Individual Retirement Plan

Your goal is to be able to have a comfortable lifestyle in retirement. You expect to retire at age of $67$

years old. You expect to be able to earn $9\mathrm{.}00\%$ return on your investments during your working life,

and $3\mathrm{.}00\%$ in retirement.

Question $1$: Calculate your TOTAL monthly budget in retirement. Clearly identify line$-$items

of spending. Use the following table as a template:

# Line Item of Monthly Expenditure Amount

$1$ Housing $($Mortgage or Rent$)$

$2$ Food

$3$ Transportation

$4$ Insurance

$5$ Entertainment

$6$

$7$

$8$

$9$

$10$

Total Monthly Budget:

Question $2$: Look up on$-$line your individual life expectancy based on your gender, race, level of

education, and other relevant demographic characteristics. Based on your life expectancy and

retirement age of $67$ y$.$o$.,$ calculate your retirement goal $($value of your individual retirement fund on

the first day of retirement$).$

Question $3$: Based on your current age and your individual answers to questions $1$ and $2,$ calculate

your required monthly contribution into your individual retirement fund. How much do you have to

save each month to be able to reach your goal?

A complete and correct answer phrased in complete sentences with relevant calculations$/$numbers is

required for full credit for each question.

Bonus questions:

$1.$ How much will you have contributed directly towards your retirement account until you$$re $65?$

$2.$ How much will you have earned from compounding of interest in your retirement account until

you$$re $65?$

$3.$ How will your answer to question $3$ change if you wait until graduate from LHU at age of $25$

yo old to start contributing to your individual retirement account?

$4.$ How will your answer to question $3$ change if you wait until you$$re $40$ years old to start

contributing to your individual retirement account?