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• 55 points) Show your working i.e. TVM variables Your clients, Tom and Melissa Sampson (age50), want to retire when they are 70 and want to provide 25 years of income during retirement. Based on their current level of living, they would like to provide for $100,000/year (in current dollars) during retirement. They currently have $500,000 in Roth IRAs. Social Security will provide $40,000/year in current dollars. They have made the following rate estimates: 3.0% inflation before and after retirement, 6.0% return on investments before retirement, and 5.0% return on investments after retirement. Assuming they are willing to liquidate the principal during retirement and they will save at the end of the period and withdrawal at the beginning, find:

How much they will need to save each year toward retirement in order to take annual distributions, and

How much they will need to save each month in order to take monthly distributions.