Aa.68. Flo and Joe Bagadonuts are planning their retirement. They are both 35 years old and planto retire at 65. Their income is currently $55,000 per year. They expect their income togrow at 2% per year until they retire. They want their annual retirement income to be80% of their household income at the time they retire. Assume they will need 25 yearsof retirement income, they will put their savings into a value-oriented equity mutual fundearning 8% per year. At retirement they will switch their savings to a balancedincome fund which will earn 6 percent.a.How much will they need to save each year to meet their retirement goal? They willmake their first payment today.b. If they wait until age 40, how much will they need to save each year?C.Assume they will save $3,000 per year, how long will they be able to live off oftheir retirement savings before having to move in with their children?

GIven, that the income is to grow at 2% so let us calculate the income at 65 year end. The total…

a. How much will they need to save each year to meet their retirement goal? They will make their first payment today. b. If they wait until age 40, how much will they need to save each year? C. Assume they will save $3,000 per year, how long will they be able to live off of their retirement savings before having to move in with their children?