Annual salary in retirement plan

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Preston expects to retire in 40 years at age 65. He is currently putting away 5% of his annual salary in a retirement plan that earns 5% per year. His employer is contributing 2% of his salary. Currently he is making $40,000 per year and he expects it to increase 3% per year.

1) What would his salary be at age 65?

2) How much would he have in his retirement account at age 65?

3) Preston expects to live for an additional 25 years what would his yearly income be from his retirement account? (Assume the he can earn the same interest amount of 5%)

Reference no: EM131488998

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