question archive Troy and Kristy Reynolds (both currently 56) have determined that they will require retirement income equal to $93,000 in today's dollars, based on their current income
Troy and Kristy Reynolds (both currently 56) have determined that they will require retirement income equal to $93,000 in today's dollars, based on their current income
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Troy and Kristy Reynolds (both currently 56) have determined that they will require retirement income equal to $93,000 in today's dollars, based on their current income. They plan to retire in 8 years and wish to assume an after-tax return on their investments, prior to retirement, of 8%. They plan to readjust their assets after retirement and believe that their net return will drop to 6%. Troy's parents are both in their late eighties, and Kristy's parents are in their seventies. Troy and Kristy assume that retirement will last for 30 years, and that inflation will average 2%
3.For purposes of Social Security retirement benefits, the Reynolds reach full-retirement age at age 67. Their full benefit is expected to be $30,000 in today's dollars. If the Reynolds decided to factor in Social Security and begin taking Social Security benefits when they retire at age 64, how much personal capital would they need to accumulate at retirement?
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Fv Amount to be left after 30 years $2,000,000
Rate Return during retirement 6%
Nper Number of Years 30
PV Additional Capital
required at retirement $348,220
(Using PV function of excel with Rate=6%, Nper=30, Fv=-2000000)
The calculations are done on excel and below in the attached image "Answer" is the solution and explanation.
Please see the attached file for the complete solution
