Leah is looking forward to retirement and hopes to be able to retire (stop working) when she is 65. Her wage replacement ratio is estimated to be 80%. Given Leahs health and family history, a conservative estimate for her life expectancy is 90 years. Leahs Social Security benefit statement indicates that her Social Security retirement benefit (in todays dollars) is $18,000 per year. Her annual earning is $110,500.

What amount of retirement funds will she need at retirement in order to maintain her standard of living until age 90? Assume Leah can earn 5% on her investments up to and during retirement, and that the rate of inflation over the rest of her life averages 3% per year.