A client needs assistance with retirement planning. Here are the facts: The client, Dave, is 21 years old. He wants to retire at 65. Dave has disposable income of $2,000 per month. The IRA Dave has chosen has an average annual return of 8%. Question 1. If Dave contributes half of his disposable income to the account, what will it be worth at 65? Question 2. How much would he need to contribute to have $5,000,000 at 65?
A client needs assistance with retirement planning. Here are the facts:
- The client, Dave, is 21 years old. He wants to retire at 65.
- Dave has disposable income of $2,000 per month.
- The IRA Dave has chosen has an average annual return of 8%.
Question 1. If Dave contributes half of his disposable income to the account, what will it be worth at 65?
Question 2. How much would he need to contribute to have $5,000,000 at 65?
It is part of retirement planning to establish retirement income objectives and the resources required to meet them. Identification of income sources, estimation of expenses, implementing a savings plan, and managing assets and risk are all components of retirement planning. Future cash flows are calculated to determine whether the retirement income objective is realistic. Retirement planning considers the money's time value concept.
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