Dean martin is trying to save for secure retirement

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Reference no: EM132031291

Dean Martin is trying to save for a secure retirement. He currently has $95,000 in an IRA account earning and projected to earn 6%. He is 40 years old and wants to retire at age 67 and draw Social Security (assume it will still be around). Dean projects his benefits for Social Security Old Age coverage will be $1,900 per month. He thinks he will live to age 85 and wants $85,000 per year in retirement income (today’s $). How much must he save each and every year until retirement if he will earn 6% on any new investment and assuming an expected inflation rate of 2%? Assume money after retirement is invested at 6% with an inflation rate of 2%.

Reference no: EM132031291

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