A couple will retire in 40 years. They plan to spend $50,000 of their savings each year, with the withdraw coming at the end of the year. They expect retirement to last for 25 years. They believe they can earn 9% interest on retirement savings by investing in high quality mutual funds. They realize too, that in 20 years they will also need to spend $80,000 (one time) to cover costs of their child's education. If the couple makes year-end annual payments starting in year 1 into a savings plan, how much does the couple need to save per year to cover both future college and future retirement costs? (round interim calculations to dollars and cents. Round your answer to the nearest dollar)
A couple will retire in 40 years. They plan to spend $50,000 of their savings each year, with the withdraw coming at the end of the year. They expect retirement to last for 25 years. They believe they can earn 9% interest on retirement savings by investing in high quality mutual funds. They realize too, that in 20 years they will also need to spend $80,000 (one time) to cover costs of their child's education. If the couple makes year-end annual payments starting in year 1 into a savings plan, how much does the couple need to save per year to cover both future college and future retirement costs? (round interim calculations to dollars and cents. Round your answer to the nearest dollar)
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 4 images
