Retirement Information

William and Ava would like to retire on or before age 67. They both expect to live to age 92. They would like to have a standard of living equal to 70% of their preretirement income. They do not want to rely on Social Security benefits in planning for for their retirement.

Last year William began participating in a Section 401(k) plan available through Riverside Hospital. Under the plan, the hospital matches $.50 for every dollar contributed, up to 6% of his salary. The plan allows for deferrals up to a maximum of 7% of salary.

Section 401(k) Savings plan $11,900

5.If the Abadies choose to rely on Social Security benefits in their retirement planning, how much earlier than age 67 can they retire? Assume that at age 67 (in todays dollars) Williams Social Security benefit would be $29,820 and Ava spousal benefit would be $14,910. Use Williams salary only. (Please show your calculations.)