Question
Megan and Ryan (both age 56) are working with a financial planner to develop a retirement plan. Their current annual expenses are $118,000 ($93,000 for
Megan and Ryan (both age 56) are working with a financial planner to develop a retirement plan.
Their current annual expenses are $118,000 ($93,000 for living expenses and $25,000 for income taxes).
Their current annual living expenses of $93,000 will adjust in retirement as follows:
1. Increase $6,000 for higher vacation costs.
2. Increase $12,000 ($6,000 per person) for medical expenses.
3. Increase $12,000 ($1,000 per month) for a second home in Florida.
4. Decrease $14,000 due to a reduction in auto, clothing, retirement contributions, and FICA taxes.
5. Decrease $24,000 because their mortgage will be paid off.
6. Decrease $4,000 because of a deline in income taxes.
What is their total annual post-retirement period expenses (in today's dollars), including income taxes? (Do not include decimals or cents in your answer)
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