A new graduate has successfully found their dream job and wants to start saving for retirement. She has estimated she will need to be able to withdraw $5000 per month from her retirement date. She plans on retiring in 30 years, and will start to save using her company's 401(k). She believes that she can earn an average of 8% with a diversified portfolio. If she plans on retiring at age 67, she wants to allow to receive that income of $5000 per month for 20 years. She will start her monthly contribution in 1 months time. How much should she save (including any company match) per month to have enough money to withdraw her target amount per month for 20 years? Recap: Save monthly for 30 years. Withdraw monthly for 20 years & balance goes to 0.
A new graduate has successfully found their dream job and wants to start saving for retirement. She has estimated she will need to be able to withdraw $5000 per month from her retirement date. She plans on retiring in 30 years, and will start to save using her company's 401(k). She believes that she can earn an average of 8% with a diversified portfolio. If she plans on retiring at age 67, she wants to allow to receive that income of $5000 per month for 20 years. She will start her monthly contribution in 1 months time. How much should she save (including any company match) per month to have enough money to withdraw her target amount per month for 20 years? Recap: Save monthly for 30 years. Withdraw monthly for 20 years & balance goes to 0.
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