Jillian, a single woman age 25, has come to you for help in determining her financial need in retirement. She would like to retire at age 65, and expects to live to age 95. Her current pre-tax income is $50,000 per year. She estimates she will need 80% of her current income annually in retirement. Jillian, expects the her Social Security benefit will be $12,000 per year (in today's dollars). Inflation is expected to average 4%. Jillian expects to make 12% annual return on her investments. How much must Jillian save at the end of each year, beginning now, to meet her retirement goal? Step1. Determine the present value of annual income needed in retirement. Step 2. Inflate the PV of the annual income needed in retirement to a FV. Step 3. Determine the PV of the annual payments to be received while in retirement. Step 4. Determine the amount of the annual payment required to meet the goal to fund retirement Check numbers: $2187.8210 $28,000 $1,678,258.7557 $134,428.5776