When you retire, you want to spend $40,000 a year from your savings to help support yourself. Infl ation is running at 3% a year, however, and you notice that it costs you a little more each year to live the same way as you did the fi rst year, so that you have to increase your initial $40,000 withdrawal each year. If you start out with $500,000 in your savings account, how many years will your money last? Assume that your savings are earning 5%

interest a year.