Question
Jack would like to retire in 10 years when he turns 62. He wants to have enough money to replace 60% of his current income
Jack would like to retire in 10 years when he turns 62. He wants to have enough money to replace 60% of his current income less what he expects to receive from Social Security at the beginning of each year. He expects to receive $10,000 per year from Social Security in todays dollars. Jack is conservative and wants to assume an 8% annual investment rate of return and that inflation will be 4% per year. Based on his family history, Jack expects that he will live to be 108 years old. If Jack currently earns $150,000 per year and he expects his salary increases to equal the inflation rate, what amount of money will he need at retirement?
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