What does the cash flow diagram look like for each situation

Reference no: EM132171477

Question - Given Situation: You start a new job at age 39 with a beginning salary of $72,000 per year paid monthly. You expect a 2% increase annually in your salary. You invest 10% of your salary and your employer gives you an additional 3% of your salary each year paid into your retirement account monthly.

At the end of year 6 you get a $10,000 raise instead of the 2% increase. At the end of year 10 you get another $10,000 raise instead of the 2% increase.

The investment firm that you have your retirement account with is averaging 10% gains on your money over your lifetime.

You expect to live until you are 95 years old and would like to retire by the time you are 65.

1- How long do you have to work to save $1,000,000?

2- If you retire when you have $1,000,000 How long will it last if you need $4000 per month to live on?

3- At what age will you be able to retire to receive $4000 per month to live on until you die at age 95?

4- What does the cash flow diagram look like for each situation listed above?

Reference no: EM132171477

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