please look at the attached retirement topic mini case and answer the questions related to it.

Mini Case - Sally General Assumptions Sally Age - 35 Single Small Business Owner/Consultant (sole proprietorship) No Children Life Expectancy: 105 Retirement Age: 60 Inflation: 3% Investment Return: 9% (before and after retirement) Financial Legacy Goal: 0% Income Current Income (net self-employment Schedule C income): $175,000 Future Income: Social Security (SS) is estimated to be $30,000 (today's dollars). Given Sally's young age and her concern about the long-term financial stability of the SS system, she wants to assume $0 SS benefits in her financial plan. Wage Replacement Ratio: 70% of current net self-employment Schedule C income Expenses Taxes: Federal & State combined marginal income tax rate 33% (Sally expects her tax rate to be lower in retirement) Current Savings No regular savings. Sally just started making significant income in her business and is ready to start allocating money towards retirement savings. Current Assets Current Assets: $0 Given her high income in 2016, she would like to reduce her current tax burden as much as possible. Sally has been investing all excess income back into her business in previous years. This year (2016), she earned significantly more than in 2014 ($60,000 more!). Her Total current business does not require expenses: $100,000 this significant of an (including federal and investment in 2016. She state income taxes) expects business cash flows to continue to fluctuate in future years since her business is still very young, so flexibility is important. She has no employees. 1) How much of Sally's current income does she need replaced annually in retirement (in TODAY's dollars)? a. $108,933 b. $115,717 c. $122,500 d. $175,000 2) Of the amount needed under #1, how much does Sally need annually in retirement from her investment portfolio in TODAY's dollars? a. $78,933 b. $92,500 c. $108,933 d. $122,500 3) Of the amount needed under #2, how much does Sally need annually in retirement from her investment portfolio in FUTURE dollars? Mini Case - Sally a. b. c. d. $165,268 $193,675 $228,082 $256,488 4) What is the total investment capital needed at retirement based upon Sally's financial legacy goal? a. $3,064,585 b. $3,243,104 c. $4,058,504 d. $4,294,922 5) What is Sally's annual required savings, assuming she saves at the end of each year until retirement? a. $36,181 b. $38,289 c. $47,916 d. $50,707 6) If Sally expected to receive $250,000 in an inheritance from her grandmother immediately, how much would she need to save annually to meet her retirement goals, assuming she fully invested the inheritance immediately upon receipt? a. $0 b. $12,837 c. $22,464 d. $25,255 e. $76,158 f. The required annual savings as calculated under #5 would not change. 7) Could Sally save the amount calculated under #5 in 2016 based upon her current income and expenses? a. Yes b. No 8) What type of retirement savings plan would be the best fit for Sally given her goals and characteristics highlighted in the case detail? a. Traditional IRA b. Roth IRA c. SEP IRA d. Roth Single (solo) 401(k) e. Traditional Single (solo) 401(k) f. Defined Benefit Pension Plan 9) What is the total amount of FICA tax that Sally owes in 2016? a. $19,381 b. $19,769 c. $24,727 d. $26,775 Mini Case - Sally 10) Based upon the best fit plan (i.e. the correct answer) under #8 and given Sally's 2016 net selfemployment income of $175,000, what is the maximum amount Sally could save in her newly established retirement plan for 2016? a. $5,500 b. $33,062 c. $35,000 d. $43,750 e. $51,062 f. $53,000 g. None of the above, Sally would need to hire an actuary to calculate her maximum savings amount