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9. Suppose the Halls should be able to accumulate $2.6 million at retirement, and want to create an annual spending plan following Case 2 in
9. Suppose the Halls should be able to accumulate $2.6 million at retirement, and want to create an annual spending plan following Case 2 in the previous quesiotn and the same extra funds. How much can they afford to spend in the first year in retirement? Think of Goal-Seek in Excel! Tax rate = 22% | ||||||||||
Retirement nest egg | $ 2,600,000 | |||||||||
Annual Inflation Rate | 2.6% | |||||||||
Annual Investment Yield After Retirement | 5.00% | |||||||||
Retirement Age | 68 | |||||||||
Expected age at death | 91 | |||||||||
Number of Years during Retirement | 24 | `=Age at death - retirement age +1 | ||||||||
First Year Regula Income | $100,000 | Hint: use C10 for "By changing cell" value of "Goal Seek." Use 100,000 as the starting value. | ||||||||
First Year Total Income | $127,000.00 | |||||||||
Age | Regular Income | Extra funds | Total Income | Present Value of the retirement account at Retirement (NPV) | ||||||
68 | $ 100,000 | Use this NPV as "Set Cell" in Goal Seek |
Please explain formulas used
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