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Barney has $232,000 remaining in his retirement account that earns 6% NAR compounded monthly. He is 70 years old and wants to ease into retirement over ten years by withdrawing $50,000 today and then gradually deplete the fund by reducing the amount withdrawn by $5,000 each year thereafter (e.g. withdraw $50,000 today, withdraw $45,000 at the end of year 1, $40,000 at the end of year 2, through $0.00 in year 10). He will live on social security and Medicare after the retirement funds are depleted. Is this scheme possible? Explain why or why not. Assume end of year withdrawals.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91229814

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