Question
Question 5 Amadou is 40 years old and plans to retire at age 65. He estimates that his employment income will be (40% * MAT)
Question 5
Amadou is 40 years old and plans to retire at age 65. He estimates that his employment income will be (40% * MAT) just before he retires and that he will need 75% of this amount to support his cost of living during his retirement years. Here is the income he expects to receive during retirement:
- CPP $10,500- Old Age Security $6,000
- RPP from his employer$30,000
required
a) Will this estimated income be enough to support Amadou's cost of living? If not, how much is missing?
b) How much money would he need to have on hand at age 65 to allow him to withdraw the amount you found in the previous question each year until age 85? Assume that the return on the funds is 6% per year.
c) If Amadou were to start saving now at a rate of return of 6% per year, how much would he have to invest annually to accumulate the amount you found in the previous question?
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