Erin wants a monthly retirement income of $10,000. She will retire on her birthday at age 67 with a $3,000 per month social security monthly benefit and a $3,000 per month defined benefit pension. She expects to die on her birthday at age 90 and would like to leave $100,000 to each of her 4 children. She expects that her assets will grow at 9.9% per year. Her marginal tax rate is 24% and she expects a 2.6% annual rate of inflation. How much will she need to have saved when she retires to assure her desired monthly retirement income along with her desire to pass on some money to her kids?
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Erin wants a monthly retirement income of $10,000. She will retire on her birthday at age 67 with a $3,000 per month social security monthly benefit and a $3,000 per month defined benefit pension. She expects to die on her birthday at age 90 and would like to leave $100,000 to each of her 4 children. She expects that her assets will grow at 9.9% per year. Her marginal tax rate is 24% and she expects a 2.6% annual rate of inflation. How much will she need to have saved when she retires to assure her desired monthly retirement income along with her desire to pass on some money to her kids?
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- Magdalena, age 35, has $72,000 accumulated in savings. She projects she will save $23,000 a year until her retirement at age 67. Her current cost of living is $100,000. In retirement, she will receive $31,704 per year in Social Security and $20,000 in pension, both in today’s dollars and both expected to rise by the rate of inflation. Her retirement cost of living is expected to decline by $6,000, in current dollars in the first year of retirement and thereafter grow at the projected inflation rate of 3%. Her projected annual investment return is 6%. a. Calculate her accumulated savings at retirement. b. Calculate her annual income, expenditures, and annual withdrawal for the first year of retirement. c. Develop a withdrawal rate. d. Does she meet the withdrawal rate method of deciding whether she will have sufficient funds to retire? If not, what do you recommend and why?An individual is considering contributing $4,000 per year to either a traditional or a Roth IRA. Payments would begin in one year. If she uses the traditional IRA, her contributions would be fully deductible. She is 40-years old and is in a 28 percent tax bracket. On either IRA she can earn 7 percent. When she retires at age 65, she believes she will be in a 15 percent tax bracket. She invests not only the $4,000 per year, but any tax savings due to the deductibility of her contributions in a taxable investment earning a pretax rate of 7 percent. She will withdraw all her money upon retirement and may owe taxes then, depending on the type of IRA chosen. What is the after-tax future value of the traditional IRA including the invested tax deductions? Group of answer choices $237,545.47 $268,796.81 $215,046.73 $245,384.26 $252,996.15The Ali plan to retire and start receiving their Social Security benefits at the same time, when Jimmy is 67 and Lucy is 62 years old. Their monthly Social Security retirement benefits at those ages in today's dollars are estimated to be $3,200 for Jimmy and $2,000 for Lucy. They think their expenses in retirement in today's dollars will be 70% of their total cash outflows now. Other than Social Security, they will rely on their retirement savings in order to meet their retirement expenses. They want to assume they will die in the same year, when Jimmy is 95 and Lucy is 90 years old.Determine what the payments will be in the distribution phase. These will be the withdrawals Jimmy and Lucy will need to take monthly from their accounts, in order to meet their retirement expenses. How much is that monthly amount?Note: this question is asking about the withdrawals they will need, not about the expenses they will be incurring monthly.
- Asha feels she needs $45,000 per year in retirement. If she receives $30,000 a year from Social Security , at what interest rate must Asha invest her $25,000 of savings for her total income to be at least $45,000 per yearJoanna is making a financial plan for her retirement. Today is her 35th birthday, and she receives $150,000 from her grandmother's will. She plans to retire 25 years from now when she turns 60. Once she is retired, she will need to withdraw $4,000 a month for 15 years, starting on the day she retires. She anticipates earning 6% compounded semi-annually for the entire 40 years. How much of her inheritance money must be invested today to meet her retirement goal?Courtney wants to retire in 15 years when she turns 62. She wants to have enough money to replace 75% of her current income less what she expects to receive from Social Security at the beginning of each year. Courtney expects to receive $25,714 per year from Social Security in today’s dollars at full retirement age of 67. However, she will take Social Security early at age 62, when she retires. Courtney is aggressive and wants to assume an 8% annual investment rate of return and that inflation will be 3% per year. Based on her family history, Courtney expects that she will live 30 years in retirement (age 92). If Courtney currently earns $80,000 per year and she expects her raises to equal the inflation rate, how much does she need at retirement to fulfill her retirement goals? $874,794. $1,022,807. $1,072,458. $1,583,152.
- Nadine is retiring at age 62 and expects to live to age 85. On the day she retires, she has $1,650,000 in her retirement savings account. She is somewhat conservative with her money and expects to earn 6 percent during her retirement years. How much can she withdraw from her retirement savings each month if she plans on giving $300,000 to her grandson on the morning of her death? PLEASE SHOW WORKJordan wants to retire in 15 years when he turns 65. Jordan wants to have enough money to replace 75% of his current income less what he expects to receive from Social Security at the beginning of each year. He expects to receive $20,000 per year from Social Security in today's dollars. Jordan is conservative and wants to assume a 6% annual investment rate of return and assumes that inflation will be 4% per year. Based on his family history, Jordan expects that he will live to be 95 years old. If Jordan currently earns $100,000 per year and he expects his raises to equal the inflation rate, approximately how much does he need at retirement to fulfill his retirement goals? $2,285,195 $3,057,348 $1,268,887 $2,242,055Meredith, who is single, would like to contribute $6,000 annually to her Roth IRA. Her AGI is $125,000. 1. What is the maximum amount that Meredith can contribute? Show your calculations using Microsoft Excel. 2. Assume that Meredith’s AGI is $100,000. She plans to put $6,000 each year into her Roth IRA, hoping to earn 6% annually. What future value will accumulate in her Roth at the end of 20 years? 3. In part (b), instead assume that Meredith puts the $6,000 into the Roth for 15 years at 6%. How much will accumulate at the end of this period?
- Mary plans to make the following contributions to her retirement account: $10,000 for each of the next ten years, and $12,000 for each of the ten years after that. If her savings earn 5%, how much will she have at the end of the 20 years. Ignore taxes and assume that the contributions are made at the end of the year.Over the years, Ahmed and Aamina El-zayaty, of Berkeley, CA,desire an annual retirement income of $200,000 in their employer-sponsored retirement plans. Given that their parents all lived to be in their 90s, they each expect to live for 30 years past retirement. If the couple could earn 3 percent after-tax and after-inflation rate of return on their investments, what amount of accumulated savings and investments would they need?Your father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, until he is 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $55,000 has today. (The real value of his retirement income will decline annually after he retires.) His retirement income will begin the day he retires, 10 years from today, at which time he will receive 24 additional annual payments. Annual inflation is expected to be 5%. He currently has $205,000 saved, and he expects to earn 10% annually on his savings. How much must he save during each of the next 10 years (end-of- year deposits) to meet his retirement goal? Do not round intermediate calculations. Round your answer to the nearest dollar. $