You are planning to save for retirement. You would like to retire 25 years from today and you currently have $100,000 set aside. You anticipate saving $420 every other week (26 periods per year – $280 out of your pocket and $140 from a company match) into your 401(k) plan. You anticipating earning an 8.7% rate of return over the next 12 years. After 12 years, you will change your biweekly savings to $X every other week (combined contribution from you and your employer into your 401(k) plan) over the last 13 years of your savings period. During these 13 years, you will lower your risk-return strategy so that the expected return will be 8%. Once you hit retirement, you want to take out $200,000 on the day you retire. After that, you will take out money at the end of each year as follows:

              Years 1-4            $110,000 per year

              Years 5-12          $130,000 per year

              Years 13-25        $120,000 per year

Finally, you want to have $330,000 remaining at the end of the 25-year retirement period and you anticipate earning 4.8% per year in retirement (Hint: Note that the $330,000 remaining is at year 25 of the retirement period so that your year 25 CF is actually $450,000 – the last $120,000 plus the $330,000). Figure out how much you need to save every other week over the final 13 years leading to retirement in order to meet your plan.