In: Finance
A 50 year old employee contributes 20000 per year to her 401k, and her employer matches her contributions by 40%. The investment company has provided her with two options:
Option 1 | Option 2 | |
Equity | 60% | 40% |
Bond | 30% | 40% |
Money Market Fund | 10% | 20% |
The employee wants to retire at 65. The average rates of return presented are 5% on equity, 3% on bonds, and 1% on money market funds. Calculate the total amount of money at the time of retirement under each option.
Step to calculate fund value at retirement
Please refer to below spreadsheet for calculation and answer. Cell reference also provided.
Cell reference -
Hope this will help, please do comment if you need any further explanation. Your feedback would be appreciated.