5. Funding the nest egg shortfall Determining Retirement Shortfall Ryan and Rebecca have 25 years to retirement. They are taking a personal finance course and have calculated their projected retirement income and investment needs. Based on their calculations and taking into account their Social Security and pension incomes, they have a projected shortfall of $6,000.00 per year. Use the following tables to answer the questions about future value interest factors, Interest Factors ---Future Value Interest Factors--Future Value of an Annuity Periods 3.009 5.00% 8.00% 6.00% 3.210 9.00% 5.600 20 2.653 4.661 1.810 2.090 25 4.290 6.848 8.620 13.260 30 3.386 4.322 5.516 2.420 5.740 35 2.810 7.690 10.062 14.785 21.724 20.410 40 3.260 7.040 10.280 31.410 WOU Use the following tables to answer the questions doul TULUI Interest Factors Future Value Interest Factors Future Value of an Annuity 5.00% Periods 6.00% 8.00% 9.00% 3.00% 26.870 20 33.066 36.780 45.762 51.160 25 36.460 47.726 54.860 73.105 84.700 136.300 30 66.438 79.060 113.282 35 47.570 60.460 75.400 90.318 111.430 172314 215.700 337.870 40 120.797 154.760 259.052 The impact of the inflation factor Continuing their worksheet, they consult a friend, economics professor Dr. Garcia, who believes that they can expect the average annual inflation rate to be 5%, possibly 6% tops. Complete the following table by cateuating inflation-adjusted annual shortfall for Ryan and Rebecca at 5% Then recalculate the shortfall based on the top rato provided by Dr. Garcia, Interest rate Inflation-adjusted annual shortfall (Percent) (Dollars) 5 Funding the shortfall In addition to determining a realistic inflation rate, Ryan and Rebecca talked to their financial advisor to understand rates of return now and after they reach retirement. First, their advisor projects that in 25 years, they can realistically earn 5% on their nest egg. Second, he recommends an investment vehide that is earning 6% annually Funding the shortfall In addition to determining a realistic inflation rate, Ryan and Rebecca talked to their financial advisor to understand rates of return now and after they reach retirement. First, their advisor projects that in 25 years, they can realistically earn 5% on their nest egg. Second, he recommends an investment vehide that is earning 6% annually. Complete the following table using the inflation-adjusted annual shortfall at 5% as previously calculated, Interest rate (Percent) Amount of retirement funds required (Dollars) Description Amount of retirement fund required Annual savings required to fund nest ego