According to some financial experts, you need to have somewhere in the range of $1.5 million or more saved to retire comfortably right now in America for 20 years. If that figure seems unattainable, or even just a bit intimidating, at first glance, don't worry, it's a broad estimate. In fact, plenty of people can retire now comfortably with quite a bit less than $1.5 million in their savings account. How much money you need to retire is really all about where you live.

You have decided to stay in paradise, Colorado. The savings you need now to retire comfortably in Colorado is $1,685,000.

Activity:

Determine whether you have enough monies to live comfortably each year for 20 years in your dream state of Colorado.

Assume you are at age 67 and have the following assets:

1. Government Pension Plan worth $500,000. You plan to take a simple ordinary annuity on your pension which will withdraw all assets of the pension in 20 years. Assume 3.75% interest per year on the annuity. You will get monthly payments for 20 years and nothing thereafter.
2. Social Security - $39,000 per year for 20 years. Assume this is the amount you will receive each year for 20 years.
3. Savings worth $140,000. You plan to take a simple ordinary annuity on your saving which will withdraw all assets of your savings in 20 years. Assume 2.9% interest per year. You will get monthly payments for 20 years and nothing thereafter.

Answer the following questions.

1. What will be the monthly amount received individually from the pension plan, social security, and savings? What will be the monthly total? Round all 4 answers to the nearest penny.
2. What will be the yearly amount received individually from the pension plan, social security, and savings? What will be the yearly total? Round all 4 answers to the nearest dollar.
3. What will be the 20-year amounts received individually from the pension plan, social security, and savings? What will be the 20-year total amount? Round all 4 answers to the nearest dollar.
4. Is the total amount enough to retire comfortably in your dream state of Colorado for 20 years? What are your thoughts?
5. 
   
6. Assume that you are age 18 and not age 67; therefore, you will start fresh (i.e., you have no assets and savings). It is projected that you will need to have a saving of $3,000,000 when you retire at age 67 and live comfortably for the next 20 years. For simplicity, do not factor Social Security. What are your plans to make the required savings of $3,000,000? Provide calculations and explanations. Your plans should be realistic and not farfetched.