Donald, age 40, earns $95,000 annually; his wage replacement ratio has been determined to be 70%. He expects inflation will average 3% over his entire life expectancy. He expects to work until 67, and live until 95. He anticipates a 7.5% return on his investments. Donald does not expect to receive any Social Security retirement benefits.

1. Calculate Donald's annual retirement needs in today's dollars.

a. $29,000. b. $55,000. c. $66,500. d. $95,000. e. $105,500.

2. What is the amount of Donald's first retirement distribution at age 67?

a. $110,825.08. b. $143,576.36. c. $147,715.72. d. $210,981.86. e. $235,788.15.

3. Calculate Donald's capital needed at retirement age 67.

a. $1,709,569.80. b. $1,837,787.53. c. $2,359,975.87. d. $2,463,081.61. e. $2,678,018.16.