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Henry, while still a young man, is starting to think about his retirement. He plans to retire 35 years from today. Beginning 1 year after
Henry, while still a young man, is starting to think about his retirement. He plans to retire 35 years from today. Beginning 1 year after he retires, he wants to withdraw $25,000 from his retirement savings account and he wants to be able to do this at the end of each of the full 30 years of his retirement. Henry thinks he will be able to earn a 4% rate of return on his savings over the entire 65 years that covers both his time to retirement and afterwards. Henry also believes he is very lucky and that on the day he retires he is confident he will win $150,000 in the lottery which he plans to put in his retirement savings account to help fund his retirement withdrawal plans. Henry has asked you to advise him how much he would have to save each year until he retires (including the impact of his sure thing lottery winnings) to have enough money to fund his retirement withdrawal plans. Henry plans to begin making annual deposits one year from now.
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