Problemeleanor needs 40000 a year to live on in retirement, Ask an Expert

Accounting

Problem:

Eleanor needs $40,000 a year to live on in retirement net of the income she will receive. She will be retiring in 22 years and is funding for a 25-year retirement. The inflation rate is expected to be 3.5 percent a year and the after-tax return on her investments percent.

Required:

Question 1: How much will the short fall amount to at the beginning of the retirement period?

Question 2: What lump sum will she need at the beginning of the retirement period?

Question 3: What is the required yearly savings?

Note: Please show how to work it out.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91171882

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