Question
Retirement problem You plan to retire 33 years from now and you expect to live for 27 years after retiring. You want to have enough
Retirement problem
You plan to retire 33 years from now and you expect to live for 27 years after retiring. You want to have enough money upon reaching retirement age to withdraw $180,000 from the account at the beginning of each year you expect to live, and yet still have $2,500,000 left in the account at the time of your expected death (60 years from now). The company that just hired you, gave you a $5,000 sign on bonus. You plan to accumulate the retirement fund by making equal annual deposits (at the end of each year) for the next 33. For the first 10 years, you will deposit $2,000 annually in an account earning 12%. What equal annual deposits must you make each at the end of each year, after year 10 (for 23 years), to reach your retirement goal? You only expect to earn 6% per year on your investment after you retire since you will choose to place the money in less risky investments. Draw the timeline.
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