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How much can you withdraw each year after you retire

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Reference no: EM133172032

Question - You are trying to plan for retirement in 10 years, and currently you have £150,000 in a savings account and £252,000 in stocks. In addition, you plan to deposit £8,000 per year into your savings account at the end of each of the next 5 years, and then £10,000 per year at the end of each year for the final 5 years until you retire.

a) Assuming your savings account returns 8% compounded annually, and your investment in stocks will return 12% compounded annually, how much will you have at the end of 10 years?

b) If you expect to live for 20 years after you retire, and at retirement you deposit all of your funds (including savings and stock investments) into a bank account paying 11%, how much can you withdraw each year after you retire (marking 20 equal withdrawals beginning one year after you retire) so that you end up with a zero-balance at death?

Reference no: EM133172032

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