Suppose you just turned 30 years old, expect to retire in 35 years at age 65, and then to live for 20 more years until age 85. Your pre-tax salary this year is $100,000 (paid at the end of this year) and your pre-tax salary is expected to grow at 2% per year. The pre-tax interest rate is 5%. Both your salary and your interest income are taxed at a 35% rate. For simplicity, assume that all cash flows occur at the end of the year. Calculate the value of your human capital (i.e., present value of your life time after-tax salary) today. You decide that you want to spend a constant amount per year for the rest of your life (first consumption at age 31, last consumption at age 85). How much can you spend per year? Are you saving for retirement at age 31? Suppose instead that you decide to spend an amount that is growing at 2% every year for the rest of your life (first consumption at age 31, last consumption at age 85). How much can you spend this year (i.e. at age 31)? Are you saving for retirement this year