Cedric wants to retire in 15 years when he turns 65. He wants to have enough money to replace 75% of his current income less what he expects to receive from Social Security at the beginning of each year (i.e. annuity due). He expects to receive $20,000 per year from Social Security in todays dollars. Cedric is conservative and wants to assume a 6% annual investment rate of return and assumes that inflation will be 4% per year. Based on his family history, Cedric expects that he will live to be 95 years old. If Cedric currently earns $100,000 per year and he expects his raises to equal the inflation rate, approximately how much does he need at retirement to fulfill his retirement goals?

a.

$1,268,887

b.

$2,242,055

c.

$2,262,780

d.

$3,057,348