Suppose you save $2.5 million in your retirement account by the time you are 65. Your...

Suppose you save $2.5 million in your retirement account by the time you are 65. Your retirement account earns a return of 5.5% annually. How much can you withdraw from your account if you want your retirement account to last forever?

Expert Solution

The amount which can be withdrawn for perpetuity = Amount of Savings* Annual rate.

= 2,500,000*5.5%

= $137,500

Amount which can be withdrawn from the account for retirement account to last forever is: $137,500

jeff jeffy answered 2 years ago

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