Assume you want to retire 30 years from now, and you want maintain the same standard of living as you have today for another 20 years after retirement. Your annual income today is $75,000, and you expect the inflation rate to be 3% on average during the next fifty years. You currently do not have any savings and will start today to save money towards this retirement goal. Your expected rate of return on a diversified portfolio of funds with a long term time horizon is 7% on average during the saving years. During the retirement years, you expect to invest your money a conservative portfolio where the preservation of capital is the main priority; and therefore, you expect to earn only 3% during the 20 years of retirement. At the end of 20 years of retirement, you want to completely exhaust savings; i.e. your will have no money at all. Answer the following questions (note: the answers are rounded; select the closest match) Annual savings to achieve your retirement goal 30 years from now (ROR is 7% for 30 years) $38,500 $23,800 $43,350

$18,350