Need Help with the following questions. My answers are in bold. I just want to make sure I got the right answer. Thanks Elin wants to retire in 20 years when she turns 60. Elin wants to have enough money to replace 120% of her current income less what she expects to receive from Social Security. She expects to receive $20,000 per year from Social Security in todays dollars. Elin is conservative and wants to assume a 6% annual investment rate of return and assumes that inflation will be 3% per year. Based on her family history, Elin expects that she will live to be 95 years old. If Elin currently earns $100,000 per year and expects her raises to equal the inflation rate, approximately how much does she need at retirement to fulfill her retirement goals?

$3,880,831.

$3,930,814.

$3,997,256

$4,045,303.

Lori, a self-employed pediatrician, currently earns $200,000 annually. Lori has been able to save 15% of her annual Schedule C net income. Assume that Lori paid $19,000 in social security taxes, and that she plans to pay off her mortgage at retirement, thereby relieving her of her only debt. Lori presently pays $4,333.33 per month toward the mortgage. Based on the information provided herein, what do you expect Loris wage replacement ratio to be at retirement?

41.0%.

49.5%.

59.0%.

67.0%.

Saben is 40 and wants to retire in 20 years. His family has a history of living well into their 90s. Therefore, he would like to plan on living until age 100, just in case. He currently needs $100,000 and expects that he will need about 80% of that if he were retired. He can earn 9 percent in his portfolio and expects inflation to be 3 percent annually. Some years ago, he purchased an annuity that is expected to pay him $30,000 per year beginning at age 60. It includes an inflation rate cost of living adjustment. In addition, he received $500,000 from his uncle BJ when he died. Saben has spent $200,000 on his home, but is investing $300,000 for his retirement. His Social Security benefit in todays dollars is $20,000. Which of the following statements is true?

Saben needs to accumulate approximately $1,205,578 by age 60 to fund his retirement.

Sabens current savings and other sources of income are adequate to satisfy his retirement needs.

Saben needs to save approximately $9,300 per year for the next 20 years to fund his retirement.

Saben needs to save approximately $7,926 per year at year end for the next 20 years to fund his retirement.

Steven, age 43, earns $80,000 annually; and his wage replacement ratio has been determined to be 80%. He expects inflation will average 3% for his entire life expectancy. He expects to work until 68, and live until 90. He anticipates an 8% return on his investments. Additionally, Social Security Administration has notified him that his annual retirement benefit, in todays dollars will be $26,000.

Using the capital preservation model, calculate how much capital Steven needs, in order to retire at 68.

$154,974.9475.

$1,061,342.08.

$1,217,311.57.

$1,317,564.25.