Sebastian is 40 yrs old and has never married. He wants to retire at age 62 with an 80% wage replacement ratio. Sebastian currently earns $100,000, as an employee and has managed to save $100,000 towards his retirement goal. He is currently saving $5000 per year in his 401k plan. His employer's plan calls for a 50% match contribution up to an employee deferral of 6%. Sebastian's primary goal is to retire at age 62 with an 80% wage replacement ratio including social security projected to be $30,000 in today's dollars at a normal retirement age of 67. He wants to plan for a life expectancy to age 95.

(General inflation is expected to average 3% annually for the foreseeable future; Sebastian's expected investment portfolio rate of return is 8.5%)

a. What is the total deferral into the 401K plan by Sebastian and his Employer in the current year? (annual contribution amount in 401K)

b. How much should Sebastian accumulate at the time of retirement to fulfill his retirement goal (80% wage replacement ratio, take into account social security benefit for this calculation)

c. How much should Sebastian save additionally (apart from what is contributed every year in 401K) in order to fulfill his retirement goal?