Sarah - Retirement
Money Saved up	$300,000
Inflation	1.50%
Annual Payment	$6,000
Post Rate of Return	6.00%
Years to Retire	14
Years in Retirement	30
Living Expenses	$50,000

What is her pre-retirement rate of return requirement?

12. Sarah is looking to fine tune her retirement plan. She currently has $300,000 saved up and is looking to retire in 14 years when she is 55. Given the following information below, calculate the pre- retirement rate of return that she would need to achieve if she were to contribute $6,000 a year (starting today and for the next 13 years) to meet her goal of retiring when she is 55. SHOW YOUR WORK FOR ALL PARTS OF THE CALCULATION! a) Her life expectancy is 85 years old b) Based on needs-based analysis, she determines that she will need $50,000 a year in today's dollars to live on c) Assume 1.5% inflation rate, 6% return in retirement d) Assume all payments and withdrawals are made at the beginning of the year e) Assume that the contributions are constant (they do not increase with inflation) f) Assume that her withdrawals increase each year at the rate of inflation