Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Troy and Kristy Reynolds ( both age 5 6 ) have determined they require retirement income equal to $ 9 3 , 0 0 0

Troy and Kristy Reynolds (both age 56) have determined they require retirement income equal to $93,000 in todays dollars, based on their current income. They plan to retire in 8 years and wish to assume an after-tax return on their investments, prior to retirement, of 8%. They plan to readjust their assets after retirement and believe their net return will drop to 6%. Troys parents are both in their late eighties, and Kristys parents are in their seventies. Troy and Kristy assume retirement will last for 30 years and that inflation will average 2%.(answers below are rounded to the nearest thousands)
How much income will Troy and Kristy need in their first year of retirement?
a.
$93,000.
b.
$107,000.
c.
$109,000.
d.
$153,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Money Banking And Financial Markets

Authors: Stephen Cecchetti

2nd Edition

0073523097, 9780073523095

More Books

Students also viewed these Finance questions