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Calculate how much capital Steven will need

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Question - Steven, age 41, earns $85,000 annually; and his wage replacement ratio has been determined to be 75%. He expects inflation will average 3% for his entire life expectancy. He expects to work until 68, and live until 90. He anticipates an 8% return on his investments. Additionally, Social Security Administration has notified him that his annual retirement benefit, in today's dollars will be $26,000. Using the basic annuity method, calculate how much capital Steven will need to be able to retire at age 68.

Reference no: EM132940500

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