Suppose your financial advisor tells you that you need to save enough to draw no more...

Suppose your financial advisor tells you that you need to save enough to draw no more than 4% of your initial retirement account balance each year once you retire. You want to withdraw $50,000 per year. What balance must you achieve in your retirement account to reach your goal?

Select one:

a. $50,000

b. $2,000

c. $1,250,000

d. $679,516

Expert Solution

Balance to be maintained=annual withdrawal amount/discount rate

=50,000/4%

=1,250,000

Option c is correct

jeff jeffy answered 2 years ago

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