1. Suppose that you want to only work until you are 55, retire, live at the lake

Question

1. Suppose that you want to only work until you are 55, retire, live at the lake, fish, hunt and watch grass grow. At age 55, you have accumulated $350,000 in your retirement account. The tricky part is you have to decide how long you wish to withdraw the funds. You hope that if you retire at age 55 that you live another 40 years, right? Keep in mind that when you deplete the retirement fund it is GONE. You want to spread it out over what you think is the rest of your lifespan. So, how much can you withdraw annually beginning at age 55 and withdrawing for your fund for the next 40 years (till age 95), if the balance of the account is left in the fund earning 8% annually? HINT: It will not be a very large withdrawal

Explanation / Answer

In calculator BA 2 plus

Enter 350000 as present value

8 as I/Y

0 as future value

40 as n

And cpt pmt you will get answer 29351.06

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