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How much must he save during each of the next 10 years

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Reference no: EM131175398

Assume that your father is now 50 years old, that he plans to retire in 10 years, and that he expects to live for 25 years after he retires, that is, until he is 85.

He wants a fixed retirement income that has the same purchasing power at the time he retires as $60,000 has today (he realizes that the real value of his retirement income will decline year-by-year after he retires).

His retirement income will begin the day he retires, 10 years from today, and he will then get 24 additional annual payments.

Inflation is expected to be 5 percent per year from today forward;

he currently has $150,000 saved; and he expects to earn a return on his savings of 7 percent per year, annual compounding.

To the nearest dollar, how much must he save during each of the next 10 years (with deposits being made at the end of each year) to meet his retirement goal?

Reference no: EM131175398

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