You want to retire at the age of 60. Your goal is to receive annual annuity payments of $60,000 for 30 years. Your plan is to invest in the stock market and your financial advisor has told you to expect a 6% annual return throughout your retirement (keep it simple and assume it is annual). How much money must you have on deposit in your account when you reach age 60 to achieve this goal? Identify the following:

• Rate per period:
• Number of periods:
• Table used:
• Table value:

Solution for amount needed at age 60:

Now use your actual age to determine this. (21) You need to determine the annual amount of a stream of payments that you must deposit in order to have the amount you determined in the previous question available for the stream of annuity payments? Your financial advisor has provided the following advice for the annual interest you can assume to earn based on the length of time before retirement (the closer you get to retirement the less risky your investments will be)

0-5 years of payments: 3% annual interest

6-10 years of payments: 4% annual interest

11-15 years of payments: 5% annual interest

16-20 years of payments: 6% annual interest

21-25 years of payments: 7% annual interest

26-30 years of payments: 8% annual interest

31-35 years of payments: 9% annual interest

36-40 years of payments: 10% annual interest

41-45 years of payments: 11% annual interest

46-50 years of payments: 12% annual interest

• Amount needed for retirement (from question 7):
• Years to go until age 60 retirement:
• Rate per period:
• Number of periods:
• Table used:
• Table value:

Solution for amount that you need to deposit every year: