Question

In: Finance

Carlo and Maria are both 46 years old and they are thinking of whether or not...

Carlo and Maria are both 46 years old and they are thinking of whether or not they can afford to retire at age of 60. They want to be able to spend 5200 USD after the retirement till the age of 82 on monthly basis as a result of investing all of their saving on the date of retirement into a financial institution at 3% p.a

They have some financial instruments in which they have been investing already.

Type of Account

Current Balance

Average Return

Compound frequency

Further contribution

Joint IRA

74203

3,90%

monthly

350

Bond Fund

39937

3,50%

monthly

150

Savings

1200

2,80%

quarterly

Bank CDs

46889

4,40%

semiannual

Income Fund

12376

7,50%

monthly

Money MKT

36737

4,80%

daily

Index Fund

315092

3,90%

monthly

Index Fund TSA

353039

13,10%

monthly

860

Utilities Stock Fund

28800

7,50%

monthly

   

How do you think can they afford to retire at age of 60? Can they increase the amount of their spending after the retirement if they are expecting to spend for further 22 years after the retirement ?

Solutions

Expert Solution

Carlo and Maria retirement fund is well inline of the their requirement. Yes, they can retire at the age of 60. Since they have a sufficient fund they can even increase there post retirement spending.


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