Question
Grady Zebrowski, age 25, just graduated from college, accepted his first job with a $50,000 salary, and is already looking forward to retirement in 40
Grady Zebrowski, age 25, just graduated from college, accepted his first job with a
$50,000
salary, and is already looking forward to retirement in
40
years. He assumes a
2.4
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
9
percent rate of return on his investments prior to retirement and a
6
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
LOADING...
,
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?
I need the correct answers rounded to the nearest dollar. If the answers are incorrect I will be giving thumbs down! Thank you!
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