A 35-year old man is considering a lavish personal pension plan paying 50,000 monthly annuities for 5 years that should start when he reaches 55. He makes quarterly deposits now on the account bearing a constant interest rate of 2.5% per annum for 5- years and plans to place the total balance accrued on time deposit. All interests are at 2.5% per annum except for the time deposit that bears 8.0% annual interest. 1. What is the present value of his pension plan? 2. What is the present value of the 5-year quarterly deposits? 3. How much is the 5-year quarterly deposits?

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Retirement Income

Retirement income is the income received by the retiring person after retirement. Income can either be paid every month or paid annually. The retiree would get a guaranteed income until their death. Retirement income payment differs from person to person based on their investment type and payment method. Some are paid on a lump-sum basis and some are paid in a regular series with fixed payment or variable cash flow. Retirement income can be created from retirement savings, investment, salary, bonus, and wages from employment. Every working individual should plan their retirement income according to their income goals for the future. The plan should be made by identifying suitable income sources, estimating future expenses, applying a savings plan, and managing risk and assets. The most common age for retirement is between 60-65 years.