Question
Martha has been calculating how much she needs in her 401K at retirement when she is 67. She expects to need to take $50,000 at
Martha has been calculating how much she needs in her 401K at retirement when she is 67. She expects to need to take $50,000 at the end of each year and is planning for a 25 year retirement, which brings her to 92. If she earns about 6.5% return on her investments in retirement, how much savings will she needs to accumulate at retirement to achieve her goal?
If she wants to include inflation to maintain her purchasing power, how much will she need if she wants to maintain a $50,000 amount after including 3% inflation? (Hint: must adjust rate by ((1+R/1+I) - 1)
If she were to receive about $15,000 per year in social security, which adjusts for inflation automatically, how much will she need if she wants to maintain a total of $50,000 after including 3% inflation? (Hint: must adjust rate by ((1+R/1+I) - 1)
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