end of each year, if she wants to make her last savings payment at age 60 to meet her retirement goal?
a. $10,846.78.
b. $10,899.37.
c. $11,861.07.
d. $13,414.60.
Step by Step Answer:
Fundamentals Of Financial Planning
ISBN: 9781936602094
3rd Edition
Authors: Michael A Dalton, Joseph Gillice