You have just turned 30 yearsold, have just received yourMBA, and have accepted your first job. Now
Question:
You have just turned 30 yearsold, have just received yourMBA, and have accepted your first job. Now you must decide how much money to put into your retirement plan. The plan works asfollows: Every dollar in the plan earns
8 %
per year. You cannot make withdrawals until you retire on your 65th birthday. After thatpoint, you can make withdrawals as you see fit. You decide that you will plan to live to 100 and work until you turn
65
You estimate that to live comfortably inretirement, you will need
$98,000
per year starting at the end of the first year of retirement and ending on your one hundredth birthday. You will contribute the same amount to the plan at the end of every year that you work. How much do you need to contribute each year to fund yourretirement?
The value of the annuity is
$nothing.
(Round to the nearestdollar.)
Expert Answer:
