SHOW WORK CLEARLY

RETIREMENT 1. Russell is looking forward to retirement and hopes to be able to retire (stop working) when he is 65. His wage replacement ratio is estimated to be 75%. Given Russell's health and family history, a conservative estimate for his life expectancy is 85 years. Russell's Social Security benefit statement indicates that his Social Security retirement benefit (in today's dollars) is $17,000 per year. [Use Steps 1 through 3 of the example on pp. 491-292 of the textbook to find the answer to this question: . What amount of retirement funds will he need at retirement (draw timelines to make sure you are setting BGN to the correct setting (BGN or END*)) in order to maintain his standard of living until age 90? Assume Russell can earn 6% (annual compounding (C/Y=1) on his investments up to and during retirement, and that the rate of inflation over the rest of his life averages 4% per year. Amount of retirement funds ("nest egg") he needs at retirement (beginning of first year of retirement*) = $ * Note that the example on pp. 491-492 uses a subscript of AD to denote when you are dealing with an annuity due and therefore need to set BGN to BGN on the BAII Plus