You want to retire at age 65, you begin your investment program at 25 with a one

Question

You want to retire at age 65, you begin your investment program at 25 with a one time deposit of $5,000. On this investment you can earn 11% in the Vanguard 2055 retirement fund, balance at 65 is(a). At age 35 you come into an inheritance of $15,500 of which you decide to put into a Roth IRA, using a Fidelity index fund which you anticipate will yield 9.5% until 65, what is balance at 65?(b). At 45 you remember taking Elliott's class and listening to bryan Washburn and Mark Russell and you realize that you have $14,000 extra saved for retirement. To be super safe you invest this sum in another Roth IRA which you will receive a 7% return, how much will accumulate, what is balance at 65(c)? At 65 you want to retire at 120,000 a year for 30 years, (you need this much because you can earn 3.5% on the payout or annuity, not perpetuity, How much will you need to find this plan at 65(d)? With all of this information, and it is not too much info, how much will you need to invest each year at 10%, beginning at 25 to 65, 940 years) using a mutual fund to achieve your retirement goal of $120,000 for 30 years(e)? The second part: remember Bryan Washburn and Mark Russell indicated we are looking for tax-free income at retirement, thus, in a 30% tax bracket, how much will you net each year in retirement(f)? remember, "begin with the end in mind."

Explanation / Answer

A) Deposit amount                  5,000 years for depositing                        40 rate 11% Future value (value at age 65)        325,004.34 b) Deposit amount                15,000 years for depositing                        30 rate 9.5% Future value (value at age 65)        228,304.69 c) Deposit amount                14,000 years for depositing                        20 rate 7.0% Future value (value at age 65)          54,175.58 d) annutiy value              120,000 years                        30 rate 3.5% to fund this plan          1,221,526 e) PVAND30 = $120,000 (PVIFA.10,5) (1 + .10) = $120,000 (3.791) (1.1) = $500,412 FVAN30 = $500,412 = PMT (FVIFA.10,30) = PMT 53,083 f) Asfter tax income tax rate 30% After tax income                84,000

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.