Required annuity payments Retirement income today $45,000 Years to retirement 10 Years of retirement 25 Inflation rate 5.00% Savings $110,000 Rate of return 10.00% Calculate value of savings in 10 years: Savings at t = 10 Calculate value of fixed retirement income in 10 years: Retirement income at t = 10 Calculate value of 25 beginning-of-year retirement payments at t =10: Retirement payments at t = 10 Calculate net amount needed at t = 10: Value of retirement payments Value of savings Net amount needed Calculate annual savings needed for next 10 years: Annual savings needed for retirement

Required annuity payments Retirement income today $45,000 Years to retirement 10 Years of retirement 25 Inflation rate 5.00% Savings $110,000 Rate of return 10.00% Calculate value of savings in 10...

Required annuity payments

Retirement income today	$45,000
Years to retirement	10
Years of retirement	25
Inflation rate	5.00%
Savings	$110,000
Rate of return	10.00%

Calculate value of savings in 10 years:
Savings at t = 10

Calculate value of fixed retirement income in 10 years:
Retirement income at t = 10

Calculate value of 25 beginning-of-year retirement payments at t =10:
Retirement payments at t = 10

Calculate net amount needed at t = 10:
Value of retirement payments
Value of savings
Net amount needed

Calculate annual savings needed for next 10 years:
Annual savings needed for retirement

Jun 05, 2022