Today is your 40th birthday (this is beginning of period, i.e., time 0). You expect to retire at age 65 and actuarial tables suggest that you will live to be 85. You want to move to Hawaii when you retire (on your 65th birthday). You estimate that it will cost you $50,000 to make the move on your 65th birthday. Starting on your 65th birthday and ending on your 84th birthday (all withdrawals are at the beginning of the year), you will withdraw $40,000 for annual living expenses. Assume the interest rate is 4%.

How much will you need to have saved by your retirement date?

What is your savings calculated in (1) worth today?

You start saving for this goal today till your 65th birthday. How much would you need to save each year?