You have worked your whole life and have been able to build an estate worth $7M. Part of this is your house and other tangible assets, but $5.5M is cash invested in stocks and bonds. You have planned to be able to live on the proceeds of this $5.5M portfolio and leave $2M to each of your three children in 25 years. Your advisor has estimated that your annual expenses of home maintenance, taxes, living, travel, and recreation is $300,000 per year. What kind of return will you need to have on this $5.5M to accomplish your plan?

4a. At year 10, the securities market experienced a sharp reversal and your portfolio declined 30%. What kind of return will you need for the remaining 15 years in order to meet your retirement plan? Show all your work.