You have estimated your future retirement income needs and, after taking Social Security into account, you have determined that you will have an pretax income shortfall of $$100,000$ in your first year of retirement at age $65.$ How much will you need to have saved by then, assuming you want to have your retirement income increase with inflation, but are willing to spend down your principal over time? Assume that you will live for $40$ years in retirement, inflation will average $3\%$ and you can earn $7\%$ on your investments. $($Hint: Use the inflation$-$adjusted annuity equation$).$

You have estimated your future retirement income needs and, after taking Social Security into account, you have determined that you will have an pretax income shortfall of $$100,000$ in your first year of retirement at age $65.$ How much will you need to have saved by then, assuming you want to have your retirement income increase with inflation, but are willing to spend down your principal over time? Assume that you will live for $40$ years in retirement, inflation will average $3\%$ and you can earn $7\%$ on your investments. $($Hint: Use the inflation$-$adjusted annuity equation$).$

$1,924,630$

$1,625,368$

$1,955,400$

$872,901$