Bill (age 42) and Molly Hickok (age 39), residents of Anchorage, Alaska, recently told you that they have become increasingly worried about their retirement. Bill, a public school teacher, dreams of retiring at 62 so they can travel and visit family. Molly, a self-employed travel consultant, is unsure that their current retirement plan will achieve that goal. She is concerned that the cost of living in Alaska along with their lifestyle have them spending at a level they could not maintain. Although they have a nice income of more than $100,000 per year, they got a late start planning for retirement, which is now just 20 years away. Bill has tried to plan for the future by contributing to his 403(b) plan, but he is only investing 6 percent of his income when he could be investing 10 percent. Use what they told you along with the information below to help them prepare for a prosperous retirement.

Molly's income	$79,000
Bill's income	$42,500
Social Security income at retirement	$2,550/month
Current annual expenditures	$72,500
Bill's Roth IRA	$20,500
Bill's 403(b) plan	$47,400
Marginal tax bracket	25 %

2. Calculate the projected annual income at retirement that will be generated by their portfolio assuming an 8 percent nominal rate of return, a 20-year retirement period, and no further contributions. Assuming no further contribution into either retirement account, and a fixed withdrawal rate, their after-retirement annual income would be approximately ............. (Round to the nearest dollar.)