Activity:

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

Assume you are at age $67$ and will retire now! You the following assets:

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 $4\mathrm{.}25\%$ interest per year on the

annuity. You will get monthly payments from your annuity for $20$ years and nothing thereafter.

Social Security $-$ $$38,400$ per year for $20$ years. Assume this is the total amount you will receive each year for $20$ years. This means that there will no increases to this yearly total for $20$ years.

Savings worth $$200,000.$ You plan to take a simple ordinary annuity on your saving which will withdraw all assets of your savings in $20$ years. Assume $3\mathrm{.}15\%$ interest per year. You will get monthly

payments from your annuity for $20$ years and nothing thereafter.

Answer the following questions considering that you are now retired and have the above$-$mentioned monies and annuities:

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.

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.

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.

Is the total amount enough to retire comfortably in your dream state of Massachusetts for $20$ years? What are your thoughts?

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 $$3,200,000$ excluding social security

benefits when you retire at age $67$ and live comfortably for the next $20$ years after retirement. For simplicity, do not factor in Social Security. What are your plans to make the required savings of

$$3,200,000?$ Provide calculations and explanations. Your plans should be realistic and not farfetched.