Future equivalent worth of your social security savings

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Reference no: EM131304640

It is estimated that you will pay about $61,250 into the social security system (FICA) over your 35-year work span. For simplicity, assume this is an annuity of $1,750 per year, starting a year from today with your 31th birthday and continuing through your 65th birthday (your last annual contribution is on your 65th birthday). What is the future equivalent worth of your social security savings when you retire at age 65 if the government's interest rate is 5% per year? What annual withdrawal can you make if you expect to live 19 years in retirement? Let i =5% per year.

Reference no: EM131304640

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