Question
Pat is the type to plan everything in advance, and she is already starting to plan for retirement. She currently has $0 in her retirement
Pat is the type to plan everything in advance, and she is already starting to plan for retirement. She currently has $0 in her retirement account. She plans to work for 40 years, and then retire for the following 30 years. She expects to spend $120,000 in her first year of retirement, with a 4% growth rate. She will increase her working-years savings rate by 7.5% per year. While working, she expects her account will have a 6.75% return, and during retirement it will have a 4.75% return. After the 30th year of retirement, she wants to have $600,000 in her account for safety net and bequest reasons (It is fine if the amount is not exactly $600,000 due to rounding error). To solve the problem, determine how much Pat needs to save in year 1 to accomplish her retirement goals (use Solver or Goal Seek).
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