#4 please

Aling the parents has wave enjoyed their be t aside more than HOUSEHOLD SAVING AND not be SU Wau, assuming the arents are likely to have eni allowing them to put aside, rs for investments to como horrowing to meet college coste compound. In the ege costs, taking the on student loan retirement. In fact, the double whammy might not b prepared properly. On the plus side. older parents a camings years before the college costs begin, allow younger parents can. They've also had more vere ideal situation, older parents can avoid borrowin preferred route of earning interest on investments ro (Excerpted from Jeff Brown's Personal Finance May 11, 1998.) younger paren, older parents terest on invest carmeer parents can parents can avo investments rather than paying it on sing the nal Finance column in the Philadel Philadelphia Inquirer wish to retire at age 65. You ex 5. You expect to be able r your lifetime (both prior to ycare 4. Assume that you are 40 years old and wish to reti average a 6% annual rate of interest on your savin mgs over your life retirement and after retirement). You would like ave enough money to provide ame to supplement other som on an annual, income needs 88. o sur first contribution to the (social security, pension plans, etc.). Suppose you $8.000 per year beginning at age 66 in retirement income to ns, etc.). Suppose you decide that the extra vided for only 15 years (up to age 80). Assume that your fire savings plan will take place one year from now. a. How much must you save each year between now and retire and retirement to achieve you goal? between now and retirement, awal be worth in terms of today's b. If the rate of inflation turns out to be 0% | how much will your first $8.000 withdrar purchasing power? 5. You a 1 are saving for retirement and you come across the following table. It shoes percentage of your current salary that you should save for your retirement in ord retire with an annuity equal to 70% of your salary if you have not yet saved anything It assumes that your annual salary will remain constant in real terms until retirement and that you will live for 25 years after retiring. For instance, if you have 35 years lei before you retire and earn 3.5% per year on your investments, then you should sare 17.3% of your current salary. TABLE A Saving Rate Needed to Achieve 70% Replacement Rate