What is amount of capital necessary at start of retirement

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Troy and Kristy Reynolds (both currently 56) have determined that they will require retirement income equal to $93,000 in today's dollars, based on their current income. They plan to retire in 8 years and wish to assume an after-tax return on their investments, prior to retirement, of 8%. They plan to readjust their assets after retirement and believe that their net return will drop to 6%. Troy's parents are both in their late eighties, and Kristy's parents are in their seventies. Troy and Kristy assume that retirement will last for 30 years, and that inflation will average 2%.

Problem 1: What is the amount of capital necessary at the start of retirement support their income needs throughout retirement?

Reference no: EM132722164

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