Question
In: Finance
Suppose that you are planning for retirement. You are 26 and plan to retire when you...
Suppose that you are planning for retirement. You are 26 and plan to retire when you are 70, 44 years from now. Your investment goal (based on the 3-legged retirement model) is to gain $5 million at the time you retire. Your opportunity cost of capital (discount rate) is 8 percent. What would be your maximum withdrawal from your personal investment account if you plan to exhaust your personal savings at age 90?
The project average rate of inflation (for a full employment economy) is 3 percent and, inflation will affect your withdrawal amount. How would inflation affect your annual withdrawal? Provide the amortized schedule
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Suppose that you are planning for retirement. You are 26 and plan to retire when you...
Suppose that you are planning for retirement. You are 26 and
plan to retire when you are 70, 44 years from now. Your investment
goal (based on the 3-legged retirement model) is to gain $5 million
at the time you retire. Your opportunity cost of capital (discount
rate) is 8 percent. What would be your maximum withdrawal from your
personal investment account if you plan to exhaust your personal
savings at age 90?
The project average rate of inflation (for...
You are planning your retirement in 15 years. You plan to retire with $3,000,000 and your retirement...
You are planning your retirement in 15 years. You
plan to retire with $3,000,000 and your retirement account earns
4.8% compounded monthly. After you retire, you plan on withdrawing
$15,000 per month from your account until you have nothing left.
How many years can you live off your retirement account after you
retire?
Suppose you are just starting your retirement savings at age 25, and plan to retire at...
Suppose you are just starting your retirement savings at age 25,
and plan to retire at age 70. Your goal is to save a million
dollars in your IRA and you believe you can earn a 7% rate of
return on your investment. How much must you contribute to your IRA
each year to meet your goal?
Select one:
a. $22,222
b. $3,500
c. $619
d. $21,881
You are planning to retire when you turn 65. You currently have $25,000 in your retirement...
You are planning to retire when you turn 65.
You currently have $25,000 in your retirement account.
Based on actuary tables, you expect to live to be 100 years
old.
During each year of retirement you want to be able to withdraw
$50,000 from your retirement account (at the beginning of the
year).
The interest rate is 3%.
You plan to make deposits into your retirement account on your
birthday, each year until you retire.
How much will you need...
Suppose you plan to retire in 33 years. Today, your retirement has a balance of 500,000....
Suppose you plan to retire in 33 years. Today, your retirement
has a balance of 500,000. If you can earn 3% per year in your
retirement account, how much more do you need to deposit now so
that you can have 2.9 million when you retire?
1. 694,761.60
2. 1,593,376.12
3. 1,093,376.12
4. 593,376.12
You are planning on saving for retirement. You wish to retire in 40 years, and you...
You are planning on saving for retirement. You wish to retire in
40 years, and you would like to withdraw an annual sum each year to
live on starting 40 years from today - You have determined that you
will need $100,000 to live on (in today’s dollars) - You estimate
inflation (cost of living) to be 3% - Your estimated rate of return
pre-retirement is 10%; in retirement 7% Assume your life expectancy
once retired is another 20 years....
Suppose you have determined that you want to have retirement savings of $5,000,000 when you retire...
Suppose you have determined that you want to have retirement
savings of $5,000,000 when you retire at age 65, 42 years after you
graduate, at age 23. Looking at the long history of the market, you
are confident that you can earn at 10% per annum on a
well-diversified equity portfolio. Required: a) Calculate much
would you have to save annually at the end of each year for the
next 42 years to reach your $5,000,000 goal assuming a 10%...
You are planning for your retirement and have decided the following: you will retire in 38...
You are planning for your retirement and have decided the
following: you will retire in 38 years and would like to have
$7,000 per month as retirement income for 30 years of retirement.
You have access to an account that earns a 9% rate of return.
1) How much will you need to have when you retire to be able to
withdraw the desired $7,000 per month during your years of
retirement?
2) If you plan to save by making...
You are planning for your retirement and have decided the following: you will retire in 40...
You are planning for your retirement and have decided the
following: you will retire in 40 years and will make monthly
deposits into your retirement account of $300 for the next 15 years
and then monthly deposits of $750 for the remaining 25 years until
retirement. This account earns a 7% rate of return, compounded
monthly. In addition, you will inherit $50,000 7 years from today.
The inheritance will be deposited into an account that will earn
10% per year...
You are planning for your retirement and have decided the following: you will retire in 40...
You are planning for your retirement and have decided the
following: you will retire in 40 years and will make monthly
deposits into your retirement account of $300 for the next 15 years
and then monthly deposits of $750 for the remaining 25 years until
retirement. This account earns a 7% rate of return, compounded
monthly. In addition, you will inherit $50,000 7 years from today.
The inheritance will be deposited into an account that will earn
10% per year...
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