Reference no: EM131483180

Bob is 37 years old and is an account manager with a large telecom company. He's been dragging his feet with his retirement plan, opting instead for expensive trips to Vegas and Aspen. He's decided it's time to get serious about saving for his retirement. He plans to retire at age 67 and travel the world. Because of this plan, he figures he needs approximately $70,000/year in retirement. His grandfather lived until he was 86 and his dad is in perfect health at age 70, therefore Bob figures he should plan to be around until he's 90. So far, he has $11,000 saved for retirement and because of his aggressive investment philosophy, is planning for a return on all his investments before retirement of 8%. Following retirement he will invest more conservatively and will plan for a 5% return on investments. His company's retirement plan is defined contribution, so he doesn't plan on getting a pension. He is not counting on social security to be around, so he isn't including that in his plan. Thus, his entire retirement will be funded on his own savings.

How much will Bob have saved at the end of his work life, if he doesn't add to his current savings?