PleaseRespondto the following:

1. What role does inflation play in the amount of money that people need to save for retirement?

2. If inflation goes up does that mean that someone needs more or less money for retirement?

3. Use the below table to calculate how much yearly income each salary level will need to get 85% of their preretirement income.

Preretirement Salary	Percentage of Income Replaced by Social Security	Extra Income Needed
$20,000	45%	$8,000
$30,000	40%	$13,500
$40,000	33%	$20,800
$60,000	25%	$30,000
$100,000	15%	$70,000

4. Luka is curious to know how much his pension is worth that will pay him $2,100 a month. He has just retired at the age of 65. Use the above table to find out how much his pension is worth if he has the average life expectancy. Assume a "risk-free,"inflation-adjusted annual rate of 2.5%; also assume that he has no dependents or spouse so these extra payments will not occur when he is dead.

N	I/Y	PV	PMT	FV

5. Well, Luka made it to his 80^thbirthday so how much is his pension worth now?

N	I/Y	PV	PMT	FV

6. Let's suppose that Luka makes it to his 110^thbirthday. How much is his pension worth?

N	I/Y	PV	PMT	FV

7. Mia is thinking about moving her traditional IRA to a Roth IRA. Making this change will lead to a loss of 15% of her retirement savings. She has $600,000 saved and needs to withdraw $3,500 per month after taxes. She expects her tax rate to be an average of 20% in retirement. This money is and will remain invested at a rate of 6%. How long with her money last under each type of IRA.

Traditional IRA

N	I/Y	PV	PMT	FV

Roth IRA

N	I/Y	PV	PMT	FV

8. How would the above analysis change if you knew that she would collect $2,000 in social security benefits each month?

Traditional IRA

N	I/Y	PV	PMT	FV

Roth IRA

N	I/Y	PV	PMT	FV

9. What is probate?

10. What is the role of an executor of a will?

11. Find at least six different reasons that you may need a will or trust.

12. How could an estate plan be used to encourage an heir to go to college?

13. Why might it be advantageous to have a professional trustee versus a family member who acts as a trustee for your estate?