George (age 44) Contributes $1,625 to his 401(k) each month Employer matches 100% of the first 3% and 50% of the next 2% of Georges salary Would like to retire at age 67 Social Security benefit estimate in todays dollars is $2,050/month at age 67 Jane (age 44) Contributes $7,750 per year to a Simplified Employee Pension (SEP) plan Would like to retire at the same time as George Social Security benefit estimate in todays dollars in $1,725/month at age 67 George and Jane would like to have $125,000/year (in todays dollars) at retirement The Jetsons expect inflation to average 3% per year during their lifetime George and Jane each expect to live to age 95 They expect their invested money to average a 9% per year return during their lifetime Georges 401(k) balance is $625,000 Janes SEP balance is $95,000 Investment account balance is $45,000 Bank CD balance is $75,000 (at 1.5% interest)

1) Using the Purchasing Power Preservation Method, calculate how much capital the couple needs to retire at their goal ages using only retirement account assets.