Client Case

You have met with your clients a few times and are now ready to do their retirement needs analysis $($RNA$).$ The couple, filing Married Filing Jointly $($MFJ$),$ are both $39$ years of age and expect to work another $23$ years. They both plan on living to age $93.$ He currently earns $$60,000$; her $$58,333.$ Returns are expected to be $8\mathrm{.}2\%$ and inflation $3\mathrm{.}1\%.$ You and the clients have determined that they will cut $$47,234$ of their current expenses out upon retirement, but that they will see an increase of $$21,200$ in other areas.

Given the information above, please calculate the following for your client:

What is your client's Wage Replacement Ratio?

How much will they need to have saved at retirement to retire based on their WRR$?$

How much will they need to save each year from now until retirement to retirement comfortably?

How much will they need to save each year from now until retirement if they currently have saved $$125,000$ jointly in thei$=401($k$)\text{'}$s and ROTH IRAs?

If they currently have $$400,000$ saved, what annual rate of return do they need to earn, if they save $$2,500$ per month from now until retirement?