Question
In: Accounting
Colin is 40 years old and wants to retire in 27 years. His family has a...
Colin is 40 years old and wants to retire in 27 years. His family has a history of living well into their 90s. Therefore, he estimates that he will live to age 95. He currently has a salary of $150,000 and expects that he will need about 75% of that amount annually if he were retired. He can earn 8 percent from his portfolio and expects inflation to continue at 3 percent. Some years ago, he worked for the government and expects to receive an annuity that will pay him $20,000 in today’s dollars per year beginning at age 67. The annuity includes a cost of living adjustment, which is equal to inflation. Colin currently has $200,000 invested for his retirement. His Social Security benefit in today’s dollars is $30,000 per year at normal age retirement of age 67. How much does he need to accumulate at age 67 exclusive of his pension and Social Security benefits?
A. $2.1 million.
B. $2.2 million.
C. $2.8 million.
D. $2.9 million.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Colin is 40 years old and wants to retire in 27 years. His family has a...
Colin is 40 years old and wants to retire in 27 years. His
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$150,000 and expects that he will need about 75% of that amount
annually if he were retired. He can earn 8 percent from his
portfolio and expects inflation to continue at 3 percent. Some
years ago, he worked for the government...
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