What will your pension fund be worth

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Question: In 30 years, you will retire and receive a pension of $96,000 per year, for an estimated remaining life of 23 years. For simplicity, assume it will be received as a single sum at the end of each year, beginning at the end of your retirement year. Your pension will be indexed to the cost of living at a rate of 1.5% per year, i.e. each year after the first, the amount you will receive annually will grow by 1.5%. Actuaries have forecast that interest rates 30 years from now will average 4% per year for the remainder of your life. On your retirement date, what will your pension fund be worth?

Reference no: EM131928653

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