Assume you want to retire early at age 54. You plan to save using oneof the following two strategies: (1) save $3,300 a year in an IRAbeginning when you are 29 and ending when you are 54 (25 years)or (2) wait until you are 42 to start saving and then save $6,875 peryear for the next 12 years. Assume you will earn the historic stockmarket average of 10% per year.(Click the icon to view the future value annuity factor table.)(Click the icon to view the future value factor table.)(Click the icon to view the present value annuity factor table.)(Click the icon to view the present value factor table.)Read the requirements.Requirement 1. How much out-of-pocket cash will you invest under thetwo options?Calculate how much out-of-pocket cash you will invest under the twooptions.Option 1: $ 82,500Option 2:$ 82,500Requirement 2. How much savings will you have accumulated at age54 under the two options?Calculate the total amount of savings that you will have accumulated atage 54 under the two options. (Round the savings to the nearestdollar amount.)Option 1:

Part 2:Explanation:Step 1: Calculate the out-of-pocket cash investment for Option 1:Under Option 1,…

Answered: Assume you want to retire early at age…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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You are trying to decide how much to save for retirement. Assume you plan to save $4,500 per year with the first investment made one year from now. You think you can earn 6.0% per year on your investments and you plan to retire in 45 years, immediately after making your last $4,500 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing $4,500 per year, you wanted to make one lump-sum investment today for your retirement that will result in the same retirement saving, how much would that lump sum need to be? c. If you hope to live for 16 years in retirement, how much can you withdraw every year in retirement (starting one year after retirement) so that you will just exhaust your savings with the 16th withdrawal (assume your savings will continue to earn 6.0% in retirement)? d. If, instead, you decide to withdraw $191,000 per year in retirement (again with the first withdrawal one year after retiring), how many years will it…
You are trying to decide how much to save for retirement. Assume you plan to save $6,000 per year with the first investment made one year from now. You think you can earn 6% per year on your investments and you plan to retire in 43 years, immediately after making your last $6,000 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing $6,000 per year, you wanted to make one lump-sum investment today for your retirement that will result in the same retirement saving, how much would that lump sum need to be? c. If you hope to live for 18 years in retirement, how much can you withdraw every year in retirement (starting one year after retirement) so that you will just exhaust your savings with the 18th withdrawal (assume your savings will continue to earn 6% in retirement)? d. If, instead, you decide to withdraw $100,000 per year in retirement (again with the first withdrawal one year after retiring), how many years will it take…
You are trying to decide how much to save for retirement. Assume you plan to save $4,000 per year with the first investment made one year from now. You think you can earn 10.5% per year on your investments and you plan to retire in 36 years, immediately after making your last $4,000 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing $4,000 per year, you wanted to make one lump-sum investment today for your retirement that will result in the same retirement saving, how much would that lump sum need to be? c. If you hope to live for 28 years in retirement, how much can you withdraw every year in retirement (starting one year after retirement) so that you will just exhaust your savings with the 28th withdrawal (assume your savings will continue to earn 10.5% in retirement)? d. If, instead, you decide to withdraw $270,000 per year in retirement (again with the first withdrawal one year after retiring), how many years will it…
You are trying to decide how much to save for retirement. Assume you plan to save $5,000 per year with the first investment made one year from now. You think you can earn 10.0% per year on your investments and you plan to retire in 43 years, immediately after making your last $5,000 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing $5,000 per year, you wanted to make one lump-sum investment today for your retirement that will result in the same retirement saving, how much would that lump sum need to be? c. If you hope to live for 20 years in retirement, how much can you withdraw every year in retirement (starting one year after retirement) so that you will just exhaust your savings with the 20th withdrawal (assume your savings will continue to earn 10.0% in retirement)? d. If, instead, you decide to withdraw $300,000 per year in retirement (again with the first withdrawal one year after retiring), how many years will it…
Give typing answer with explanation and conclusion
Use Excel to solve the following problem. Assume that you are 39 years old planning for your future retirement at age 65. You think that you will be comfortable living on the proceeds from a $1,000,000 401K Retirement Account.a. If your investments grow at an average rate of 6% annually how much must you invest monthly to achieve your projected retirement fund total by the time you retire in 26 years?b. Assuming that when you do retire, you will re-direct your $1,000,000 investment portfolio into less volatile and more secure mutual funds. You expect that, invested in these sources, your portfolio will securely earn 4.5% annually. Based on your assumptions and the normal life expectancy of an American male or female (I determined this to be 81 years old), without consuming any of your principal, how much money will you have on a monthly basis to support your life?(I have worked this problem out on my own, I just want to be sure I applied the formulas and concepts correctly.)
You would like to start saving for retirement. Assuming you are now 25 years old and you want to retire at age 55, you have 30 years to watch your investment grow. You decide to invest in the stock market, which has earned about 9% per year over the past 80 years and is expected to continue at this rate. You decide to invest $1,000 at the end of each year for the next 30 years. Required: Calculate how much your accumulated investment is expected to be in 30 years. (FV of $1. PV of $1. EVA of $1, and PVA of $1) (Use tables, Excel, or a financial calculator. Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Accumulated investment amount 100,834.00
You would like to start saving for retirement. Assuming you are now 25 years old and you want to retire at age 55, you have 30 years to watch your investment grow. You decide to invest in the stock market, which has earned about 13% per year over the past 80 years and is expected to continue at this rate. You decide to invest $2,000 at the end of each year for the next 30 years.Required:Calculate how much your accumulated investment is expected to be in 30 years.
You would like to start saving for retirement. Assuming you are now 25 years old and you want to retire at age 55, you have 30 years to watch your investment grow. You decide to invest in the stock market, which has earned about 13% per year over the past 80 years and is expected to continue at this rate. You decide to invest $2,000 at the end of each year for the next 30 years. Required: Calculate how much your accumulated investment is expected to be in 30 years.
You just had your 30th birthday and you are planning for your retirement at age 66. You currently have $20,000 in your investment portfolio, and you estimate that you will need at least $1.5 million in order to retire comfortably when you turn 66. What rate of return must be earned on your investment portfolio (assuming that you do not add any more money into the account) for your retirement plan to work? Show me all the calculation process
In wisely planning for your retirement, you invest $12,000 per year for 20 years into a 401-k investment account. (a) How much can you withdraw each year for 10 years, starting 1 year after your last deposit, if you want a real return of 10% per year when the inflation rate averages 2.8% per year? (b) For a spreadsheet function challenge, write a single-cell function that displays the correct 10-year annual withdrawal amount directly.
Pick a target retirement age. It can be any age you want. Using your real life current age, and your target retirement age, how much would you need to invest each month in order to reach $1,000,000 by the time you want to retire. Assume you can earn 12% APY on your investing and you have $0 now. You can use annual values for APY and PMT to solve this. If you had $1,000,000 and you wanted to live until age 100, how much could you spend each year, starting from your target retirement age, and spending the same amount each year until age 100? Assume your savings will earn 4% APY after you retire, and you will have nothing left at the end.

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