Mary just turned 31 years old today and she is saving for her retirement. This is her plan. She will make annual deposits into an account with the first deposit today. She will make these deposits up to (and including) her 65th birthday, when she plans to retire. Starting on her 66th birthday, she wants to be able to withdraw $50,000 per year for 20 years to fund her retirement. How large must the annual deposit be in order for her to meet her goals? Assume i^((1))=10%.

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A:

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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.