Reference no: EM132062716

You have just turned 22 years old, have just received your bachelor's degree, and have accepted your first job. Now you must decide how much money to put into your registered retirement savings plan (RRSP). The RRSP works as follows: Every dollar in the RRSP earns 6.5 % per year. You cannot make withdrawals until you retire on your sixty-fifth birthday. After that point, you can make withdrawals as you see fit. You decide that you will plan to live to 100 and work until you turn 65. You estimate that to live comfortably in retirement, you will need $ 100,000 per year, starting at the end of the first year of retirement? (i.e., when you turn 66) and ending on your one-hundredth birthday. You will increase your contributions at the end of every year that you work by 4% per year (your expectation for salary increases) and you will make these contributions at the end of every year that you work. Your first contribution to your RRSP will be when you turn 23. How much do you need to contribute on your 23rd birthday to begin funding your retirement?