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Janine is 25 and has a good job at a biotechnology company. Janine estimates that she will need $896,000 in her total retirement nest egg
Janine is 25 and has a good job at a biotechnology company. Janine estimates that she will need $896,000 in her total retirement nest egg by the time she is 65 in order to have retirement income of $29,000 a year. (She expects that Social Security will pay her an additional $20,500 a year.) She currently has $6,000 in an IRA, an important part of her retirement nest egg. She believes her IRA will grow at an annual rate of 7 percent, and she plans to leave it untouched until she retires at age 65 . How much will Janine's IRA be worth when she needs to start withdrawing money from it when she retires? Use (Exhibit 1-A, Exhibit 1-B, Exhibit 1- Note: Use appropriate factor(s) from the tables provided. Round time value factor to 3 decimal places and answer to 2 decimal places. Exhibit 1-B Future Value (Compounded Sum) of \$1 Paid In at the End of Each Period for a Given Number of Time Periods (an Annuity)
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