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Tax-deferred individual retirement account

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Reference no: EM131506531

Felicity Thomas, a 25-year old college graduate, wishes to retire at age 65. To supplement other sources of retirement income, she can deposit $4,000 each year into a tax-deferred individual retirement account (IRA). The IRA will earn 8% return for the next 40 years.

If she immediately starts making end of the year $4,000 deposits and upon retirement invests her IRA money in a 25 year annuity earning 5%, how much income will she have…?

Reference no: EM131506531

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