Mike, age 48, has $60,000 saved for retirement. He is currently savings 10% of his annual income of $50,000 monthly. His employer matches his savings contributions with $1,500 annually, paid monthly. Mike projects inflation will be 3.5% and he can earn 9.5% before and during retirement. Mike needs a wage replacement ratio of 75% of his preretirement income. He plans to retire at age 62 with Social Security benefits of $10,000 in todays dollars. His life expectancy is age 90.

How much will Mikes salary be at age 62 assuming his income increases yearly equal to the inflation rate? (3 points)

How much will Social Security benefits expected to be at age 62? (3 points)

What will be Mikes retirement income need in the first year of retirement, taking into consideration his anticipated Social Security Income (adjust for inflation)? (6 points)

How much capital will Mike need at age 62 to fund his retirement? (8 points)

How much will Mike have at age 62, assuming he continues his current savings and investment program? (10 points)