Solution-Calculate the total amount of annual pre-tax income

Calculate the total amount of annual pre-tax income

Reference no: EM132780878

1. Manni and his spouse, Annie have recently become serious about retirement planning. They have $850,000 in non-registered assets, and are wondering how much pre-tax income can be generated on an annual basis, based on the following assumptions:

Retirement begins in exactly 5 years
Payout period should align with the standard rule of thumb: the period of retirement begins when the first individual retires and extends to the point in time when the youngest spouse reaches age 90
Annual return of 6%, compounded annually during accumulation phase.
Annual return of 4% compounded annually during payout phase
No additional contributions will be made, other than the investment earnings
Income during retirement will be received annually at the beginning of each year
Manni turns 55 today, while Annie turns 53 today.

Calculate the total amount of annual pre-tax income that the asset base will provide throughout retirement, based on the assumptions outlined above.

Reference no: EM132780878

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Calculate the total amount of annual pre-tax income

Reference no: EM132780878

Reference no: EM132780878

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