Annual income in retirement will need to increase year

Assignment Help Financial Management

Reference no: EM131010080

Roy and Barbara are near retirement. They have a joint life expectancy of 25 years in retirement. Barbara anticipates their annual income in retirement will need to increase each year at the rate of inflation, which they assume is 4%. Based on the assumption that their first year retirement need, beginning on the first day of retirement, for annual income will be $85,000, of which they have $37,500 available from other sources, and an annual after-tax rate of return of 6.5%, calculate the total amount that needs to be in place when Roy and Barbara begin their retirement.

Reference no: EM131010080

Questions Cloud

Find the class length : Consider the following data: 34 51 19 23 47 45 37 49 25 17 51 30 37 46 39 36 12 47 40 31 26 47 14 41 22 39 15 16 (a) Find the number of classes needed to construct a histogram. Number of classes (b) Find the class length.

Summarize structural-functionalism and conflict theory : Utilizing information provided by your text regarding the three theoretical positions (structural-functionalism, conflict theory, and the symbolic-interactionist perspective) on the sociology of religion, write an essay, following the instructions..

Assess capital budgeting problem-expansionary project : Assess the relevant cash flows used in forming a capital budgeting decision model. For this assignment, focus upon an expansionary problem. Evaluate the cost of capital (wacc) for use in a capital budgeting decision model. Make sure to define each co..

Find the costs and benefits of low interest rates : Using the two links provided as a starting point, investigate more sources to find the costs and benefits of low interest rates. Include your conclusion as to what the problem is and how we got here when you explain the costs and benefits to our lo..

Annual income in retirement will need to increase year : Roy and Barbara are near retirement. They have a joint life expectancy of 25 years in retirement. Barbara anticipates their annual income in retirement will need to increase each year at the rate of inflation, which they assume is 4%. calculate the t..

Which theory sees society as the parts of an animal : Which theory sees society as the parts of an animal? Science is a structured process of seeking ____ and is subject to change

Required annuity payments : Assume that your father is now 50 years old, plans to retire in 10 years, and expects to live for 25 years after he retires - that is, until age 85. He wants his first retirement payment to have the same purchasing power at the time he retires as $60..

How much would we expect price to increase in scenario : how much would we expect price to increase in scenario - how much would quantity demanded change - Derive an expression for the equilibrium price of crude oil.

Financed by risk-free debt-expected market risk premium : A company is 37% financed by risk-free debt. The interest rate is 12%, the expected market risk premium is 10%, and the beta of the company’s common stock is 0.62. What is the company cost of capital? What is the after-tax WACC, assuming that the com..

User Account

All Pages