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Question: capital needs practice problems robert is 52 years old he...

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Capital Needs Practice Problems Robert is 52 years old. He currently is earning $125,000. He has determined through a budgeting process that a wRR for retirement will be 63% of his gross earnings. He expects his earnings to increase by 3% per year until retirement. Robert intends to work until his social security full retirement age of 67. At that time, he expects social security to pay him $24,000 per year. Robert also assumes his retirement needs will remain flat on average during his retirement years (no inflation). While life expectancy is hard to predict, he assumes he will live for 25 years in retirement. Currently, Robert has $350,000 in his 401k plan that has earned him 8% per year on average. During retirement, he assumes he will invest more conservatively and likely only earn 5% on his investments. Using an annuity method of capital needs assessment how much will Robert need to add to his 401k each year to reach his retirement goal? 1. From the previous problem, assume Robert retires at age 65, but does not begin taking social security until age 70, when it will be $30,000 per year. 2.
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