Retirement saving problem: You are a personal financial adviser at American Express, and are advising a client on setting up her retirement plan. Your client expects to retire 30 years from now. Assume that her retirement account pays an interest of 6% per year, compounded annually.

Your clients retirement goals are as follows: She expects to live 25 years after retirement, and wants to be able to withdraw $70,000 every year from her retirement account, during these 25 years.

a) How much money must she have in her retirement account at the time of retirement (i.e., 30 years from now) in order to meet her retirement goals?

b) Your client cannot set aside any money for retirement planning during the next 5 years, because she has some student loans to repay. However, starting from the 6^th year, she plans to invest a fixed amount each year till the 30^th year (i.e., she will make 25 annual payments into her retirement account). What should this fixed annual amount be to meet her retirement goals in part a)?