Grady Zebrowski, age 25, just graduated from college, accepted his first job with a

$53,000

salary, and is already looking forward to retirement in

40

years. He assumes a

3.9

percent inflation rate and plans to live in retirement for

20

years. He does not want to plan on any Social Security benefits. Assume Grady can earn a

10

percent rate of return on his investments prior to retirement and a

5

percent rate of return on his investments post-retirement to answer the following questions using your financial calculator.

a.Grady wants to replace 90 percent of his current net income. What is his annual need in today's dollars?

b.Using the table

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, Grady thinks he might have an average tax rate of

13

percent at retirement if he is married. Adjusting for taxes, how much does Grady really need per year, in today's dollars?c.Adjusting for inflation, how much does Grady need per year in future dollars when he begins retirement in

40

years?d.If he needs this amount for

20

years, how much does he need in total for retirement?

e.How much does Grady need to save per month to reach his retirement goal assuming he does not receive any employer match on his retirement savings?

Click on the table icon to view the FVIF table

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. Click on the table icon to view the PVIFA table

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. Click on the table icon to view the FVIFA table

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.

a. Grady's annual need in today's dollars is

$nothing.

(Round to the nearest dollar.)