Several Social Security + Retirement funding TVM problems

1. As current spending is $100,000 (including federal and state income taxes). He expects his spending to rise at the same rate as the inflation rate over time. He expects a 3% inflation rate and to be able to earn an average return of 8% on his investments. His Social Security statement estimates his full retirement age monthly benefit will be $3,000. If A will retire in 10 years at his FRA, the first year retirement withdrawal A will need from his investment portfolio is closest to:

Financial calculator inputs:

N	I/Y	PV	PMT	FV

Final Answer: _____ $98,392 (rounded)______________________________

2. B estimates she will spend $80,000 in her first year of retirement and that this spending will rise with inflation over her retired life. In her first year of retirement, she will receive estimated Social Security benefits of $25,000 to fund her first years retirement spending. She estimates her retirement will last 20 years and during that time, inflation will average 2% and she will earn 5% on her investments. How large must her retirement portfolio be to fund her expected spending?

Financial calculator inputs:

N	I/Y	PV	PMT	FV

Final Answer: _______ $846,927 (rounded)__ _______________________

3. After incorporating her Social Security benefits, C determines she needs a retirement fund of $3 million. With an expected inflation rate of 4% and an expected portfolio return of 8% and 26 years until retirement, what must she save each year to meet her goal? Assume she currently has $200,000 in your retirement portfolio.

Financial calculator inputs:

N	I/Y	PV	PMT	FV

Final Answer: ______ $19,020 (rounded)__________________________

4. D expects to retire in 15 years at his full retirement age with an estimated spending need of $60,000 in his first year of retirement. He estimates his Social Security benefit that year will be $15,000. He also believes inflation will average 3% annually and his portfolio can earn an average of 6% annually. If he expects retirement to last 30 years, what is the present value of his Social Security benefits as of his retirement date?

Financial calculator inputs:

N	I/Y	PV	PMT	FV

Final Answer: _____ $306,016 (rounded)__