Question
Turning 30 and having more disposable income made Dana decide to undertake a retirement planning exercise. She would like to semi-retire at 60 years old,
Turning 30 and having more disposable income made Dana decide to undertake a retirement planning exercise. She would like to semi-retire at 60 years old, when she is still young enough to do the things she enjoys, such as travel. She wants retirement income of $60,000 but plans to work part-time, earning about $24,000. Dana contributes $150 per month (out of gross salary), which is matched by her employer, to her 401 K. From her 401 K statement, continuing these contributions for 30 years at about 6% translates into an estimated $21,000 annually in current dollars. She will not be able to collect social security at that time so will need to invest more for retirement to fill the $15,000 shortfall in retirement income. SHOW WORK 9 points a. With an expected inflation rate of 3.0%, the inflation-adjusted shortfall is_____________
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