First retirement income amount

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Reference no: EM13977711

Suppose that you are 25 years old. You figure that your income will be such that you will be able to save for the next 25 years, until age 50 (first deposit at age 26 and last deposit at age 50). At age 50, your income will just cover your expenses. Finally, you expect to retire at age 60, taking your first retirement income amount at age 61 and your last one at age 80, right before you die. Suppose that you want to guarantee yourself an income of $30,000 per year after retirement. How much should you put away every year, for the next 25 years, starting at the end of this year (at age 26)? Assume that the interest rate is 12%.

Reference no: EM13977711

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