Continuing Case 65. Retirement Income Forecast Jansie Lee and Ross, now 57 and stil wery nctive, have plenty of time on their hands now that the triplets are away at college. They both realzed that time has just flown by; over twenty. four years have passed since they married! Looking back over the past years, they realized that they have worked hard in their careers, Jamie Lee as the proprietor of a cuncake cafe and Ross, self-employed as a web-page designer. They have enjoyed raising theif family and strived to be firanciaily sound as they we looking to retirement that is just around the corner. They saved regularly and imvested wisely over the years. They rebounded nicely from the economic crisis over the past few years. as they watched their investments closely and adjusted their strategies when they felt it necessary. They purchase vehicles with cash and do not carry credit card balances, choosing instead to use theer for convenlence only. The triplets are pursuing their master's degrees and have tuition covered through workistudy programs at the university. Jamie Lee and Ross are just a few short years from realizing their goais of retiring ot 65 and purchasing a home at the beaciht They are reviewing their financial situation to ensure they wil be ready for rekiement. They anticipate being able to live comfortabiy with 80% of their current expenses, The rate of return on their investments until they retire is 3%. They expect this percentage fo drop to 2% after retirement. Use this information, along with Exh bit 1.A. Exhibit. 1.8. and the information provided below to determine the annual deposit amount Jamie Lee and Ross will need to make until they retire in order to make up the shortfall between theil estimated expenses and income needed during retirement. Each answer must have a value for the assignment to be complete. Enter "o" for amy unused categories. Curfent Expense Amounts (Jamie Lee and Ross Combined) Fixed expenses: $4,300/month Variable expenses: $2,200 imonth Estimated Income Amounts (Jamie Lee and Ross Combined) Social Security: $2.350 imonth Current IRA balance: $81,000 Estimated IRA withdrowal: $400/ month Other investments: $32,900 /year Estimated Annual Retirement Living Expenses Estimated annual living expenses if retiring today Number of years until retirement Expected annual rate of return before retirement Future value (use Exhibit 1-A) Projected annual retirement llving expenses, adjusted for inflation (A) (B) (C) Expected years in retirement Expected annual rate of return before retirement Expected annual rate of retum on invested funds after retirement (D) Future value factor for a series of deposits (use Exhibit 1-B) Annual deposit required to accumulate the amount needed
